UK’s National Audit Office launches FCA review
The UK’s National Audit Office (NAO) has commenced a review of the Financial Conduct Authority (FCA) and its ability to adapt to new changes in the financial sector and meet the evolving “challenges and opportunities for regulation of financial services”.
National Audit Office commences review of the FCA
The move follows “significant changes” introduced or proposed to the FCA’s regulation remit of late, including technological innovations such as cryptoassets and artificial intelligence (AI).
The NAO also sites the Future Regulatory Framework, the new Consumer Duty for regulated firms, as well as a newly proposed statutory secondary objective for the FCA to facilitate the international competitiveness and growth of the UK economy in the medium to long term.
The NAO says the scope of the review will be to “examine how the FCA is working with others, particularly HM Treasury, to take action to meet aspects of the challenges and take advantage of the opportunities posed by recent changes”.
In February, the UK government passed new legislation to bring cryptoassets under the watchdog’s remit, leading to the FCA announcing new toughened rules for cryptoasset marketing last month, which will come into effect in October.
Last week, FCA chief executive Nikhil Rathi also outlined the regulator’s stance on AI in financial services as well as the need to counter the risks it poses with proportionate security measures.
The FCA’s last audit by the NAO took place in 2014, which looked at the creation of the FCA and the Prudential Regulatory Authority (PRA), one year after they were launched to replace the Financial Services Authority (FSA).
