FCA commits to reducing regulatory burden facing UK businesses

The FCA says it aims to support 300 newly authorised businesses by next spring.

In the midst of a looming recession, the Financial Conduct Authority (FCA) has expressed a need to reduce the regulatory burden UK businesses face.

In a speech at City and Financial Global's The Future of UK Financial Services Regulation Summit, FCA executive director of markets, Sarah Pritchard, said the governing body wants to establish a “simplified advice regime” to remove some of this burden.

This will, in turn, enable firms to reduce their charges and make advice on mainstream investments more accessible to mass-market consumers.

“The weight of regulation should be commensurate with the level of risk but moving away from the one-size-fits-all approach mandated by MiFID will be complex and it will need assistance and input from industry,” Pritchard said.

She also spoke about the need to support innovation, agility and robustness.

The FCA currently aims to support 300 newly authorised businesses by spring 2023.

According to Pritchard, backlog for pending authorisations has reduced by 40 per cent in the last year.

“We know we can encourage people to do business here by providing regulatory certainty,” Pritchard said.

“You will have already seen us become a more outcomes focused regulator and this deliberate approach is outlined in our new strategy.

“By being focused on outcomes - rather than writing rules for every scenario - we can support new businesses and entrants to the market, as well as existing firms who are adapting their business models.”

In addition, the FCA is seeking to use a testing approach to identify solutions to reducing harm, particularly in authorised push payment fraud, which exceeded card fraud for the first time last year.

“We aim to encourage a balanced approach of fostering innovation while offering consumers protection – helping the UK to remain the most attractive destination for fintech in Europe. Globally, we are second only to the US,” she said.