Financial Services Regulatory Initiatives Forum publishes fifth edition of Grid

Background

The Forum’s members are the Bank of England (including the PRA), the FCA, the Payment Systems Regulator, the Competition and Markets Authority, the Financial Reporting Council, The Pensions Regulator and the Information Commissioner’s Office. HM Treasury attends as an observer member. The Forum was launched to strengthen coordination between members, and the Grid (first published in April 2020) sets out the regulatory pipeline so that the financial services industry and other stakeholders can understand – and plan for – the timing of the initiatives that may have a significant operational impact on them.

The Forum publishes the Grid twice a year, providing detail on the timing of initiatives over a 24-month horizon. The Grid also highlights key examples of closely interconnected initiatives to help stakeholders easily identify these.

Latest edition of the Grid – May 2022

As explained by Nikhil Rathi (Chief Executive Officer, FCA) and Sam Woods (Deputy Governor, Prudential Regulation, Bank of England, this fifth edition of the Grid is 'a story of consistency on the one hand and significant developments on the other'.

Significant developments

A key example: the Financial Services and Markets Bill

Unsurprisingly the Financial Services and Markets Bill, that was announced in the Queen’s Speech on 10 May, is highlighted as one of the significant developments on the regulatory horizon. The Bill will aim to:

• implement the outcomes of the Future Regulatory Framework Review, including adding new secondary objectives for the PRA and the FCA on growth and international competitiveness; and
• reform the rules that regulate the UK’s capital markets, protect access to cash, introduce new consumer protections and harness innovation.

Many of the topics covered by the Bill are established initiatives on the Grid, from access to cash to the Wholesale Markets Review. The Forum will keep coordinating closely on the measures and considering how these will interact and build on wider regulatory initiatives.

The 'known unknowns'

The Forum is also focusing on the ‘known unknowns’ in the current regulatory landscape and how these could impact consumers, industry, and regulators over the coming months, particularly the potential for initiatives in response to Russia’s invasion of Ukraine and pressures on the cost of living. Some of these initiatives and changes are already captured in the Grid, but further adjustments may be necessary, sometimes at short notice.

Consistency

Analysing impact, not just numbers

The total number of initiatives reflected in the Grid remains broadly the same, as it has across the last three editions, but the Forum members are also keen to focus on the impact of initiatives, rather than just the number. They are therefore currently developing their analysis of the initiatives in the Grid to be able to better assess their collective impact. This work should then provide further support for their business planning and decisions about when to start, delay, or stop work. They intend to include some of these insights in a future edition of the Grid.

Identifying cross-regulator themes

Approximately a third of the initiatives on the Grid are joint work across regulators. Many other initiatives are closely coordinated, for example the work on climate-related disclosures.

In compiling the Grid, the Forum members identify themes and areas where they want to ensure that work is joined up because coordination between members is an important aspect of managing the burden of regulatory initiatives, eg in terms of considering changes to the scope or timing of milestones and highlighting potential synergies. As part of this, the members have identified a range of themes in this edition including climate and sustainability, diversity and inclusion (D&I), innovation, wholesale financial markets, and work on cryptoassets and e-money.

Next steps

The Forum members are very aware of the impact that ‘known unknowns’ may have on industry and will continue to assess this and adapt their plans as appropriate. They will keep stakeholders updated on substantive changes via each regulator’s website as appropriate in advance of the next Grid publication in the Autumn.

The Forum continues to welcome feedback on the Grid, in particular ways in which it has been useful for stakeholders in their planning for regulatory initiatives and where the Forum can improve on this. As the Forum develops metrics to better assess the impact of initiatives, stakeholders’ views on the impact of initiatives at different stages of their life cycle are also welcomed, such as when a topic is being consulted on versus implemented.

Feedback can be sent to the Forum Secretariat at [email protected]. The Forum Secretariat may share any responses with Forum members.

Authored by Roger Tym and Virginia Montgomery.