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FCA writes to Government on supporting growth

In response to a letter of 24 December 2024, the FCA has written to the Prime Minister, Chancellor and Secretary of State, setting out its ongoing work and plans to support growth.

Digital innovation

The FCA outlined existing plans to:

  • Progress a digital securities sandbox and a roadmap for digital assets starting in asset
    management;
  • Improve credit information with changes to industry governance;
  • Reform online tools explaining pensions, improving pension transfer times, and finalise
    next steps on pension dashboards; and
  • Avoid additional regulations for AI by relying on existing frameworks.

Alongside delivery of the National Payments Vision in 2025, the FCA also plans to go further by introducing a new open banking payment method with PSR and using powers anticipated under the Data (Use and Access) Bill to develop open finance, potentially prioritising SME lending.

It also suggested:

  • Removing the £100 contactless limit, allowing firms and customers greater flexibility,
    drawing on US experience, and levelling the playing field with digital wallets; and
  • Setting new digital service standards, for example requiring firms to accept electronic verification of death to speed up bereavement claims in insurance.

The FCA requested the Governments assistance in this area with digital identity authentication/verification, enhancing the quality of the Companies House database, and digitising the court systems to reduce delays.

Reducing regulatory burden

The FCA highlighted ongoing work to streamline its Handbook, reduce the reporting burden, and make the SMCR more flexible. It then pledged to go further by:

  • Removing the need for Consumer Duty Board Champions now the Duty is in effect;
  • Begin simplifying responsible lending and advice rules for mortgages;
  • Consult on removing maturing interest-only mortgage / other outdated guidance;
  • Work with Government to remove overlapping standards, e.g. the Mortgage Charter; and
  • Review the proportionality of reporting requirements and remove redundant returns, initially expected to benefit 16,000 firms.

The FCA noted that it could go further with Government support by reducing the costs of AML measures, relaxing know-how requirements on small transactions.

Other topics

On unlocking capital investment and liquidity, the FCA notes its existing reform of wholesale markets, including plans to implement a new prospectus regime. It pledges also to accelerate a review of capital requirements for specialised trading firms to improve liquidity.

The FCA also outlined its ongoing work and plans to make it easier for firms to start up and grow, improve exports and inward investment, and generate certainty and predictability in consumer redress.

Laura Wiles