Topic: FCA to move faster to remove unused firm permissions
Date: 9th September 2021
Overview: The FCA has published draft guidance on a new power that allows it to move faster to remove regulatory permissions that are no longer being used by financial services firms.
Incorrect or outdated permissions on the Financial Services (FS) Register can mislead consumers about the level of protection offered by a firm or give credibility to a firm’s unregulated activities.
The changes will help to prevent scams and to ensure the FS Register presents a clearer picture of the permissions firms hold. Firms are required to confirm that the information on the FS Register is accurate on an annual basis.
The new power, granted to the FCA via the Financial Services Act 2021, will streamline and shorten the process of removing firm permissions. The FCA will be able to start the cancellation process as soon as it considers permissions are not being used, by serving 14 days’ notice on a firm. The FCA will then be able to vary or cancel permissions after 1 month.
As part of its transformation, the FCA recently announced separate changes to its decision-making and governance to enable it to make faster and more effective decisions.
Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA, said:
‘We want to use this power to take quicker action to prevent consumers being misled. It is part of our transformation and drive to be more assertive, drawing on an innovative approach and using new streamlined processes to make important regulatory interventions.
‘Firms can and should apply to have their permissions cancelled if they no longer plan to use them but many fail to do so. We understand that business models may evolve over time and there may be valid reasons why regulatory permissions are not being used, but unless firms notify us and keep their permissions up to date, they will risk losing market access’.
The FCA has already undertaken a ‘use it or lose it‘ exercise with firms – reminding them of their obligation to review regulatory permissions and ensure they are up to date or removed if not needed.
As part of that work firms that have not used their permissions for 12 months or more are at risk of having them cancelled via the existing cancellations process. It is part of the FCA’s response to tackle issues raised by Dame Elizabeth Gloster’s review into the regulation of London Capital & Finance (LC&F).
Link: https://www.fca.org.uk/news/press-releases/fca-move-faster-remove-unused-firm-permissions
Topic: Productive finance working group publishes recommendations addressing the barriers to investment in less liquid assets
Date: 27th September 2021
Overview: The Productive Finance Working Group has today published a series of recommendations which could facilitate greater investment in longer-term, less liquid assets. The Group is industry led, co-chaired by the Governor of the Bank, the Chief Executive of the FCA, and the Economic Secretary to HM Treasury.
Appropriately managed, investment in such assets has the potential to generate better returns for investors, including those saving for retirement in defined contribution (DC) pension schemes, given their typically long-term investment horizons. These types of pension schemes are an increasingly important vehicle for saving for retirement, given their assets have increased from around £200bn in 2012 to over £500bn today, and are expected to double to £1tn by 2030.
Investment in productive finance assets can also benefit the wider economy by supporting the economic recovery from Covid, facilitating the transition to a net zero economy and supporting financial stability. Greater investment in longer-term productive UK assets, such as research and development, technology, and infrastructure can provide a boost to long-term growth and support an innovative, greener future for the UK.
However there are a number of barriers and challenges to investment in less liquid assets and therefore these investment need to be carefully managed. The aim of the Group, convened in November 2020, was to propose solutions to such barriers, including a roadmap, timetable and set of actions.
In its report published today, ‘A Roadmap for Increasing Productive Finance Investment’, the Group has published four recommendations, underpinned by 13 specific actions, with a focus on supporting DC pension schemes to invest and developing the long-term asset fund (LTAF) structure.
Andrew Bailey, Governor of the Bank of England, said:
‘Addressing the investment barriers which exist for long-term assets can help unlock valuable economic opportunities. Carefully managed, this is especially important for people saving in their retirement and the broader economy. The input that the working group has provided over the past year in coming up with these recommendations should be commended and it is vital that they are implemented.’
Topic: Productive finance working group publishes recommendations addressing the barriers to investment in less liquid assets
Date: 27th September 2021
Overview: The Productive Finance Working Group has today published a series of recommendations which could facilitate greater investment in longer-term, less liquid assets. The Group is industry led, co-chaired by the Governor of the Bank, the Chief Executive of the FCA, and the Economic Secretary to HM Treasury.
Appropriately managed, investment in such assets has the potential to generate better returns for investors, including those saving for retirement in defined contribution (DC) pension schemes, given their typically long-term investment horizons. These types of pension schemes are an increasingly important vehicle for saving for retirement, given their assets have increased from around £200bn in 2012 to over £500bn today, and are expected to double to £1tn by 2030.
Investment in productive finance assets can also benefit the wider economy by supporting the economic recovery from Covid, facilitating the transition to a net zero economy and supporting financial stability. Greater investment in longer-term productive UK assets, such as research and development, technology, and infrastructure can provide a boost to long-term growth and support an innovative, greener future for the UK.
However there are a number of barriers and challenges to investment in less liquid assets and therefore these investment need to be carefully managed. The aim of the Group, convened in November 2020, was to propose solutions to such barriers, including a roadmap, timetable and set of actions.
In its report published today, ‘A Roadmap for Increasing Productive Finance Investment’, the Group has published four recommendations, underpinned by 13 specific actions, with a focus on supporting DC pension schemes to invest and developing the long-term asset fund (LTAF) structure.
Andrew Bailey, Governor of the Bank of England, said:
‘Addressing the investment barriers which exist for long-term assets can help unlock valuable economic opportunities. Carefully managed, this is especially important for people saving in their retirement and the broader economy. The input that the working group has provided over the past year in coming up with these recommendations should be commended and it is vital that they are implemented.’