FCA business plan faces ‘months’ of delays due to coronavirus
The Financial Conduct Authority (FCA) today warned its business plan could be delayed for months due to the coronavirus pandemic.
The City watchdog said the “unprecedented” public health crisis had sparked huge uncertainty, adding that it might be forced to rewrite its plan in the coming months.
The stark warning came as the FCA unveiled its latest business plan, which set out its key priorities for the next one to three years.
The regulator said it would attempt to progress with its work where possible without undermining the focus on the coronavirus response, but warned it could be “weeks or months” before it could concentrate on the plan.
“This shock is not like previous economic downturns, but nor will it follow the pattern of a natural catastrophe, where the damage can be sized relatively quickly,” it said.
“Here, there is enormous uncertainty about the size and nature of potential damage.”
The FCA has already rolled out measures to tackle the economic turmoil wreaked by the pandemic and social distancing measures, including emergency guidance for government schemes such as rent holidays and support for small businesses.
The watchdog today said it will also crack down on scams relating to the crisis amid fears criminals could prey on vulnerable consumers.
“There may be some who see these times as an opportunity for poor behaviour — including market abuse, capitalising on investors’ concerns or reneging on commitments to consumers,” it said.
“Where we find poor practice, we will clamp down with all relevant force.”
Aside from Covid-19, the FCA warned that pension freedoms had created a “significant risk of harm” for consumers and outlined a new campaign to protect consumers from high-risk investments.
The watchdog also said it will transform its own approach to regulation in response to the pandemic, with a focus on making faster and more effective decisions.
“At a time when many people and businesses are suddenly finding themselves in acute financial difficulty, and investors are finding it ever more challenging to make investment decisions, it is right that the core priorities of the regulator’s business plan go to the heart of some of the most immediate issues,” said Simon Turner, a partner in EY’s financial services regulation practice.
“The message to firms is clear: act now in a way you will be proud of when we come out of this crisis.”
Sarah Isted, partner at PwC, said: “The priorities announced in the FCA’s annual business plan underscore the extent to which the Covid-19 pandemic has fundamentally changed the financial landscape in the short and medium term.
“Beyond Covid-19, the FCA continues to prioritise climate change, technology, operational resilience, financial crime and culture. As the immediate implications of the pandemic become clearer, these areas will all remain important.