Financial Conduct Authority futureDiscussing the regulatory changes that SMEs and entrepreneurs in the financial services sector need to be aware of, Laura Harvard, legal director at law firm Shakespeare Martineau, told Real Business the alternations will be about introducing much higher levels of accountability at all levels and the overall regulatory framework that impacts their business operations. ?The FCA is planning to do more to tackle money laundering. As well as promising to use its teeth to prosecute the worst offenders, the regulator is going to review the way money-laundering supervision is managed by professional bodies such as the Institute of Chartered Accountants and the Solicitors Regulation Authority (SRA),? she also explained. ?The FCA has also promised to take a closer look at how firms are lending to consumers, taking into consideration suitability and affordability assessments to ensure good customer outcomes are maintained; and prevent potential mis-selling.? Paresh Davdra, CEO and co-founder of RationalFX & Xendpay, believes the FCA has been an ?imperative support? for SMEs. ?Through introduction of new regulations across the entire financial industry since 2013, it has helped to safeguard the interests of entrepreneurs and businesses through its vision of financial stability. It has allowed many businesses to expand into Europe with a license that acts as a passport for UK businesses, enabling them to serve customers in new markets.? Continuing with the subject of supporting SMEs, Adam Tavener, chairman of Alternative Business Funding (ABF) and Clifton Asset Management, said there is no specific requirement for the FCA to promote the interests of entrepreneurs or protect SMEs in any different way to other ordinary retail investors. ?The responsibility of the regulator is to ensure stable and orderly financial markets and to protect unsophisticated investors from unscrupulous practice. That said, in delivering its brief the FCA will have an impact on small business, albeit often indirect. In banking, for instance, a regime which requires higher solvency margins and encourages a claims culture makes major lenders far less likely to have an appetite for SME lending. Similarly, an ever-increasing PI and redress burden on intermediaries means cost increases passed directly on to business owner customers.? Ultimately, Tavener believes, entrepreneurs, particularly, are often dependent on innovative financial products to help them achieve their aims, yet such innovation is often stifled by a ?sceptical regulator?. The future of the Financial Conduct?Authority is no less certain than at any other point in its chequered 30-year history. The introduction of new measures and polices in the coming years, under the guardianship of a new chairman, will go a long way towards determine the future role our financial regulator has to play. Find out how companies should respond to increasing aggression shown by the FCA and SFO.
Share this story