The FCA has set out a package of measures to reinforce the UK’s leading position in the bond, derivatives and asset management sectors, supporting growth. New transparency rules for bonds and derivatives markets will give investors more information and reduce costs for firms. And under new proposals, asset managers for pooled investment funds will be given greater flexibility in how they pay for investment research, making it easier to buy insight and analysis across borders.This is part of the FCA’s ongoing work strengthening wholesale markets, while ensuring investors have access to the right information to make decisions.Jon Relleen, director of supervision, policy and competition at the FCA, said: 'We want UK markets to be efficient and to support economic growth. Putting more information in the hands of investors and giving investment firms greater access to research to inform their strategies will bolster UK markets.’We want to seize opportunities to enhance and streamline our rules and support the competitiveness of sectors in which the UK is already a recognised world leader.’Bond and derivatives trade informationThe UK is the world leader in bond and derivatives markets. The FCA aims to cement that position by ensuring investors have access to better, quicker and clearer data at a fair price, which helps these markets work efficiently: Greater transparency, in terms of timeliness and content of the information published to the market. Lower compliance costs for trading venues and investment firms by simplifying the regime.Higher quality post-trade data, which will support the creation of a consolidated tape for bonds in the UK. New payment options for investment researchIn July 2024, the FCA finalised rules allowing institutional investors more flexibility in paying for investment research. Following feedback from industry, the FCA proposes to extend those freedoms to pooled investment funds and allow fund managers to combine payments for research with trade execution, subject to certain guardrails. Notes to editorsThe new bond and derivatives transparency rules will not come into force until 1 December 2025. The FCA is also establishing a bond consolidated tape, to ensure that data is not only of higher quality and available on a more timely basis, but it is also accessible in a cost-effective way. The FCA recently set out rules giving institutional investors greater flexibility in how they pay for research. The FCA is now proposing to extend this flexibility to asset managers of alternative investment funds and undertakings for collective investment in transferable securities (UCITS).

Project Guardian is an international collaboration of industry and regulators, led by the Monetary Authority of Singapore, that explores the use of fund and asset tokenisation. We welcome the first industry-led Project Guardian report on tokenisation in the asset management sector, delivered through Project Guardian’s asset and wealth management workstream.Read the report: Guardian Funds FrameworkIn the report, firms set out an ambitious, phased vision for the use of distributed ledger technology (DLT) in asset management.The report also discusses potential industry and regulatory standards needed to:scale tokenisation use-casesenable firms and investors to benefit from the technologyWe will continue working with Project Guardian members and the sector to support the development and adoption of asset tokenisation. In 2025, we are going to collaborate with the Monetary Authority Singapore (MAS) to explore the regulatory considerations for tokenisation within the asset and wealth management sector. Our review will consider:regulatory and supervisory principles that could apply to tokenisation use-cases to support consumers and the integrity of our marketsany potential regulatory barriers to continuing maturity of tokenisation conceptsOur work in Project GuardianWe are a member of Project Guardian’s policymaker group and are taking part in the asset and wealth management workstream.Throughout 2024, the MAS, FCA and broader Guardian policymaker group have worked with Singapore, UK and international firms within the Guardian membership to develop the use-cases explored in this report, including at the Point Zero Forum in Zurich. The FCA and the Treasury are also observers on the industry-led Technology Working Group of the government’s Asset Management Taskforce that is considering the implementation of fund tokenisation in the UK. Read more about our work on tokenisation

The FCA has banned Steven Hodgson and Paul Adams of Vintage Investment Services (Vintage) from advising any customers on pension transfers and opt outs. Mr Hodgson and Mr Adams poorly advised people to transfer out of defined benefit pension schemes, including the British Steel Pension Scheme (BSPS).They are also banned from holding any senior management function in a regulated firm.In addition, Mr Hodgson and Mr Adams will pay £32,700 and £53,200 respectively to the Financial Services Compensation Scheme (FSCS) to contribute towards redress owed to Vintage customers. Between January 2016 and December 2017, Vintage advised 97% of its defined benefit pension clients to transfer out of their pension, and 98.8% of those customers followed the firm’s advice. 165 people transferred out, including 93 members of the BSPS. The average completed transfer value was over £420,000 (£375,000 for BSPS members).Mr Adams and Mr Hodgson were responsible for this poor advice – two thirds of which did not meet the required standards. 132 customers continued to pay Vintage for ongoing advice after being wrongly advised to transfer. Therese Chambers, joint executive director of enforcement and market oversight said: ‘People rely on good-quality pensions advice to secure a comfortable retirement. Mr Adams and Mr Hodgson fell far short of this basic expectation, earning significant fees for themselves in the process. Their fines will go to the FSCS to offset the cost of their failings.’Notes to editorsRead the Final Notices for Paul Adams and Steven Hodgson.British Steel Pension Scheme – our approach to enforcement.The FSCS has paid £1.07m in claims against Vintage. There are no current outstanding claims being processed by the FSCS. Payments to the FSCS will be prioritised and the FCA is making sure the proceeds from any fines are paid to the FSCS, and therefore back to customers who were wrongly advised.Impacted customers who have not yet made a claim can go to the FSCS dedicated page for information about defined benefit pension transfer claims.

The FCA and PSR Boards have appointed Alison Potter as chair of the FCA’s Regulatory Decisions Committee (RDC) and the PSR’s Enforcement Decisions Committee (EDC). These 2 committees are responsible for taking certain regulatory decisions on behalf of the FCA and the PSR. Committee members are selected based on their ability to make independent decisions grounded in evidence and experience.The new appointment has been made ahead of the existing chair, Tim Parkes, standing down later this year. Alison Potter will begin on 1 November 2024, with a short transitional period alongside Tim Parkes.Bernadette Conroy, FCA non-executive director and chair of the FCA’s Risk Committee, said:'I am delighted to welcome our new RDC and EDC chair. Alison brings with her a wealth of knowledge and experience, including her experience of financial services and decision-making, which will enhance the capability and effectiveness of the RDC and EDC.'Tim Parkes has provided almost 9 years of outstanding leadership and service as RDC and EDC chair, and I would like to thank him for his commitment and dedication to the important work of the committees.'Notes to editorsAlison Potter has over 30 years of experience as a barrister working in commercial law. She specialises in the field of financial services and financial regulatory law. Her practice included a range of commercial law disputes, providing advisory services and conducting litigation for and against a large number of commercial institutions, regulators and individuals. Alison was appointed as a senior decision maker for the Guernsey Financial Services Commission in 2018. She is a bencher in the Middle Temple Inn of Court and acted as a mediator in a range of commercial disputes for over 10 years. Alison has also held a number of other positions including chair of Clifton College, trustee and director of the National Executive of the CPRE, trustee of the Bath Preservation Trust, councillor for Bath and North East Somerset and chair of the West of England Combined Authority Oversight and Scrutiny Committee.You can read more about the work of the FCA’s RDC and the PSR’s EDC on our websites, including the biographies of all current committee members.Find out more information about the FCA.

Speech by Nikhil Rathi, FCA Chief Executive, delivered at the Investment Association Annual Dinner, Mansion House.

PSG SIPP Limited (PSG SIPP) went into administration on 25 October 2024. Christopher Allen and Adam Stephens of Evelyn Partners have been appointed as joint administrators. PSG SIPP is a self-invested personal pension (SIPP) operator authorised and regulated by the FCA.All SIPP schemes administered by PSG SIPP, except Unity SIPP, have been transferred to the regulated SIPP operator, Alltrust Services Limited (Alltrust). PSG SIPP has exchanged contracts with London and Colonial Services (LCS), a regulated SIPP operator, to acquire Unity SIPP.Unity SIPP customers will be supported by Alltrust for a limited period. Once LCS has completed its purchase of Unity SIPP, it will write to impacted customers to explain what is happening to their pension funds, as will Evelyn Partners.These deals mean that PSG SIPP customers, including Unity SIPP customers, can continue to contribute, withdraw and make investment decisions the same as before.Evelyn Partners and Alltrust will communicate next steps to customers holding SIPPs previously administered by PSG SIPP.This article sets out the steps PSG customers should take and advice on how to protect against scams.Who to contactIf you have an urgent question, you can contact Evelyn Partners using the details below.Email: psgsipp@evelyn.comPhone: +44 (0) 121 410 5566Be alert to scamsAll consumers should remain alert to the possibility of fraud.If you were a client of PSG SIPP and are cold called by someone claiming to be from PSG SIPP, Evelyn Partners, Alltrust, London and Colonial or any other company claiming to be involved in the administration, please end the call and contact the relevant party using the details below.Email: psgsipp@evelyn.comProtect yourself from the most common types of scams.Our ScamSmart pages also provide advice on how to avoid investment and pension scams.

The FCA has fined Mr Käärmann, the CEO of Wise plc and senior manager of Wise Assets UK Ltd, £350,000 for breaching a senior manager conduct rule. In February 2021, Mr Käärmann paid a significant fine to HM Revenue & Customs (HMRC) of £365,651. He was fined for deliberately failing to notify HMRC of a capital gains tax liability after he sold shares worth £10m in 2017. In September 2021, HMRC subsequently added Mr Käärmann to their public tax defaulters list.Between February 2021 and September 2021, these matters, including the circumstances surrounding them, were relevant to the FCA’s assessment of Mr Käärmann’s fitness and propriety. Mr Käärmann failed to appropriately consider the significance of the tax issues and notify the FCA, despite being aware of them for over 7 months.Therese Chambers, joint executive director of enforcement and oversight said:'We, and the public, expect high standards from leaders of financial firms, including being frank and open.'It should have been obvious to Mr Käärmann that he needed to tell us about these issues which were highly relevant to our assessment of his fitness and propriety.'Notes to editorsFinal Notice: Kristo KäärmannMr Käärmann would have been fined £500,000, but he agreed to resolve these matters and so qualified for a 30% discount.The FCA issued the fine after determining that Mr Käärmann was in breach of Senior Management Conduct Rule 4, which states: 'You must disclose appropriately any information of which the FCA would reasonably expect notice.'The FCA’s Senior Managers and Certification Regime aims to reduce harm to consumers and strengthen market integrity by creating a system that enables firms and regulators to hold people to account.Mr Käärmann is the CEO of Wise plc, and director of two FCA regulated firms, which form part of the Wise group: Wise Assets UK Ltd and Wise Payments Ltd. Mr Käärmann held two senior manager functions at Wise Assets UK Ltd (SMF1 - chief executive and SMF3 - executive director) between February 2021 and September 2021.As a senior manager at Wise Assets UK Ltd, the FCA expected Mr Käärmann to have self-notified of any matters that may be significant to his fitness and propriety, which included matters that may have an adverse impact on his reputation and/or that of his firms.

On 23 October 2024, MCI Global Investments Advisors Limited entered into Creditors Voluntary Liquidation. Gareth Howarth of Path Business Recovery Limited was appointed as liquidator. MCI Global Investment Advisors Limited (the firm) is a small Authorised Alternative Investment Fund Manager that provided alternative investment fund management services for funds. This includes Novus Black Fund UK Ltd (the Fund) which is an unauthorised firm.The FCA recently wrote to Novus Black Fund investors about unreported losses.The liquidator will shortly be writing to investors in the Fund to explain further what this means.Below we set out:what to do if you’re an investor concerned about investments in the Fundhow to contact the liquidator; andhow to protect yourself from fraudsters claiming to act on behalf of the firm, the liquidator or any other party such as the FCA.If you believe you have a claim against the firm, please contact the liquidator using the details below.Liquidator’s contact detailsName: Gareth HowarthWebsite: http://pathbr.co.ukInvestor helpline: 0161 413 0999Email: mci@pathbr.co.uk Address: 2nd Floor, 9 Portland Street, Manchester, M1 3BE

We note the Court of Appeal judgment on motor finance commission and are carefully considering its decision. In January, we introduced a pause to the time firms have to provide a final response to customers about motor finance complaints involving a discretionary commission arrangement (DCA).We did this to prevent disorderly, inconsistent and inefficient outcomes for consumers and knock-on effects on firms and the market while we review whether motor finance customers have been overcharged because of the past use of DCAs.In September, we extended the pause, in part, so we could account for the outcome of legal cases that may be relevant to our review.We note the Court of Appeal judgment on 25 October 2024, in Johnson v Firstrand Bank Ltd, Wrench v Firstrand Bank Ltd and Hopcraft v Close Brothers Ltd, and are carefully considering its decision.

The FCA has published the results of a survey to better understand how firms record and manage allegations of non-financial misconduct. The survey of over 1,000 investment banks, brokers and wholesale insurance firms found that the number of allegations reported increased between 2021 and 2023.When the survey launched, the FCA was clear that it was likely that data could be read in different ways. For example, a high number of complaints could be an indicator of a healthy culture in which people feel they can speak up, confident they will be listened to. A low reporting rate may indicate the opposite.In the 3 years covered by the survey, bullying and harassment (26%) and discrimination (23%) were the most recorded concerns. However, the large 'other' group of concerns (41%) indicates how difficult it can be to categorise issues of personal misconduct.The FCA found that firms identified concerns through a variety of mechanisms. Some firms were using their internal systems to identify potential issues, although formal processes and whistleblowing were the most prevalent methods of detection.The findings are being shared to enable firms to benchmark their own reporting against this peer analysis and consider if their processes for reporting and investigating possible non-financial misconduct remain appropriate. Trade associations will play a key role in coordinating industry-wide analysis and actions. The FCA expects that stakeholders from other sectors of the economy, or with an interest in workplace culture may find this data useful.Sarah Pritchard, executive director of markets and international, said: ‘We want this data to support financial firms by providing their management teams and boards with an opportunity to consider if they stand out, and, if so, why that might be. The data requires context and careful interpretation. But, in being transparent, we hope financial firms can benchmark themselves against their peers.‘Healthy workplace cultures are essential across all the markets we regulate – where non-financial misconduct is allowed to persist it can undermine trust and confidence, and create a culture where wrongdoing goes unchallenged, causing harm.‘We are grateful to see a number of trade bodies engaging with these findings. We look forward to continuing to partner with them to continue to raise standards.’Notes to editorsThis work is a continuation of our engagement with industry to address non-financial misconduct. We previously wrote to wholesale banks, wholesale insurers and wholesale insurance intermediaries, reminding them of the FCA’s expectations in handling non-financial misconduct appropriately.To find out more about our other work on non-financial misconduct, please read our:Response to the Treasury Select Committee (TSC)’s Sexism in the City inquirySector portfolio letters to wholesale banks, wholesale insurers and wholesale insurance brokersRead the survey findings.

Speech by Graeme Reynolds, director of competition, delivered at the Personal Investment Management & Financial Advice Association's (PIFMA) Wealth Vulnerability event.

The FCA and the Practitioner Panel have published a report from our 2023/24 joint survey of FCA regulated firms. We have published the findings of the FCA and Practitioner Panel 2023/24 survey (PDF).The survey provides us with valuable feedback on how firms feel about the FCA’s performance. We use the results to get a better understanding of the issues affecting firms and assess whether any changes should be made to our approach.We are pleased that the majority of responding firms have a positive view of the FCA’s performance over the last year.Firms’ satisfaction with their relationship with the FCA has increased since the last report. Over three quarters of firms now report a ‘high’ level of satisfaction. This is a notable achievement given the recent scope of regulatory change.Firms have also communicated areas where we could improve. This includes:doing more to facilitate growth and competitivenessensuring we act proportionately when introducing new initiatives and requests on firmsimproving the data collections process to reduce the regulatory burden on firms, demonstrating how we are using the data firms provideWe are already working to improve in many of these areas. Since the survey was undertaken, we have published our first report (PDF) on how we are delivering against our secondary growth objective. We are also continuing to consult the Cost Benefit Analysis Panel to improve transparency around the costs and benefits of new policies.We have further work planned in the coming months. This will include work to simplify our rulebook, improve data collection processes and improve our engagement with smaller firms.We want to enable a fair and thriving financial services market for the good of consumers and the economy.Our success depends on the strength of the relationship between firms and the regulator. We will continue to listen to feedback to help improve how we operate and use the results as we develop our next strategy.We thank all firms who took the time to respond.

We have written to investors in Novus Black Fund UK Ltd about the firm's unreported losses. We have written to investors in Novus Black Fund UK Ltd (Novus Black Fund), an alternative investment fund based in the UK.Novus Black Fund is managed by MCI Global Investment Advisors Limited (MCI). UK regulations require this type of fund to have a regulated fund manager – known as an authorised alternative investment fund manager (AIFM). Among other things, the role of an AIFM is to manage the assets held by the fund and to provide risk management.From the information available, we believe the fund has experienced significant losses that have not been reported to investors. On 8 August 2024 and 6 September 2024, following our invitation, MCI agreed to a number of restrictions, which meant it has to:Make sure no trades or payments were allowed on any trading accounts held by the Novus Black Fund.Close any open investment positions held by Novus Black Fund.Notify investors of these restrictions.We know this will cause concern for people who have invested money in the Novus Black Fund and we will provide further updates in due course. We are unable to comment any further at this time.

Twenty finfluencers are being interviewed under caution by the FCA, as it launches targeted action against finfluencers who may be touting financial services products illegally. The FCA also issued 38 alerts against social media accounts operated by finfluencers which may contain unlawful promotions. Increasing numbers of young people are falling victim to scams, and finfluencers can often play a part. Nearly two-thirds (62%) of 18 to 29-year olds follow social media influencers, 74% of those said they trusted their advice and 9 in 10 young followers have been encouraged to change their financial behaviour.Steve Smart, joint executive director of enforcement and market oversight at the FCA said:'Finfluencers are trusted by the people who follow them, often young and potentially vulnerable people attracted to the lifestyle they flaunt.'Finfluencers need to check the products they promote to ensure they are not breaking the law and putting their followers' livelihoods and life savings at risk.'Notes to editorsFinfluencers are social media personalities who uses their platform to promote financial products and share insights and advice with their followers; there has been a significant increase in finfluencers over recent years. These people are not FCA authorised and are unqualified to be giving financial advice to the younger and often very impressionable age groups who follow them.The FCA is unable to name those targeted for interview.The individuals are being interviewed voluntarily under caution using the FCA’s criminal powers.The FCA has already taken action against nine individuals and finfluencers for promoting an unauthorised trading scheme.Consumers should check the FCA’s warning list before making any decision about how to invest their money. The FCA’s InvestSmart page contains useful information to help people make better investment decisions.Find out more information about the FCA.

The FCA has placed restrictions on Business Agent Limited. The action follows concerns about the firm’s failings related to its 'Nextcrowd' platform. The move to restrict Business Agent Limited came on 22 July 2024, after our review exposed significant regulatory breaches. Following a review of the firm’s representations, we issued a Second Supervisory Notice on 10 September 2024, detailing the findings and the restrictions imposed.Key concerns uncoveredThe review found a number of areas of concern about Business Agent Limited's operations, including:Unauthorised handling of client money - the firm held and controlled client funds without the necessary permissions.ISA regulation compliance issues - the firm received ISA subscriptions into accounts that were not properly set up under the ISA Regulations.Lack of systems and controls - the firm did not implement effective measures to:manage potential conflicts of interestconduct adequate due diligence on investments listed on its Nextcrowd platformFailure to disclose information - Business Agent Limited did not supply requested details about individuals connected to the firm.Potential breach of financial promotion rules - there may be compliance issues related to the approval of financial promotions.Advice for affected investorsWith the restrictions now in place, Business Agent Limited can no longer act as an ISA Manager. Investors with ISAs managed by the firm are urged to contact Business Agent Limited directly if they have concerns.The restrictions relate to the platform not the investments. However, investors should reach out to the issuer of their investments to decide if there will be any impact.You can read a copy of the Second Supervisory Notice which outlines further details about our concerns and the basis for imposing the restrictions.

We often get asked about the number of firms we’ve registered, as well as the process itself. Some have suggested we’re too tough on crypto firms, setting the bar too high for registration. It’s even been said our approach could stunt innovation and call into question the UK’s position as a global financial leader.We never turn applications down out of hand. But we treat the risk of firms being used for money laundering extremely seriously. Allowing illicit money to flow freely can destroy lives. Terrorism, organised crime, sanctions evasion and human trafficking are just some of the real-world issues we’re helping tackle by maintaining the standards the Money Laundering Regulations (MLRs) require.Relaxing our standards and creating a race to the bottom also won't ensure people and our markets are protected or even work well. Innovations built quickly on unsafe, unregulated and untrusted foundations become a house built on sand – likely to collapse. Instead, we want to closely collaborate with partners across government, industry and other jurisdictions to develop a crypto sector that’s built on reliable, sturdy foundations. By doing this we can help enable safety, security and sustainable growth for years to come.Setting the stage for successKeeping financial crime out of our markets is critical. So too is enabling trust in our financial system. We know that setting and maintaining standards people can trust is a key part of any thriving, competitive sector. That's why we hold all firms seeking registration, not just crypto firms, to strong and universal standards.But we also know the crypto industry is still developing, and this can present challenges for those adapting to new regulatory processes. We actively want to work with you. Engage with us early through our pre-application meetings and use the wide range of practical support we offer throughout the process.No 2 registration applications are ever the same. So, our guidance, pre-application meetings and practical examples are there to help each individual applicant. Our decision on whether to register isn’t just based on the controls and systems firms have in place. We look at the environment they operate in, the people involved in these processes and the customers they want to reach. All this means the time it takes to reach a decision can and will vary.I’m sure the number of crypto firms we’re registering will remain under the spotlight as we continue to set out the UK’s crypto regulatory regime. Equally, our focus must remain fixed on doing our job, protecting consumers and the vital integrity of our financial system. What we will do is support prospective firms to meet the required standards and only register firms that do. We’ll continue to weed out those that can cause harm. Because these standards underpin our vision of a healthy, globally competitive and vibrant crypto sector in the UK. By upholding regulatory standards like the MLRs, we aren’t just protecting the present, we’re safeguarding the future.

The FCA has fined Volkswagen Financial Services (UK) Limited (Volkswagen Finance) £5,397,600 for failing to treat its customers in financial difficulty fairly. Volkswagen Finance has agreed to pay over £21.5m in redress to around 110,000 customers who may have suffered harm because of its failings. Between 1 January 2017 and 31 July 2023, Volkswagen Finance failed to understand customers’ individual circumstances or to provide support tailored to their needs. This meant that, in some cases, Volkswagen Finance took cars away from vulnerable customers without considering other options. This risked people being put in a worse position, particularly if they relied on their car to travel to work. Volkswagen Finance’s failings were compounded by poor templated and automated communications.The FCA’s work resulted in Volkswagen Finance setting up a redress scheme to compensate affected customers. It has made improvements to its training for customer service staff and communications. It has also introduced a new debt collections model.Volkswagen Finance’s failings were identified during the FCA’s supervisory work to assess how lenders support borrowers in difficulty. The FCA has worked with nearly 100 lenders in the last 4 years to improve the way they treat struggling customers, securing over £65m in redress for over 320,000 customers. Earlier this year, the FCA strengthened protections for borrowers by making measures it introduced during the pandemic permanent.Therese Chambers, Joint Executive Director of Enforcement and Market Oversight, said:'For many, a car is not a nice to have but a necessity for work or for family life. Volkswagen Finance made tough personal situations worse by failing to consider what those in difficulty might need. It is right it compensates those who suffered. This fine and redress should send clear signals to lenders that they need to properly support those in financial difficulty.'Volkswagen Finance will continue to contact affected customers with details of its redress scheme. Customers do not need to take action before that happens. However, if customers have any questions, would like further information, or their contact details have changed, they should contact Volkswagen Finance using the details provided on its website.This enforcement case was opened following the FCA’s supervisory work. The enforcement investigation took a total of 13 months to complete, compared to an average of 42 months for investigations closed in 2023/24. It is an example of how the FCA is carrying out its enforcement work faster and with greater focus.Notes to editorsRead the Final Notice for Volkswagen Financial Services (UK) Limited.The final notice includes case studies of affected customers. See pages 26 to 28, 30 to 31 and 33 to 35.Volkswagen Finance would have been fined £7,710,885.73, but it agreed to resolve these matters and so qualified for a 30% discount.Volkswagen Finance notified investors and ratings agencies of the enforcement investigation in November 2023.Volkswagen Finance is one of the UK’s largest motor finance providers. Volkswagen Finance offers finance to customers to purchase cars across a range of well-known motor brands, including Volkswagen, Skoda and Porsche.The FCA has previously fined HSBC, Barclays, Lloyds and TSB for failures in how they treated customers in financial difficulty.Find out more information about the FCA.

Speech by Nikhil Rathi, FCA Chief Executive, delivered at the City Dinner, Mansion House. Speaker: Nikhil Rathi, Chief ExecutiveEvent:City Dinner, Mansion HouseDelivered: 17 October 2024Note: This is a drafted speech and may differ from the delivered versionHighlightsGrowth is urgent but it has always been part of the FCA’s story.We are seeking answers about what more we can do to support capital formation, productivity gains and financial services exports.The secondary growth objective is liberating and we are having a much needed, more candid conversation about our collective risk appetite.We need to collaborate to deliver growth.As the prime minister said at Monday’s investment summit, “growth is the cause that binds us together”. It is urgent.In truth, growth has always been part of the FCA’s story. Trusted, liquid markets. Consumers confidently engaging with products they need. Competition. Reduced financial crime.Our longstanding work to support growth, now enshrined in law as a secondary objective.We recognise that the jury is out on whether the FCA is helping to achieve growth.Take our annual firm survey. Increasingly positive on our delivery on consumer protection and market integrity. More ambivalent on our competition mandate. And weakest on international competitiveness and growth. Though 70% say we enhance the UK’s standing as a financial centre. We clearly have more to do. So, how do we keep improving performance on primary objectives, whilst firing on all cylinders on the secondary, too? Literature reviewOur economists have published today a literature review on links between financial regulation and growth.A summary of existing research: a mile wide and an inch deep. It identifies not how much we know but, often, how little. So we will shortly open a research competition to find the missing answers on how we can support:capital formation productivity gainsfinancial services exportsOperational effectivenessWhile we seek those answers, we won’t let up on our operational effectiveness … we know that matters. Your predecessor raised authorisations 2 years ago – 98% of applications are now done within statutory deadlines. Our first application form is now fully digitised. More digitisation is coming.We are not perfect. But some firms now say they can’t always keep up with us.Same rigorous standards. More efficiency.We’re more assertive against harm. 10,000 errant financial promotions tackled. Doubled cancellations of firms breaching minimum standards.And we have more targeted enforcement. 9 successful fraud prosecutions and 21 charges last year – the most ever. A record 45 people facing proceedings.Investigation times are falling – as low as 14 months in recent cases vs a 42-month average. We have proposed being more transparent on enforcement. Not in all cases. But no longer just by exception. Because our current approach doesn’t work. We think a degree more openness can reduce harm, build whistleblower confidence and benefit firms that play by the rules.We know the proposals came as a surprise, falling short of our ‘predictability’ test.And we have heard the strength of opposition and some concern that we could be an international outlier, detracting from competitiveness. We want to work through this together, mindful of all our objectives. Next month, we will provide more data and case studies on how a public interest test could work in practice. This is about firms, not individuals. We hope to reassure the sector – here and overseas – that relatively few cases would be affected, given so many are already disclosed, mostly by firms themselves. Where we decide to name a firm in the public interest, it wouldn’t by default be when an investigation starts. Unlike in many jurisdictions, our enforcement investigations typically follow at least a year of supervisory engagement. We would give firms of all sizes longer to make representations about impact. And we know we have to be particularly mindful of impact on small firms.We’ll continue to listen to feedback and our Board will decide early next year.Ultimately, an FCA that tackles financial crime and deters serious misconduct reduces the drain on growth and competitiveness. We have heard, too, industry concerns about data requests: number, scope, time to respond. A lack of timely data featured in recent market issues:over-the-counter (OTC) trading in the nickel episodeclarity on leverage in the liability-driven investment (LDI) crisisposition information in August’s yen carry trade unwindWe now ingest 1 billion records a day, double a few years ago. We all need to invest in technology to make it easier to share data and ease regulatory burdens. Our move to the cloud and use of large language models means we can analyse it quicker. Digital infrastructureI understand Tom Cruise wants to go beyond the clouds and shoot his next film in space.Unlike Mr Cruise, I don’t see the FCA’s objectives as Mission Impossible. Not if you are alongside us. Katherine Johnson, whose calculations enabled NASA’s first crewed spaceflights, observed: “We always worked as a team...Never just one person.”That collaborative approach is now needed more than ever – I will highlight 2 areas. First, infrastructure underpinning markets. There are bright sparks such as progress on tokenisation in asset management. But a collective execution deficit. Some boosters are not yet fully fired:the Smart Data Bill for the next phase of open bankingthe National Payments Vision timetables for T+1 settlement and share register dematerialisationpensions dashboardsor, critically, a roadmap on identity authenticationOthers are pulling ahead, fast. They’re overcoming vested interests. Government or regulatory action is not always needed. Rachel Kent recommended an investment research hub that requires neither. Just industry funding and leadership. Innovate Finance calls for tech positive rather than tech neutral regulators. Let’s overcome national tech scepticism, and adopt an optimism which could tackle financial exclusion, as biometric identity has done from India to Sweden.Our review of bereavement insurance claims shows far quicker payouts if electronic verification of death became the norm. Risk appetite and regulatory reformWe won’t always get it right. We may back the wrong technology. Is there really appetite for greater risk? We have shown we’re up for it. Our far-reaching listing reforms are already being used. More radical reforms on prospectuses are readying for take-off.We've published competitiveness metrics. Are policymakers willing to set metrics for tolerable failures to create conditions to unlock growth capital? We are a nation of improving savers, but bad investors. Credit to Barclays for shining a light on savers’ excess cash. The advice guidance boundary review seeks innovation so people can access affordable support. But if that results in greater holdings in investments not cash, more will be at risk from short-term market volatility. You have until Halloween to tell us how we can use the Consumer Duty to trim our rule book. Fewer tick boxes, less cost; no doubt welcome. But if we streamline disclosure, affordability or product rules, will firms be spooked if they have responsibility for outcomes without the comfort blanket of rules or guidance?Outcomes-based regulation brings risk as well as opportunity. Our history shows the value of risk taking. A decade ago, the FCA launched Project Innovate – supporting firms trying new things. The FCA’s competition objective spurred the idea – proof of our responsiveness to Parliament. Almost 1,000 firms have benefited. With firms that tested in our sandbox, 50% are more likely to attract capital. 95 foreign regulators have replicated it. We’re now launching an AI Lab. Can we go further still … will the market accept more risk?Can we build on enhanced supervision for newly authorised firms with an L-plate for provisional authorisations … even if that means more firm failures, and increased Financial Services Compensation Scheme (FSCS) costs? What if we bring promising startups together with venture capital? Would we be conflicted, in the event of future problems? The secondary growth objective is liberating. We are now having a much-needed, more candid conversation about our collective risk appetite.ConclusionSo, Lord Mayor, lots done. Much more on its way. We are now in 2024, not 2008. A shift in approach is underway.We won’t always all agree. But we should challenge one another on risks we’re willing to accept for growth.The foresight to invest for the long term, particularly in technology. Acceptance that that brings opportunities to succeed but also to fail. A shift in our public discourse when that happens. And ownership of outcomes we are seeking, leaving behind prescriptive rules.In short, isn’t it time to stop admiring the problems and execute solutions? To collaborate to deliver growth rather than compete for who’s done best.We ask for all your help, such that by next year when Mission Impossible 8 comes out, we can demonstrate that the FCA’s mission impossible is, in fact, possible.

We welcome the government's consultation on the regulation of currently-exempt buy now pay later (BNPL) products. We have long called for these products to be brought into our remit. In 2021, the FCA board backed the Woolard Review recommendation that BNPL be brought into regulation.BNPL can provide benefits for consumers by giving them more payment options and support merchants in selling their goods and services. But as with other credit products, there are also risks and the potential for harm.Making new rulesWe will consult shortly after legislation is finalised on our regulatory regime for BNPL. This will include our proposed rules and approach to authorising firms. We want to ensure those who find BNPL helpful can still benefit from it, firms can innovate and grow, and consumers are appropriately protected.We’ll consider feedback before we finalise our rules and undertake a cost-benefit analysis to ensure that our approach is proportionate and delivers against our statutory objectives. Firms will then be given a short period to prepare for our rules before they come into effect. We expect to take on regulation of the sector 12 months after legislation is made.Our regulation of BNPL aims to ensure good outcomes for borrowers and alignment with rules already in place for other credit providers. This will include, for example, the need to provide clear and sufficient information so people can decide whether a product is right for them, and a requirement to undertake affordability and creditworthiness checks before money is lent. Firms will also be subject to the Consumer Duty. Borrowers will receive the benefit of other protections, including the right to take any complaints to the Financial Ombudsman Service.Authorising firmsOnce legislation and our rules are finalised, BNPL firms not currently authorised to lend to consumers will need to apply. Merchants offering goods or services in a person’s home and who offer agreements from third-party lenders will need to apply to become authorised for credit broking. We’ll assess all applications and seek additional information from firms where needed, to decide if they can be authorised. We will soon begin engaging with firms we expect will need to become authorised.We intend to put in place a temporary permissions regime (TPR), which will allow firms that need to be authorised to continue with their BNPL activities until their application for full authorisation has been processed. Firms operating in the TPR will need to comply with our rules and we will be able to take action against them.Despite not yet having regulatory oversight of these firms, we’ve already secured changes to unfair contract terms and warned firms about misleading advertising.

We need data and evidence to inform how we can support economic growthThe FCA has always been about supporting economic growth. Trusted liquid markets support growth. Reducing financial crime supports growth. Accessible products for consumers supports growth. Competition supports growth.Last year, to emphasise its importance, Parliament set the FCA a new secondary objective to support growth and competitiveness over the medium to long term.The need for institutions across the UK to come together to support a growth agenda has only increased since then.However, there is no universal agreement on exactly how financial services regulation might best support growth.Should we increase consumer protections so that consumers have the confidence to use the services they need to support engagement in the economy? Or should we focus on reducing the regulatory burden on industry? Can we do both? What is the right balance of risk between consumers and firms?Should we strengthen our oversight of wholesale markets to ensure world-class market integrity and compliance with international norms? Or should we differentiate, innovate, try something new and different, riskier – perhaps cheaper?Or should we focus on encouraging efficient allocation of capital across the economy, incentivising investment in productive assets and disincentivising the speculative?And how much of a role can financial services regulation play by itself? What about other system players, such as domestic and international government authorities, and contextual factors, such as demographic shifts and climate change?Our literature review identifies areas for future researchIn a literature review, we attempt to cover what is known about the connections between financial services regulation and economic growth. This isn’t an FCA view. But a summary: a mile wide and an inch deep. We’ve sought to identify where research exists, and then ask the questions that we at the FCA would, if we had a magic wand, wish we had found answered.However, we hope the scope of the questions we’re engaging with signals the breadth of ambition we have for doing our part in unlocking growth. We hope the framing of those questions helps communicate how we’re thinking about growth and competitiveness. And we hope our suggestions for next steps contribute towards the rich policy and academic debate in a way that, ultimately, will help guide our actions and support some of the difficult decisions we may have to make.We invite collaboration and input from the wider research communityWe have conducted our own research on links between capital markets and growth, and our own reviews (PDF) of how we are meeting our secondary objective to support growth and competitiveness. We have a future looking research programme that, in co-operation with researchers and other public bodies, will try and answer some of the missing questions highlighted in the review.We're also announcing that we will be holding a multi-disciplinary competition later in the year for academics, think-tanks, and research institutions to bid for funds to help move the literature towards practical, actionable recommendations.We welcome suggestions for research we’ve missed or misinterpreted, and other questions that we should be asking. If you do have any comments, please contact growtheconomics@fca.org.uk.Helping our financial services sector support growth is a large and complex challenge. We must face up to it with transparency and co-operation.