The FCA’s key priorities and what they mean for regulatory due diligence

26th June 2019 3585 - Blog Posts

Regulatory due diligence is in the spotlight as the FCA has announced its business plan and key priorities for 2019/20.

The FCA’s key priorities

The regulator’s key priority is navigating the UK’s financial sector’s relationship with the EU post-Brexit. The FCA stated that “while it continued to face the considerable burden of extracting Britain’s financial services from the EU, the changes also presented an opportunity to rethink how it operates.” Although it is keen to stress that this does not mean a mass elimination of EU regulations – the FCA and Bank of England have pushed for an equivalence of outcome regime to maintain its relationship with the EU in case of a hard Brexit. A key component of regulatory due diligence for financial services firms will therefore be keeping abreast of changes in compliance demands.

Combating financial crime and funding of terrorism

The plan has set out combating financial crime as a key priority, using technology and better engagement with agencies and government bodies. It’s no surprise that this is so crucial as the 5th Anti-Money Laundering Directive from the EU comes into force in January and the regulator will be keen to ensure its stance on AML matches EU equivalence outcomes, regardless of how Brexit plays out. The new directive includes enhanced due diligence and a broader criterion to deal with high-risk countries and much tighter regulation of cryptocurrencies. Firms will need to have a robust anti-money laundering strategy in place in order to maintain regulatory due diligence.

Culture and governance

With SMCR due to be rolled out to all financial services firms by December 2019, the FCA has already demonstrated its seriousness about this aspect of regulatory due diligence by opening twelve investigations and issuing its first fine under the regime, of £1.1 million for misconduct last year. The regulator has outlined in its business plan that this emphasis on culture and governance will remain a key priority, stating: “Our principles and rules help to shape culture and represent a minimum standard for the behaviour of financial services staff.”

Lawson Conner has the skills and expertise to advise and assist with all aspects of compliance and regulation, in line with the key priorities of global regulators. Our award-winning software can manage on-boarding, reporting, anti-money laundering and any other regulatory due diligence, leaving your resources free to focus on core, profit-generating activities.

 

Andrew Frost Executive Director - Lawson Conner

Andrew Frost

Executive Director

E: afrost@lawsonconner.com

D: +44 (0) 203 696 2568