UK Financial Conduct Authority Statement On The Chancellor’s Mansion House Speech

The financial services sector is the engine of the country’s economy. A successful sector drives prosperity for companies, getting money to flow to small and medium-sized businesses allowing them to invest and grow.

The UK is a magnet for talent and investment, with London ranking as the world’s second financial centre. We are the world leader for international bond issuance, foreign exchange trading and cross-border banking. The UK’s asset management, hedge fund and private equity sectors continue to be the largest in Europe, alongside our insurance and long-term savings market.

We're a partner for growth and we support the Chancellor’s vision for achieving it. Our regulation enables a fair and thriving financial services sector that allows people to spend, save and invest in their own future.

We have fully embraced our secondary international competitiveness and growth objective, embedding it into our processes, policy making and culture. We’ve established a dedicated team to advise on implementing the new objective and our policy work now clearly articulates how we have applied the objective.

Our reform of UK listing rules – the most significant in 3 decades – aims to encourage a wide range of companies to list and raise capital in the UK, increasing opportunities for investors.

A new platform to allow private companies to trade their securities (PISCES) will support companies to scale up and grow and provide investors with better access to exciting companies. We are engaging market participants, industry leaders, trade bodies and exchanges to develop a proportionate regulatory framework and we look forward to publishing our consultation shortly.

We’ve provided asset managers greater freedom in how they pay for research and are streamlining complex EU rules in the alternative asset management sector, cementing our position as the world’s second largest asset management hub.

Wholesale market firms wishing to expand into the UK can now benefit from our dedicated pre-application support service. We’re supporting UK and international insurance brokers by clarifying our conduct rules and distribution services.

In response to the Mansion House speech, we have published updates on specific issues raised in the speech:

• Environmental, social and governance (ESG) ratings 
• Advice Guidance Boundary Review
• National payment strategy
• Modernising the redress system

We will work quickly with the Government, industry, consumer groups and other interested parties as we deliver this important work.

Recognising the vital role we play in enabling new firms to get off the ground, we have improved our authorisation process with 98% of cases now assessed within statutory deadlines, up from 78.9% in Q1 of 2022/23. Our innovation services, such as sandboxes, support firms to test drive and refine their innovative new products while our early and high growth oversight programme helps new firms meet standards so they can grow.

And we have been seeking views on how we seize the opportunity of the Consumer Duty to streamline our rulebook, so we can lower costs for businesses and support the competitiveness and growth of the economy.

When it comes to growth, regulation is one part of the picture. We know there’s more to do but we are committed to playing our part.

Background

• We have received the Chancellor’s letter, and we will respond in due course. 
• In July the FCA published its first report on the Secondary International Competitiveness and Growth Objective (SIGCO) to outline how the FCA is committed to advancing the new objective set for us by Parliament in 2023 to facilitate the international competitiveness of the UK economy and its growth in the medium to long term. 
• We have been clear our regulatory approach towards innovation will be proportionate – we will use and adapt our existing regulatory tools to protect consumers and markets while making sure we continue to embrace innovation. 
• Our outcomes and principles-based approach to regulation, including the Senior Managers Regime and Consumer Duty, should mean firms have scope to innovate while protecting consumers and market integrity. 
• The FCA is a founding member and convenor of the Global Financial Innovation NetworkLink is external , where over 80 international regulators collaborate and share approaches to complex emerging areas of regulation, including ESG, artificial intelligence (AI) and crypto.
• We are also 1 of 4 regulators that form the UK Digital Regulation Cooperation Forum, pooling insight and experience on issuesLink is external such as AI and algorithmic processing. 
• We published a Feedback Statement in 2023 on AI and machine learning, outlining valuable insights into the industry’s views.
• The FCA’s data chief Jessica Rusu has delivered a number of speeches on AI and technology: explaining how AI regulation and innovation relies on collaboration; announcing the FCA’s Digital Sandbox which uses AI to help firms test drive their innovative products; and underlining the importance of digital infrastructure for getting AI integration right.
• Our services cater for the whole product life cycle from product ideation to launch.
  • The Regulatory Sandbox gives firms the ability to test products and services in a live but controlled environment.
  • Our Innovation Pathways service includes guiding firms through regulation through one-to-one discussions with a dedicated case manager assigned to provide insight, clarity and feedback on the way in which their business model fits within the regulatory framework.
  • The Digital Sandbox provides GDPR-compliant datasets and APIs, secure development environment and access to community for innovative businesses.