The FCA will make it easier for firms to test new products and support new firms applying for regulatory approval as part of its work programme for 2025-2026.
The regulator has announced a series of enhancements to its regulatory framework in the past few weeks, including reforming rules for investment managers and increasing the LTI flow limit threshold for mortgage lending.
Last month, it also announced proposals as part of its work to streamline rules, reduce burdens on businesses, and improve outcomes for consumers following the introduction of Consumer Duty.
Today, it has announced new support for firms testing innovative products and seeking authorisation.
Every firm that uses the FCA's Regulatory Sandbox to test innovative products will be provided with an authorisation case officer from the start, helping the right firms get authorised and bring innovative products and services to market faster. Since it was introduced in 2016, 195 firms serving UK consumers have been accepted into the FCA’s regulatory sandbox.
The FCA's pre-application support service, which provides extra support for firms seeking regulatory approval, is also now extended to all wholesale, payments, and cryptoasset firms. This will encourage firms in these sectors to set up in the UK to fuel growth, exports and job creation. In the last year, the FCA has supported 80 wholesale firms via pre-application meetings.
Making it easier for firms to innovate and grow
To spearhead growth, the FCA will enable a new innovative market for private companies to improve their ability to grow and scale up. The Private Intermittent Securities and Capital Exchange System, also known as PISCES, will offer investors greater access to investment opportunities in private companies.
The FCA's AI Lab will also work with firms to deepen understanding and support the use of AI solutions to drive growth and competitiveness in financial markets.
In addition, the regulator will let more firms know it is 'minded to approve' applications for authorisation when it thinks they can meet required standards. This will allow firms to seek investment with confidence that they can secure regulated status.
Buy Now Pay Later (BNPL) products will also be brought under the FCA's regulatory regime. This will help ensure that those who find BNPL helpful can still benefit from it and consumers are appropriately protected.
As part of fighting financial crime, the FCA will build a new data-led detection capability to increase identification of financial crime and take action to tackle it.
Adviser fees to rise
The FCA has also published the consultation on its fees and levies for the year ahead. It is proposing to increase minimum and flat rate fees, as well as application fees, by 2.5% in line with the increase in ongoing regulatory activities.
This includes £3.7m for its work on the advice guidance boundary review as well as costs relating to the introduction of pension dashboards, bringing ESG rating providers into the FCA's regulatory perimeter, and its work into historic motor finance complaints.
Nikhil Rathi, chief executive of the FCA, said: "We're committed to being a smarter regulator - one that supports growth, helps consumers and fights crime. Our annual work programme details what we will deliver to achieve these goals. And today, we’re setting out how we’ll go further to help firms that want to join our markets with greater support for the application process and to test innovative products."
