Regulatory Update Feb 2023

In this issue we cover: 

FCA portfolio letter to asset management firms

Cryptoassets – consultation on the UK’s regulatory approach

Financial watchdog blocks misleading adverts

Finance for positive sustainable change: governance, incentives and competence in regulated firms

 

FCA portfolio letter to asset management firms

In a recent FCA Dear CEO letter to asset managers it sets out the supervisory strategy since moving asset management into a newly formed supervision, policy and competition structure at the FCA. The letter covers:

• product governance;
• ESG and sustainable investment;
• product liquidity management;
• investment in operations and resilience; and
• financial resilience.

Cryptoassets – consultation on the UK’s regulatory approach

HM Treasury has recently issued a consultation on the regulatory regime for cryptoassets. This follows the Government’s announcement in April 2022 to introduce a new regulatory regime.

The proposals set out HM Treasury’s four objectives:

• encourage growth, innovation, and competition;
• enable consumers to make decisions with an understanding of the risks involved;
• protect UK financial stability; and
• Protect UK market integrity

Questions and comments are invited before 30 April 2023.

Financial watchdog blocks misleading adverts

The FCA has published a report showing they forced firms to change or remove 8,582 promotions in 2022, 14 times more than 2021. In addition, the regulator published more than 1,800 alerts warn consumers of scams.

The FCA has also been working with several big tech companies to change their advertising policies to only allow financial promotions that have been approved by FCA authorised firms.

The report highlights a particular concern over social media influencers who publicise content on financial matters.

The FCA is currently consulting on introducing tougher checks for firms who want to approve financial promotions and is introducing the Consumer Duty in July under which firms face tougher rules on the information provided to consumers.

Finance for positive sustainable change: governance, incentives and competence in regulated firms

The FCA has published a discussion paper DP23/1  ‘Finance for positive sustainable change: governance, incentives and competence in regulated firms’. It sets out their ideas and essays from third parties on how firms could integrate sustainability in their governance, executive accountability, and remuneration frameworks. It is hoped this will encourage investment which will support the end goal of net zero.