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FCA and PRA Publish 2018/19 Business Plans

On April 9, the UK Financial Conduct Authority (FCA) published its business plan for 2018/19. The business plan divides key priorities for the FCA over the coming year into three main areas: (1) the United Kingdom’s withdrawal from the European Union (Brexit); (2) cross-sector priorities; and (3) sector-specific priorities.

The FCA’s business plan anticipates that the level of resource required with respect to Brexit will inevitably reduce the amount of work the FCA can complete in other areas. The FCA has therefore prioritized areas where the risk of harm to consumers, market integrity or competition are greatest, and its intervention will be most impactful.

Regarding Brexit, the FCA has stated that it aims to work with the UK government and ensure an appropriate transition for European Economic Area firms, while working with regulated firms to monitor the risks to its objectives.

The FCA prescribes cross-sector priorities, which include the following:

  • firms’ culture and governance—which includes extension of the Senior Managers and Certification Regime to all firms authorized under the UK Financial Services and Markets Act 2000;

  • financial crime (fraud and scams) and anti-money laundering;

  • data security, resilience and outsourcing;

  • innovation, big data and competition—which includes the FCA’s role as part of the new “cryptoassets task force” launched at the UK government’s International Fintech Conference last month; and

  • treatment of existing customers.

On the same day, the UK Prudential Regulation Authority (PRA) also published its own business plan for 2018/19. The PRA’s business plan covers: (1) Brexit; (2) the implementation of ring-fencing for banks; and (3) technology, as key areas of change to which the PRA will respond this year.

Notable strategic goals in the PRA’s business plan include:

  • having in place robust prudential standards comprising the post-financial crisis regulatory regime;

  • ensuring that firms are adequately capitalized, and have sufficient liquidity, for the risks they are managing or planning to take;

  • ensuring that banks and insurers have credible plans in place to enable them to recover from stress events, and that the PRA has a credible resolution strategy to manage a firm’s failure—proportionate to the firm’s size and systemic importance—in an orderly manner; and

  • delivering a smooth transition to a sustainable and resilient UK financial regulatory framework following Brexit.

The FCA’s business plan, including the sector-specific priorities on page 8, is available here.

The PRA’s business plan is available here.

©2018 Katten Muchin Rosenman LLP

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About this Author

John Ahern, Financial Attorney, London, Katten Law Firm
Partner

John Ahern, partner at Katten Muchin Rosenman UK LLP and head of the London Financial Services group, focuses his practice on banking, financial services, UK and European financial markets, and related regulations. His background in private practice and as in-house counsel at a global investment bank provides him with perspective on the unique regulatory issues facing the wholesale and private banking sectors. John advises multilateral trading facilities, broker-dealers and banks on trading, clearing and settlement as well as custody of securities—both physical and...

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Carolyn H. Jackson, International Attorney, Katten Muchin law firm
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Carolyn Jackson is a partner in Katten Muchin Rosenman UK LLP and is a Registered Foreign Lawyer. She provides US financial regulatory legal advice to a broad range of market participants, including commercial banks, investment banks, investment managers, broker-dealers, electronic trading platforms, clearinghouses, trade associations and over-the-counter derivatives service providers.

Carolyn guides clients in the structuring and offering of complex securities, commodities and derivatives transactions and in complying with US securities and commodities laws and regulations. 

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Nathaniel Lalone, Katten Muchin Law Firm, Financial Institutions Attorney
Senior Associate

Nathaniel Lalone, a partner at Katten Muchin Rosenman UK LLP, has a broad range of experience in the regulation of financial products and financial markets, and frequently provides regulatory and compliance advice to trading venues, clearing houses and buy-side firms active in the over-the-counter (OTC) derivatives, futures and securities markets. He is actively involved in advising clients on the implementation of MiFID 2 and MiFIR in the European Union as well as the international reach of US financial services regulation. He also has significant experience with structuring...

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Neil Robson, private equity fund managers counselor, Katten Law Firm, London
Partner

Neil Robson, a regulatory and compliance partner with Katten Muchin Rosenman LLP, focuses his practice on counseling hedge and private equity fund managers and other investment advisers on operational, regulatory and compliance issues. He regularly addresses Financial Conduct Authority (FCA) and EU authorization and compliance under both the EU Alternative Investment Fund Managers Directive (AIFM Directive) and MiFID, cross-border issues in the financial services sector, market abuse, anti-money laundering and regulatory capital requirements, formations and buyouts of...

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