The FCA has published the fourth edition of the Regulatory Initiatives Grid, including 134 initiatives, to help financial services firms plan for upcoming change. Here, we highlight some of the key additions.
Currently a hot topic, the Grid includes several important climate-related additions.
Beyond climate-change, the report details numerous proposals spanning the regulatory landscape. For example:
The Regulatory Initiative Grid closely follows the FCA’s annual perimeter report, published in October 2021. The report suggests a series of reforms to protect consumers and evaluates the ‘perimeter’ or boundary of what the FCA does and does not regulate. In this year’s report, the FCA discuss similar reforms to the Grid such as the ARs regime, ESG issues and the transition to a net zero economy.
However, the report also outlines reform to the Financial Promotions Order (FPO) exemptions and the overseas person exclusion (OPE). Regarding the FPO, the FCA is concerned that unauthorised persons are too often relying on exemptions relating to ‘high net worth’ and ‘sophisticated’ investors to market high risk investments (enabling those firms to issue promotions without approval by an authorised firm). Having been reviewed last in 2005, the FCA consider the rules are no longer fit for purpose and require significant change. Similarly the OPE, which allows an overseas person to carry on specified regulated business with UK clients without requiring UK authorisation, was introduced in the 1980s. Given that financial services have evolved significantly, HMT plans to review the exclusion alongside the UK’s regime for overseas firms more widely.
In light of the evolving regulatory environment, it’s important that financial services firms stay up to date with the latest developments and plan for future changes. If you have any questions relating to the Regulatory Initiatives Grid or wish to know what these changes means for your business, please contact us here. Our team will be happy to help.