The Financial Conduct Authority (FCA) recently published its third Annual Report, which looks back on the key pieces of work undertaken by the organisation throughout 2015/16. The FCA has also published a report summarising the activities it has undertaken to promote competition in financial services in its first three years.
The Annual Report details work the FCA has carried out over the last year, including:
• Implementing the Senior Managers and Certification Regime, which seeks to deliver a step change in individual accountability;
• Influencing policy and technical standards internationally through bodies such as the European Securities and Markets Authority, the International Organisation of Securities Commissions and the Financial Stability Board;
• Making significant progress on major initiatives such as the Markets in Financial Instruments Directive and the Market Abuse Regulation;
• Working closely with stakeholders through the Debt Market Forum, Project Innovate and the Financial Advice Market Review;
• Taking tough action on past transgressions, issuing penalties totalling £884.6m; and
• After taking over regulation of consumer credit in April 2014, successfully integrating over 25,000 firms into our regulatory regime. The FCA now regulates over 56,000 firms and 125,000 approved persons.
The Competition Report, the first to be published by the FCA since it gained a competition objective in 2013, presents detail about activities carried out by the FCA to promote competition, and provides further insight into competition in selected markets. Activities carried out since 2013 include:
• Launching ten new market studies or calls for input. These included looking at investment and corporate banking, asset management, competition in the mortgage sector and the use of “Big Data” in the retail general insurance sector;
• Publishing the final findings following the Retirement Income Market Study, proposing remedies which included making customers more aware of annuity rates available on the open market when discussing annuities, and simplifying pension providers’ at retirement communications with their customers; and
• Publishing the interim report into the credit card market where 34 million consumers’ credit card accounts were analysed, approximately 40,000 consumers were surveyed and input was received from 24 firms in relation to business models. Overall, it was provisionally found that competition is working fairly well for most consumers. However, there are concerns about consumers with persistent levels of debt or who only make minimum payments as it was found that most firms do not routinely intervene to address this behaviour.
John Griffith-Jones, Chairman of the Financial Conduct Authority, said: “Our overriding goal is for markets to work well, even when the external environment affecting financial services is challenging. It’s pleasing therefore that, despite this, on the whole, UK markets have worked well. As a regulator we focus on the areas which are not working so effectively, and where problems do occur our aim is to respond quickly. A simple quantitative assessment of our achievements during the year is not possible, but there are some indicators of a positive direction of travel which are highlighted in this report. We were given our competition mandate in 2013 and tasked with producing a standalone annual competition report to show how we are delivering against our objectives. This report is published alongside the FCA’s annual report, which covers all three of our interlinked objectives. I hope both documents demonstrate both the breadth of our activities and the difference we make to UK consumers, financial services and the wider economy.”
The FCA’s Annual Public Meeting will be held on 19th July 2016 at the Queen Elizabeth II conference centre where members of the public can ask questions about the reports.
