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FCA regulatory update – July 2021

Diversity and inclusion in the financial sector – working together to drive change (DP21/2)

The FCA has published a discussion paper seeking views on ideas to improve diversity and inclusion in financial services, alongside the Bank of England and Prudential Regulation Authority.

The FCA are seeking feedback on policy options, including, among others, using targets for representation, measures to make senior leaders directly accountable for diversity and inclusion in their firms, and linking remuneration to diversity and inclusion metrics. The DP also sets out the regulators’ approach to considering diversity and inclusion in non-financial misconduct.

The FCA believe increased diversity and inclusion will advance their objectives through improved governance, decision making and risk management within firms, a more innovative industry, and products and services better suited to the diverse needs of consumers.

Firms have made some progress on diversity and inclusion, but they believe much more needs to be done to create truly diverse and inclusive organisations that meet the diverse needs of those the FCA serve. The FCA will be issuing a pilot survey later this year which will help to develop the proposals set out in the discussion paper and test how firms can provide data with a view to considering regular reporting in the future.

The FCA are seeking views by 30 September. This is the beginning of a really important conversation on the role of regulators in delivering a more diverse, more inclusive industry; please have your say. The FCA will use the feedback and data received to develop detailed proposals, with a joint consultation planned for Q1 2022.

Click the link to read the Discussion Paper here:

Review finds firms falling short on assessing values of their funds

The FCA has published a review into how Authorised Fund Managers (AFMs) carry out annual Assessments of Value (AoVs).

While some firms were conducting AoVs well and had cut fees for their funds, others did not meet the FCA’s standards.

The FCA expect all AFMs to consider these findings, to use them to assess their AoV processes and to make changes to address any shortcomings.

Click the link to review how AFMs should carry out annual Assessments of Value: https://www.fca.org.uk/publications/multi-firm-reviews/authorised-fund-managers-assessments-their-funds-value

FCA Business Plan, Annual Report and Annual Public Meeting

The FCA published their Business Plan for 2021/22 and Annual Report for 2020/21 on 15 July.  The chief executive, Nikhil Rathi, also gave a speech setting out their role and future plans as we move on from the coronavirus pandemic and Brexit, the kind of organisation the FCA need to be to deliver for consumers and markets in this new environment, and their plans for fundamental transformation of the FCA to meet their ambitions.

The FCA’s Annual Public Meeting will take place virtually on 28 September 2021.  For further information and to register please visit the FCA webinar portal.

Click the link to review the Business Plan 2021/22: https://www.fca.org.uk/publications/business-plans/2021-22

Click the link to review the Annual Report for 2021/22: https://www.fca.org.uk/publications/annual-reports/our-annual-report-accounts-2020-21

Disclaimer

The contents of this article are taken from the Financial Conduct Authority’s (“FCA”) 15th July 2021 regulation round up communication and are communicated by, and the property of, Thornbridge. Thornbridge is a trading name of Thornbridge Investment Management LLP which is authorised and regulated by the Financial Conduct Authority.

The information and opinions contained in this article are subject to updating and verification and may be subject to amendment. No representation, warranty, or undertaking, express or limited, is given as to the accuracy or completeness of the information or opinions contained in this article by Thornbridge Investment Management LLP or its directors. No liability is accepted by such persons for the accuracy or completeness of any information or opinions. As such, no reliance may be placed for any purpose on the information and opinions contained in this article.