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FCA Compliance Priorities for 2024: A Detailed Overview

FCA Compliance Priorities for 2024 – The Top 10

FCA ComplianceFCA Compliance priorities are always at the forefront of the regulator’s agenda; as well as previous themes and projects that are ongoing. For many Compliance Officers, whilst still doing their day job as proactively as possible, it is not always possible to keep an eye on all the areas of the moving goal posts, and to remain effective, in what we know to be the hardest job in financial services firms.

“Additionally the clear management of the applicable issues satisfies the SMCR ‘Reasonable Steps’, if handled properly.” Lee Werrell Chartered FCSI, Owner

We provide and overview of the main issues for you so you can check off those that do not apply and create projects for those that do. Don’t forget, we can help you on either a regular or ad-hoc project basis. If you are fed up with being a small account with a large consultancy, come and speak to us.

FCA Compliance Priority 1: Consumer Duty
Consumer duty remains paramount on the agenda of every retail firm entering 2024. Despite the absence of legacy products within the impending July deadline, numerous enterprises have transitioned from project-centric teams to their routine operations last year. Nonetheless, it is increasingly evident that further enhancements are necessary. In the forthcoming months, a significant emphasis will be placed on data generation to support robust narratives for upcoming board presentations in July. Firms are advised not to procrastinate on adopting the FCA’s recommendations for an unbiased review of their implementations, scheduling reviews well in advance of board meetings to ensure timely adoption of any suggested changes.

FCA Compliance Priority 2: Fraud
The issue of fraud surged to prominence for every major UK enterprise in October, spurred by new laws imposing corporate criminal liability for failing to prevent fraud. This global liability risk has prompted a widespread reassessment of fraud prevention policies and the introduction of refreshed training for staff. The FCA now scrutinizes the adequacy of systems and controls with heightened vigilance, enhancing awareness of cyber threats that might compromise consumer data. Such initiatives underscore the importance of investing in employee training to fortify the first line of defense against fraud.

FCA Compliance Priority 3: Interest Ratesfca compliance
With interest rates on the rise, and now applicable to accounts, numerous firms have identified flaws in their operational procedures, with some neglecting necessary updates. The FCA has made clear its expectations that interest accrued on customer accounts should be duly passed on, a stance it intends to assertively uphold following reminders issued in late 2022 to investment platforms and Sipp operators.

FCA Compliance Priority 4: Vulnerable Customers
The intersection of the cost of living crisis and consumer duty has brought the plight of vulnerable customers into sharper focus. Many firms have overhauled their processes to centralize functions, thereby enhancing consistency through specialist staff and improved data quality. The year 2024 will see firms intensify efforts to identify and support customers facing financial hardships.

FCA Compliance Priority 5: Data Quality
In its transformation into a data-centric regulator, the FCA expanded its team in 2023 by hiring data analysts and synthetic data experts. The deployment of these specialized skills will bring under scrutiny the quality of data submitted by firms. It is imperative for governance structures to ensure the integrity of data through effective supervision of the data lifecycle.

FCA Compliance Priority 6: Operational Resilience
As the March 2025 deadline for operational resilience approaches, the FCA, supported by the PRA, will likely increase its outreach to ensure firms are aligning their critical business services with defined impact tolerances. This includes evaluating governance frameworks and the lessons learned from resilience testing.

FCA Compliance Priority 7: Speed of Action
The National Audit Office’s recent critique of the FCA’s delayed responses has mandated a swifter enforcement approach. Moving forward, the regulatory body will expedite its enforcement processes to address non-compliances more rapidly.

FCA Compliance Priority 8: Investment Advice Regime
The FCA, in conjunction with the government, continues to refine the framework for a new investment advice regime aimed at the broader mass market. This initiative is expected to mature significantly through 2024, narrowing the advice gap for consumers with straightforward financial needs.

FCA Compliance Priority 9: Cryptoassets
With the increasing prevalence of scams, the regulatory focus on cryptoassets remains intense. The upcoming year will see enhanced enforcement of compliance with anti-money laundering statutes, including the KYC and SOW regulations.

FCA Compliance Priority 10: Payment Services
The FCA continues to monitor the adherence to CASS rules, emphasizing that only deposit takers should hold client money. Firms misplacing client funds with non-deposit takers will face stringent warnings from the FCA, reinforcing the importance of compliance in this area.

This nuanced review of the FCA’s compliance priorities for 2024 underscores the evolving landscape of regulatory challenges and the imperative for firms to stay ahead through proactive governance and robust operational controls.

FCA Compliance

 

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