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Wider Implications Framework Annual Report 2023/24 (& Consumer Duty)

The Financial Conduct Authority (FCA) has released its Wider Implications Framework Annual Report for 2023-2024, outlining key focus areas and regulatory updates aimed at enhancing the resilience and integrity of the UK's financial markets and consumer protection mechanisms. This report underscores the FCA's proactive approach to addressing evolving economic conditions, regulatory challenges, and market dynamics.

Key Focus Areas:

Consumer Duty:

The Consumer Duty, effective from 31 July 2023, requires firms to act in ways that ensure positive outcomes for retail customers. The FCA is dedicating significant resources to supervise and enforce compliance with this duty, ensuring firms support consumers effectively, especially amid rising living costs​.

Operational Resilience:

The FCA emphasises the need for firms to bolster their operational resilience against cyber threats, operational risks, and geopolitical uncertainties. Firms must demonstrate their ability to remain within specified operational impact tolerances by 2025.

Financial Crime Prevention:

Reducing and preventing financial crime remains a priority for the FCA. This includes enhancing authorisation processes, improving firm assessments, and investing in data-driven analytical tools for anti-money laundering (AML) supervision​ (KPMG)​.

Market Abuse:

The FCA plans to intensify efforts against market abuse by ensuring firms have robust systems and controls in place. It aims to deter wrongdoers through stringent sanctions and increased investigation and prosecution efforts.

Future Regulatory Framework (FRF) and Edinburgh Reforms:

Over £12 million will be invested to support the FRF and Edinburgh Reforms, which aim to enhance the UK’s economic growth and international competitiveness. This includes integrating retained EU law into the FCA Handbook and establishing a cost-benefit analysis panel to enhance regulatory efficiency​ (KPMG)​.

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Action to Take for Firms:

Review and Implement Consumer Duty:

Ensure your firm is prepared for the Consumer Duty's requirements, focusing on delivering positive outcomes for retail customers. Review and adjust policies and practices to meet the higher standards set by the FCA.

Strengthen Operational Resilience:

Invest in systems and processes that enhance your firm's ability to withstand and recover from operational disruptions. Conduct assessments to ensure compliance with the FCA's operational resilience standards.

Enhance Financial Crime Defences:

Strengthen your firm’s AML and fraud prevention measures. Ensure robust internal controls and regular assessments to identify and mitigate financial crime risks effectively.

Prepare for Regulatory Changes:

Stay informed about the FRF and Edinburgh Reforms. Align your compliance strategies with the new regulatory requirements and participate in consultations where possible to influence future regulations.

Engage with the FCA:

Maintain proactive communication with the FCA. Ensure timely submission of required reports and data and stay updated on regulatory developments to adapt swiftly to new requirements.  

What Next?

If you need any help navigating the FCA regulations, changes or authorisation please do note hesitate to get in touch with us today. We'd love to help you!

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