Nikhil Rathi, CEO of the Financial Conduct Authority (FCA), has provided an insight into the future regulation of the UK financial services sector.
In a speech, delivered today, Mr Rathi noted that although the UK is open for business, it is not open to firms that do not meet the FCA’s regulatory expectations. All firms can expect to be held to the same high standards.
There are 1,450 EEA firms currently accessing UK markets via the Temporary Permissions Regime (TPR). As the FCA moves to a more permanent arrangement, there will be a rigorous review of all firms seeking to enter the UK authorisation gateway, Mr Rathi said.
Firms that have the potential to grow quickly and may pose a greater risk of harm have been told to apply for authorisation sooner. Since the end of the transition period, the FCA has taken action against 13 firms, restricting their business, and it is taking steps to remove a further 120 firms from its regulatory perimeter.
“An example of how we are tackling financial crime at the gateway is through our registration of cryptoasset firms. A significant number are not meeting the required standards under money laundering regulations,” the CEO of the FCA says.
The FCA has identified 111 firms operating without registration. The regulator says it will take further action where appropriate.
“Our robust approach continues in our supervision of firms. If, once we do authorise a firm, we see they are not using their authorisation or indeed misusing it, we are not afraid to act quickly to remove their permissions. They will have to ‘use it or lose it,” Mr Rathi said.
He noted that the FCA recognises that fintech firms often need greater regulatory engagement in their early years and the FCA has led regulatory innovations over a number of years and will continue to do so.
