FCA updates perimeter report

The FCA has updated its perimeter report setting out the scope of what it does and does not regulate.

The report describes specific issues the FCA perceives around its regulatory perimeter, and the action it is taking in response.

This year’s report highlights:

  • FCA’s approach to its gateway and its holistic approach to higher-risk firms;
  • FCA’s department that aims to deliver an integrated approach to tackling scams, perimeter breaches and non-compliant financial promotions;
  • the challenges it faces in identifying harms caused by unregulated activities given the limited data it receives;
  • the business models most likely to lead to risks of harm and FCA’s expectations of relevant firms- FCA specifically focuses on unregulated debt advice lead generators, the AR regime, outsourcing/third party service providers and deposit aggregators;
  • the ongoing struggles caused by the lack of a complete definition of “insurance”, and its concerns that many firms are providing insurance while artificially claiming they do not;
  • the concerns about what is “carrying on insurance business in the UK” especially post-Brexit;
  • unauthorised firms artificially using a group policy structure for offer customers the benefits of the policies;
  • the risks of currently unauthorised BNPL firms;
  • the risks presented by Employer Salary Advance Schemes, which it is deemed it would be disproportionate to regulate;
  • SME lending;
  • consumer investments;
  • marketing of UCIS and overseas funds and of high-risk investments to retail customers;
  • use of FPO exemptions;
  • technological changes;
  • payment evolution;
  • open banking and access to cash;
  • cryptoasset regulation and promotion; and
  • in the wholesale markets, ESG data and rating providers, the current lack of SMCR for RIEs and CRAs, the use of the overseas persons exclusion and regulation of oil and energy market participants, and investment consultants.

FCA also plans to keep financial promotion approval activity under review following the introduction of the “approval gateway”.

FIN. Team