As a compliance professional at a UK financial firm, you have the challenge of keeping up with the emerging trends in financial regulatory compliance. An increasingly challenging task as the FCA, among other regulatory bodies, increase requirements on firms. But, with the right perspective and guidance, these changes can be opportunities for your firm to adapt and enhance its compliance program, fostering a culture of compliance which, in the end, benefits consumers and the market at large.
Let us be your guide. These are key regulatory compliance trends that your compliance team should know and what your firm can do to stay ahead of the curve.
Top three emerging trends in financial regulatory compliance
2022 and 2023 have presented a number of developments that may affect your firm in the future. Some of these emerging trends are:
The Consumer Duty.
Announced in July 2022, the FCA’s Consumer Duty sets higher standards for financial services providers in the UK. Financial firms are expected to implement the Consumer Duty by July 31, 2023, for current or new products and services and July 31, 2024, for closed products and firms.
To do so, the FCA encourages firms to carefully consider the substantive requirements, prioritizing implementation and collaboration with other firms, as many need to share information with each other to implement the Duty on time.
Environmental, social and governance (ESG).
The FCA has shared that ESG-related issues will be a priority this year and into the next. Much of this is due to the FCA’s interest in maintaining trust and transparency and ensuring accurate market pricing, protecting consumers from misleading marketing and promoting active investor stewardship.
To stay ahead of the curve, your firm’s compliance team should stay abreast of the evolving regulatory landscape around ESG and embrace the necessary tools and guardrails to help your firm deliver sustainable investments.
Cryptocurrency regulations.
While the FCA oversees anti-money laundering (AML) procedures for cryptoasset firms, most cryptoassets themselves remain unregulated. In fact, security tokens are the only regulated cryptoassets.
However, due to the rise in cryptoassets, and considering how unregulated they currently are, regulators such as the FCA and UK Advertising Standards Agency (ASA) have become involved in cryptoasset oversight to ensure that consumers are not misled or misinformed about cryptoassets.
In the meantime, firms that are registered with the FCA are expected to follow an acceptable level of AML regulation and conduct appropriate customer due diligence and checks before onboarding clients.
At COMPLY, we recognize the mounting challenges UK-based compliance professionals face, thus we created the UK CCO Playbook. This comprehensive guide helps compliance professionals like you navigate the intricate UK financial regulatory landscape. This playbook addresses emerging trends and impending changes and outlines what it takes to create an effective compliance program that’s adaptable to evolving requirements.
Need further guidance on how to navigate the regulatory compliance landscape in 2023? Download the UK COMPLY CCO Playbook now.