Episode 23: regulatory update - changing faces in government and at the FCA
Jul 27, 2022
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Regulatory experts David Morrey and Gavin Stewart discuss the impact of leadership changes in government and at the FCA. Topics include FCA leadership changes, the cost-of-living crisis, crypto-regulation, and their summer holiday regulatory reading list.
The appointment of new leadership at the FCA, including a new chair and six directors, highlights the organization's commitment to improving its culture and addressing past challenges.
The UK's lack of a cohesive approach to crypto regulation has prompted an inquiry by the Treasury Select Committee, indicating the urgent need to develop a regulatory framework for cryptocurrencies.
Deep dives
FCA announces hire of 500 new employees and chairman appointment
In an update, the Financial Conduct Authority (FCA) revealed that they have hired approximately 500 new staff members and announced the appointment of an external chairman. The FCA chairman comes with extensive international regulatory experience, having served as the Chief Executive of a regulator and currently chairing a global regulatory body. The FCA aims to improve its culture and tackle the challenges it has faced in the past, such as regulatory independence and maintaining a balance between the chair and the chief executive. The FCA's efforts to increase resources and improve its organizational structure will be pivotal in navigating the complexities of the financial sector.
FCA's update on data strategy falls short of expectations
The FCA released an update on its data strategy, focusing on internal changes such as the recruitment of data scientists and the development of a single view of each firm. However, the update lacked details on how these changes will impact the industry and firms' interactions with the FCA. The update did not live up to expectations for a comprehensive strategy that would outline meaningful changes in the way the FCA operates and supervises firms through the use of data. The expectations for the data strategy include enhancing the FCA's effectiveness, improving regulatory outcomes, and fostering innovation in the financial sector.
Publication highlights new FCA hires in supervision and regulatory actions
The FCA announced the appointment of new directors in supervision, including two roles that were created specifically for the functions of wholesale buy-side and payments and digital assets. These appointments indicate the FCA's focus on enhancing its supervisory capabilities and responding to evolving market trends. Additionally, the FCA published various policy statements, such as regulations on branch closures, side pockets for investment funds, and combatting phoenixing in claims management companies. These initiatives aim to strengthen regulations, improve market stability, and protect consumer interests. The FCA's proactive approach to addressing emerging issues demonstrates its commitment to ensuring a fair and accountable financial landscape.
Treasury Select Committee to launch inquiry into crypto regulation
The Treasury Select Committee has initiated an inquiry into cryptocurrency regulation, recognizing the need for the UK to catch up with major jurisdictions in this rapidly evolving market. With different regulatory perspectives from the Bank of England PRA, FCA, and the Treasury itself, the UK currently lacks a cohesive approach to crypto regulation. The forthcoming inquiry aims to assess the challenges and opportunities associated with cryptocurrencies and determine an appropriate regulatory framework. Given the urgency and complexity of the matter, the inquiry will play a crucial role in shaping the future of crypto regulation in the UK.
The FCA have appointed a new chair, six new directors, as well as an additional 500 hires. Will these leadership changes, as well as new leadership in government, impact the way regulators operate?
In our latest regulatory update David Morrey and Gavin Stewart discuss the latest developments, including: changes in FCA leadership, the cost-of-living crisis, crypto-regulation, and their summer holiday regulatory reading list - sharing insight on how firms can prepare for the changes ahead.
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