About the Regulatory Initiatives Grid
The Regulatory Initiatives Grid provides a comprehensive overview of upcoming regulatory initiatives, helping the financial services industry and other stakeholders understand and prepare for changes that may significantly impact their operations.
The Forum
The Bank of England (BoE)
Competition and Markets Authority (CMA)
Financial Conduct Authority (FCA)
Financial Reporting Council (FRC)
The Treasury (HMT)*
Information Commissioner’s Office (ICO)
Payment Systems Regulator (PSR)
Prudential Regulation Authority (PRA)
The Pensions Regulator (TPR)
*Observer member
Ten initiatives to watch
1. Diversity and inclusion of financial services (D&I)
The D&I consultation has historically attracted criticism from some parties. In particular, in March 2024 the Treasury Select Committee went as far as to recommend that the FCA and PRA drop their proposals for data reporting and target setting, expressing concern that these “would be treated by many firms as another ‘tick-box’ compliance exercise, rather than necessarily driving the much-needed cultural change.”
However, following July 2021’s joint Discussion Paper, the PRA and FCA published separate consultation papers on 25 September 2023. These contain policy proposals that aim to support progress in improving diversity and inclusion across the financial sector and tackle non-financial misconduct.
We expect to see the FCA publish a Policy Statement on Tackling Non-Financial Misconduct in the financial sector by the end of the year, to be followed by FCA and PRA Policy Statements on the remaining D&I proposals in 2025.
2. Banking, lending, and credit
Banks, both large and small, have their work cut out to comply with updated/new regulations concerning capital. The final policy on arrangements for the Interim Capital Regime for Small Domestic Deposit Takers (SDDTs) will be published in Q4 2024 and along with the Basel 3.1 Final Policy Statement in Q1 2025.
3. FCA’s proposed revised enforcement guide
Another controversial regulation: the 'name and shame' element of the FCA’s Proposed Revised Enforcement Guide would publicly identify firms under investigation for regulatory violations. The FCA has consulted on this matter and will publish further information in Q4 2024, including case studies, as it continues to engage stakeholders. It aims to share its decision in Q1 2025.
4. Cross-body remuneration review
Those working in the sector will watch this one closely. Following the October 2023 removal of the bonus cap and amendments that enhance proportionality for small firms, the PRA and the FCA are continuing to review the remuneration regime, which is a combination of EU and domestic policies. Expect an update by the end of the year.
5. Review of firms’ treatment of customers in vulnerable circumstances
The FCA is assessing how firms are meeting expectations of its 2021 guidance on how to treat customers in vulnerable circumstances and how this maps to consumer duty outcomes and requirements. Publication expected in Q1 2025.
6. Advice guidance boundary review
The FCA and Treasury are jointly reviewing the boundary between financial advice and guidance. As part of this, the FCA is exploring what support needs to be provided to consumers in relation to their pensions. Expect an FCA consultation paper (without rules) on targeted support (simplified advice) in pensions by the end of the year.
7. External redress guidance
The FCA is reviewing its rules and guidance on identifying harm and conducting firm-led redress exercises. It plans to publish a consultation paper that will cover the identification and reporting of harm, guidance on rectifying harm, and proactive redress exercises. As a result of Consumer Duty measures, there seems to be an upward trend in the number of redress exercises, so they'll have plenty of case studies from which to draw. Expected Q1 2025.
8. Capital deduction mechanisms
Capital deduction for redress: personal investment firms Policy Statement
The FCA has consulted on policy proposals to require personal investment firms to set aside capital for potential redress liabilities at an early stage. Expected Q4 2024.
Review of the prudential regime for personal investment firms consultation paper
Reviewing the appropriateness of the prudential requirements for personal investment firms, potentially leading to including capital and liquidity thresholds and risk management requirements. Expected Q1 2025.
9. The pure protection market study
This is an initiative by the Financial Conduct Authority (FCA) to examine the distribution of pure protection products to retail consumers. The FCA has already sought stakeholder views, and we await an update.
10. FCA study on retail premium finance for home and motor insurance
This market study was announced a day after the grid was published. The FCA aims to investigate whether consumers who use premium finance options are getting fair and competitive deals. It's currently gathering information and stakeholder feedback.
A full list of Grid entries that will impact financial services
Next steps
Explore the full Grid here.
For more information on regulatory changes, contact David Morrey or Ben Farmer.
