The FCA recently published its 2022/23 business plan and short to medium-term strategy. The three-year strategy and yearly business plan are of significant interest as they provide an insight into current areas of primary focus for the regulator. In this blog, we highlight the matters that are most likely to impact regulatory reporting as well as other areas of interest to us and our clients.
Data led regulation
In terms of how the FCA will operate going forwards, the key changes relate to the way the regulator will make use of data and use real time intelligence to see how firms and markets are performing generally but also to help them recognise and detect risks at an early stage.
Although the FCA’s data strategy will be published in the coming months it’s already clear that the regulator is keen to become data-led and is looking to establish what information, technology and staff are needed to achieve its objectives. Over time, it will become increasingly likely that any rule changes will be based on actual data.
Market integrity and confidence
The FCA actively monitors transaction reports and other data to identify insider dealing and market manipulation and has emphasised that it’s looking to deliver assertive action on market abuse, and increase the perceived effectiveness of their action to promote market integrity, by introducing a new perception metric.
Separately, the FCA is looking to deliver the Market Surveillance Refresh project and Market Data Processor (MDP) refresh to improve alerting, triage, enquiry analytics and increase their detection capability through advanced analytics and improved data coverage.
Promoting competition and positive change
One of the FCA’s three areas of focus will involve tailoring rules to better suit UK markets in a global context to help prepare financial services for the future. Ensuring the UK is one of the leading markets of choice for issuers, intermediaries and investors alike is designed to reinforce the UK’s position in global wholesale markets.
Interestingly, the eagerly awaited MiFID Transaction Reporting Consultation paper will indicate how much weight the FCA places on each of the three priorities outlined above. In the meantime, it’s clear that the role of data is assuming more and more importance with the regulator as they determine exactly what data they want to receive and how to best use the vast array of reports, transactions and information received since the financial crisis.
- For a conversation with Simon or one of our regulatory specialists about the topics mentioned above, please contact us.