The Financial Conduct Authority (FCA) says it will remove unnecessary regulations and relax some of the rules firms must adhere to in response to the UK government’s calls to remove barriers to economic growth.
The FCA made the pledge today (17 January) in a letter to the prime minister, which sets out regulatory reforms to boost the economy.
In the letter, the FCA’s chief executive Nikhil Rathi said the regulator will work with the government “in a fundamentally different way to support the growth mission”.
The reforms proposed by the FCA include simplifying or removing some rules from its handbook, working closely with the Bank of England and the Prudential Regulatory Authority to reduce reporting burdens for firms and making the Senior Managers and Certification Regime more flexible.
Other reforms include reviewing the reporting requirements and removing ‘redundant returns’, which could affect 16,000 regulated firms, simplifying lending advice rules for mortgages and opening a discussion “on the balance between access to lending and levels of defaults”, as well as removing the need for a Consumer Duty board champion.
Rathi stressed that “growth will be a cornerstone” of FCA’s strategy through to 2030. He said the growth strategy will include unlocking capital investment and liquidity, accelerating digital innovation to enhance productivity and making it easier for firms to start up and grow.
He also outlined some of the actions already taken by the FCA to support the economy and boost growth.
They include reforming listings rules, bolstering investment research, revolutionising provision of financial advice, launching long-term asset funds, reforming the value for money framework for pensions targeting better long-term returns, and reforms to fixed income and commodity markets to sustain UK market leadership.
The FCA’s letter is in response to the prime minister’s calls last December for regulators to submit proposals by mid-January on reforms to boost economic growth.
The PM’s letter, which was signed by chancellor Rachel Reeves and business secretary Jonathan Reynolds, said improving regulation to enable growth and not hold back investment was “an essential part of the government’s growth mission”.
It said collaboration was essential to ensure the regulatory environment became “more pro-growth and pro-investment”.
