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Business Plan 2022/23 | FCA – FCA

Contact us by web chat, email, phone or post:
Financial Conduct Authority
12 Endeavour Square
London E20 1JN
 
Contact us by web chat, email, phone or post:
Financial Conduct Authority
12 Endeavour Square
London E20 1JN
 
Contact us by web chat, email, phone or post:
Financial Conduct Authority
12 Endeavour Square
London E20 1JN
 
Contact us by web chat, email, phone or post:
Financial Conduct Authority
12 Endeavour Square
London E20 1JN
 
 
 
 
 
 
 
 
 
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Receive the latest FCA news and publications in a daily email. 
Receive the latest FCA news and publications in a daily email. 
Our Business Plan details the work we’ll do over the next 12 months to help deliver the commitments in our Strategy and how we will measure progress.
 
In Our Strategy 2022 to 2025, we set out our vision and ambitions for the next three years. We also set out the consistent topline outcomes we expect from financial services and the key strategic areas we’ll be focusing on.
Our Business Plan explains our programme of work for this year to achieve this three-year strategy. It outlines the key work we will do over the next 12 months to deliver these outcomes, how we will measure progress and also provides examples of our work. 
We are publishing this Business Plan when the external environment is changing rapidly. The longer-term impact of Covid continues to be uncertain. Low levels of financial resilience and rising costs mean many people are at risk of serious financial problems. And this is happening against a backdrop of rising inflation and interest rates and major geopolitical uncertainty. The impact of these factors will be felt by consumers and firms over the coming year and beyond.  
We will continue to monitor emerging issues and adapt our plans where necessary. During the pandemic, we proved we could think and do things differently and at speed, and two years on, we’re much better prepared to do it again. By focusing more on end outcomes, and working across sectors and markets, we are better able to respond to new issues and macroeconomic challenges. Our new, more adaptive approach to allocating resources and monitoring our performance will make us more agile and help us respond more quickly to market needs.  
We are not tackling these issues alone. We work with a range of partners to deliver our objectives. This wide-ranging cooperation includes global regulators and bodies, and domestic partners.
Our Business Plan details the work we’ll do over the next 12 months to help deliver the commitments in our Strategy and how we will measure progress.
 
In Our Strategy 2022 to 2025, we set out our vision and ambitions for the next three years. We also set out the consistent topline outcomes we expect from financial services and the key strategic areas we’ll be focusing on.
Our Business Plan explains our programme of work for this year to achieve this three-year strategy. It outlines the key work we will do over the next 12 months to deliver these outcomes, how we will measure progress and also provides examples of our work. 
We are publishing this Business Plan when the external environment is changing rapidly. The longer-term impact of Covid continues to be uncertain. Low levels of financial resilience and rising costs mean many people are at risk of serious financial problems. And this is happening against a backdrop of rising inflation and interest rates and major geopolitical uncertainty. The impact of these factors will be felt by consumers and firms over the coming year and beyond.  
We will continue to monitor emerging issues and adapt our plans where necessary. During the pandemic, we proved we could think and do things differently and at speed, and two years on, we’re much better prepared to do it again. By focusing more on end outcomes, and working across sectors and markets, we are better able to respond to new issues and macroeconomic challenges. Our new, more adaptive approach to allocating resources and monitoring our performance will make us more agile and help us respond more quickly to market needs.  
We are not tackling these issues alone. We work with a range of partners to deliver our objectives. This wide-ranging cooperation includes global regulators and bodies, and domestic partners.
We are the conduct regulator for around 51,000 firms and we prudentially supervise around 49,000 firms.
In previous years, we structured our activities around the sectors we regulate. We are also doing things differently this year to align with the Strategy and the four consistent overarching consumer and wholesale market outcomes we expect financial services to deliver. This Business Plan details the work we will carry out this year under each of the 13 commitments from the Strategy where we will focus our work.  
We have grouped our commitments into three areas:
The work we do under these areas of focus will help create the conditions for financial services to deliver our expected outcomes. Collectively, we aim to improve firms’ conduct and understanding of our expectations so that financial markets work well and are able to deliver good outcomes for consumers, market participants and the economy.  
We need to use our resources efficiently and effectively to deliver across our commitments. We have weighed up the different outcomes we want to achieve and the issues we need to tackle by looking at factors including the likely scale, severity and probability of harm occurring, likely future harm given external events, our ability to address issues and our judgement about urgency.
​Most of our activity fits within these commitments. Some of our work will deliver against more than one commitment and we highlight examples of these throughout (eg our work on consumer investments and cryptoassets).
Our activities for the next year will focus on the following commitments, under our three areas of focus, and each has clear outcomes:
Reducing and preventing serious harm
Setting and testing higher standards
Promoting competition and positive change
In our 2020/21 Business Plan, we highlighted four priorities for our consumer-facing work: 
The shape and scope of some of these priorities have changed but they remain fundamentally important to us and we continue to reflect them in the commitments this year:  
The Regulatory Initiatives Grid from the Financial Services Regulatory Initiatives Forum gives details of our planned regulatory programme. The forum aims to strengthen coordination between members. It helps the financial services industry and other stakeholders to understand, and plan for, the initiatives that may have a significant operational impact on them. The Grid is updated twice a year. 
We are joining up our tools, so we act efficiently, effectively and consistently. We will measure both our and industry’s performance against these outcomes, learning and acting quickly and with greater agility.  
To do this, we are framing our activities by the outcomes they achieve rather than the processes we follow. We have streamlined our work to consist of the following six core regulatory activities that capture ‘start-to-finish’ regulation of financial services markets. We have used these regulatory activities to frame this Business Plan:  
In the 2021/22 Business Plan, we committed to report publicly, beginning in April 2022, on our consistent topline outcomes and the metrics we will use to measure our progress over time.
We also committed to report against the strategic outcomes and metrics that we would set over a multi-year period. This Business Plan gives details of some of our proposed metrics to measure progress against our commitments for 2022/23. In our commitments section we provide the full list of outcome measures and proposed metrics for each commitment.
Financial services outcomes can be significantly affected by external factors, including the economy, changes in technology, wider innovation and consumer behaviour. Progress will not be immediate and will not be steady from year to year. Nevertheless, we challenge ourselves to improve outcomes in the medium term, although we recognise we cannot control all the factors which determine those outcomes.
We also recognise that no metric is a perfect measure of the outcome and all metrics have some limitations. We explain on our metrics page some key points when interpreting the metrics and where we are still developing our approach. We plan to continuously improve and develop these metrics and add new ones as they become available. We will continue to engage with stakeholders and partners so we can do so. We welcome views on ways to improve the metrics we have proposed under each outcome.
The markets we oversee are changing rapidly and we are transforming how we operate to respond to this and prepare for future challenges. Our ongoing investment in our people, technology and capabilities, along with evolving our culture, will enable us to deliver our commitments.
Our Strategy outlines the changes we have already made and those we will make over the next three years. This section highlights some of our specific work to become more innovative, assertive and adaptive, and to help us achieve our commitments.
To be innovative and adaptive, we need to stay up to date with global changes – particularly those driven by technology, innovation, and climate change – and reflect them in our regulation.
As our transformation programme continues, a key area of investment is in our capabilities to become a data-led regulator.
Our Data Strategy will be published in the coming months. It aims to make us more effective by harnessing data, converting it into actionable intelligence and improving our real time  understanding of what’s currently happening and, crucially, of emerging risks.
We have built analytical tools to provide key indicators about firms to help identify risks – such as phoenixing – right at the Gateway, which we can then address via frontline teams or through automated interventions. Our new cloud-based data infrastructure allows us to work with data at scale and speed. We can engineer, connect, and blend data to create new insights to help us monitor how markets and firms are functioning in line with our market integrity objective. We have explored the use of synthetic data sets to test financial crime controls. We are undertaking more work to make this available more widely and will continue to work with industry and academia.
We’re actively exploring how we can use advanced analytical techniques, such as machine learning and AI, for our own supervisory and enforcement. Together with the Bank of England, we recently published the final report of the AI Public-Private Forum (AIPPF) to better understand how AI is changing UK financial markets. Building on this, we will publish a Discussion Paper on AI later this year.  We are also exploring the concepts of ethics and bias in algorithms and AI to ensure that all technologies – including AI – are used in a responsible way that avoids causing harm to consumers.
Our investment in technology will continue, including developing a Digital Unified Intelligence Environment to connect the vast array of data and intelligence we hold across our systems. This will deliver key actionable insights to our teams to decisively spot and stop harm, delivering the right data, at the right place, at the right time.
Our people are central to us becoming a data-led regulator. We are building an organisation that can deliver our more innovative, assertive and adaptive approach, so that every aspect of the FCA is designed to help us do our job efficiently, effectively and consistently.
We are developing our people’s skills and investing in core systems. This combination of powerful information, digital tools and data skills will enable us to do our jobs as part of a genuinely digital organisation – a key step in achieving the ambition of becoming a data-led regulator. 
In November 2021, we set out changes to our Enforcement Guide (EG) and Decisions Procedure and Penalties Manual (DEPP) to streamline our decision-making and governance to enable us to be more effective and efficient in stopping harm to consumers and markets.  Following consultation, we moved some decision-making on statutory notices from our Regulatory Decisions Committee (RDC) to Executive Procedures so that the RDC focuses on contentious enforcement cases.  
Decisions under Executive Procedures focus on areas where we need to prevent or stop harm to consumers or the market occurring or increasing, by preventing firms from offering financial services in the first place or intervening to restrict the financial services offered to consumers. We also made some modifications to our existing Executive Procedures framework.  These changes to our decision-making and Executive Procedures help us promote our statutory objectives and enable us to act more decisively and swiftly where the greatest levels of harm exist. 
We have a role in improving diversity and inclusion in the firms and markets we regulate so they better reflect those they serve. So we should be as diverse and inclusive as possible ourselves, reflecting the communities in which we work and the consumers we protect.
We are making significant progress towards our diversity targets. By 2025, we aim to have 50% of our Senior Leadership Team (SLT) identifying as female. At the end of January 2022, 47% of our SLT identify as female, up from 43% in March 2021. We also aim to have 20% of our SLT identifying as minority ethnic by 2025. At end of January 2022 15% of our SLT identify as minority ethnic, up from 13% in March 2021. We recognise that trends may fluctuate monthly and this is a sign of progress. Our Annual Diversity Report sets out our progress against other areas of diversity too. 
We are a regulator for the whole of the UK. We are building on our ongoing strong commitment to London and Edinburgh, with our national location strategy. 
The next chapters provide details on our activities to deliver against our commitments this year. We also provide details of our planned work, together with the outcomes and some example metrics for each initiative that we will use to measure progress and performance (full details of these metrics are on our outcomes and metrics page). 
We have made six commitments for tackling conduct that can cause serious harm.
While only a very small minority of authorised firms cause life-changing harm, it can and does happen very quickly. This section explains the actions we are taking to deliver across our six commitments for reducing misconduct that can cause serious harm. 
Firms who don’t meet our minimum standards put consumers and markets at risk. We will act faster against firms causing harm to consumers and/or markets. We will challenge ourselves to find the limits of our powers to remove firms from the market. 
(Our Threshold Conditions are the minimum conditions which a firm is required to satisfy, and continue to satisfy, to be given and retain permissions.) We anticipate this metric to rise over the next three years, followed by a decline as relevant firms adjust their conduct to fit with our expectations. We recognise that a long-term aim to increase cancellations and withdrawals of permissions is not what we want. So we will keep this metric under review as we assess our operational effectiveness in this area and to ensure there are no unintended consequences. 
This is an example of a new perception metric we will develop using a survey of firms. We intend to rework existing survey questions related to FCA action to cover the effectiveness of our use of the Threshold Conditions and other intervention powers. 
We have a duty to protect consumers from harm. That includes making sure they can get redress when things have already gone wrong. Too many firms fail owing redress to consumers. We want to see more consumers get redress from the firm that owes them money. ​ 
We consider an increase in this metric a broad indicator of CMC services providing fair value. However, it should be noted that the outcome of consumers’ actual claims can influence their perception of the value CMCs provided and they received. 
We are also considering the feasibility of metrics in relation to complaint resolution that would better capture the fairness of complaint resolution, in addition to timeliness. 
As FSCS claims will always be ‘after the event’ these are lagging indicators. So it will take some time before the impact of our work begins to show. FSCS claims may also be driven by wider economic conditions. 
We recognise the limitations of this metric in capturing consumer understanding of the redress system as well as awareness. This is complex and we may explore how to develop this further. 
Failing firms can cause widespread harm. Consumers can lose money. Firms will always carry a risk of failing, so they need to plan for this from the outset. 
We aim to minimise the fallout from failing firms. Firms should be financially resilient and recover quickly from disruptions. 
A low and stable proportion of firms who do not meet their financial requirements indicates that firms are generally able to conduct business and wind down without causing significant harm. The metric does not perfectly capture progress towards the outcome because not all prudential regimes are harm based. So even where firms meet their financial resource requirements, they can cause harm. 
A low and stable proportion of firms with adverse CASS audits indicates that firms generally hold client assets and funds appropriately. An adverse report is one where the auditor has identified a problem (eg the firm not identifying client money).
Principal firms are responsible for ensuring their Appointed Representatives (ARs) comply with our rules. But many principals do not adequately oversee the activities of their ARs. Consumers are at risk of being mis-led and mis-sold, while misconduct by ARs in the financial sector can undermine market integrity. So we’re making changes to improve principals’ oversight of their ARs, increase the information they give us and raise standards across financial services. 
We know our activities will take some time to impact complaints data. We anticipate a reduction in complaints will lag behind the changes we are making. We may also see increases in the short term, where our work reveals misconduct that drives complaints. 
The AR Regime crosses the breadth of the financial services sector. So we’ll also use metrics related to other strategic outcomes where ARs are operating to measure the success of our work. 
Financial crime does incalculable damage to society. Reducing financial crime requires a collective effort – from us, regulated firms, the Government and our regulatory law enforcement partners, both in the UK and internationally.
Slow the growth in investment fraud victims and losses.
Slow the growth in Authorised Push Payment (APP) fraud cases and losses.
The Government is developing its economic crime plan, and fraud action plan, with its partners, including us. While counter-fraud work is already underway, in the short to medium-term fraud offences are likely to continue to rise. There are wide-ranging drivers of the different types of fraud and an array of parties who can affect its prevalence and impact on victims. The effect on outcomes depends on those partners working together and taking actions, as well as us. The incidence of fraud is also affected by levels of consumer awareness and consumer behaviour. So it is challenging to isolate and measure the impact of our interventions on fraud. 
This metric is under development and indicates the strength of our gateway to ensure high standards and minimise financial crime within the regulatory perimeter (the legal boundary between what we do and don’t regulate). Over time, as our work on money laundering and financial crime has wider effects, we expect the proportion of applications rejected, withdrawn or refused to stabilise as firms adjust their conduct to fit with our expectations. 
Market abuse undermines the integrity of the UK financial system, eroding confidence and reducing participation in our markets. Firms are a vital first line of defence. We want them to have strong prevention cultures and effective systems and controls. We work in primary markets to ensure firms and issuers have robust controls in relation to inside information and disclose it to the market in an accurate and timely way. 
In secondary markets, we actively monitor data and firm intelligence to spot insider dealing and market manipulation, and take action. Our work will strengthen firms’ resilience, improve our detection capability across the market and deliver assertive action both against current wrongdoing and to deter future abuse. 
We plan to develop a new perception metric using a survey of market participants. 
We are developing a broad measure of how our discussions and interventions with issuers promote better disclosures. This measure will be affected by our capacity to detect poor disclosures as well as overall market conditions. A decrease in the number of interventions may indicate that standards are improving, so this metric will need to be interpreted alongside indicators of market cleanliness. 
Our broad measure of market cleanliness is one indicator of possible insider dealing but this can be affected by other factors such as sample size or high volatility. 
British Steel Pension Scheme
On 31 March we published a consultation paper setting out our proposals for a consumer redress scheme. Under this, consumers who were given unsuitable advice to transfer out of the British Steel Pension Scheme (BSPS) can have the advice they received reviewed and receive redress where unsuitable advice caused loss. We found that a high proportion of that advice was unsuitable for those consumers and caused them financial loss.  
The proposed scheme will advance our objective to secure an appropriate degree of protection for consumers. To achieve that we will: 
Beyond our work on BSPS we are working on a number of past business reviews with firms who have provided poor advice to ensure consumers get access to redress. We expect most of this work to conclude this year.  
We receive data every six months from firms with a Defined Benefit pension transfer permission. We use this data as part of our ongoing supervision and will investigate where it raises concerns. Where we identify poor advice, we take action.  
We are also working closely with The Pensions Regulator to continue to improve the sharing of data between organisations as set out in the Joint Protocol. This work has included our recent joint statement on the Old BSPS.
High-cost credit
In recent years, the aggregate level of credit available to those who have limited or no access to mainstream credit and may be in vulnerable circumstances has reduced significantly, in markets such as home collected credit, guarantor loans and High-Cost Short-Term Credit. This situation is due to different factors, including firms’ past unaffordable lending.
We have been building a picture of the nature and scale of future supply of credit to borrowers outside the mainstream markets and getting a deeper understanding of the characteristics and needs of consumers who may no longer be able to access credit. We are considering how to support these consumers, as the cost of living increases, without reducing necessary protections and exposing them to further harm.
We know that a compliant, responsible commercial high-cost credit sector can only meet some of their needs. We are supporting Government and Fair4All Finance on initiatives like the No-interest Loans Scheme and are ready to play our part in collective efforts to explore how to support consumers.
Underpinning this is our ongoing strategy to drive improved compliance in the high-cost credit market so that firms serve consumers responsibly. A fair, responsible and sustainable market should not see credit being offered to consumers who cannot afford to repay it.  We want to see a culture shift, moving away from past poor conduct and taking responsibility for consumer outcomes. To support this, we are considering how we can help firms understand what outcomes we expect and how to apply our rules in practice.
We have committed to focusing on the impact firms’ actions have on consumers and markets. We expect firms to adopt the same mindset. This section explains the actions we are taking to set higher standards and assess how these deliver better outcomes.
Firms need to do more to make financial services work well for consumers. Our aim is to set clearer and higher expectations for the standard of care and customer service firms give consumers. We will also work with the Government and wider partners to support financial inclusion within financial services. We have included an outcome and metrics which reflect our current focus on access to cash. We will build on these in time as our work evolves.
We recognise that any reduction in complaints will lag behind the changes we make to improve outcomes for consumers, and it will take time to see the impacts of our work. We may also see increases in complaints in the short term as our measures increase consumer awareness of poor practice by firms.  
We use ‘completely unreasonable’ as it fits the questionnaire design; it doesn’t represent a threshold of for what we perceive as fair value.  
We recognise that any reduction in complaints will lag behind the changes that we make to improve outcomes for consumers and it will take time to see the impacts of our work. We may also see increases in complaints in the short term as our measures increase consumer awareness of poor practice by firms.  
Our metrics here reflect our current focus on maintaining access to cash.
1These metrics are subject to change as we finalise our new Consumer Duty policy. It will also take time for the data to reflect the change in policy.
Take quick and effective action
Digital services make it faster and easier than ever to engage in financial services or undertake any financial services activity. Consumers need good information to make good decisions. But this doesn’t always happen. Instead, they’re often targeted with adverts that are illegal, unclear, unfair and misleading.  
We’re getting faster at finding potential breaches and shutting down misleading promotions. Our focus with authorised firms is making sure they sell products and services that are suitable for the consumers that buy them, stopping firms doing unauthorised business and warning consumers about these firms. 
An increase of interventions over the next three years indicates that we are more effectively able to address promotions that are likely to lead to mis-selling and financial losses. We anticipate an increase over the next one to two years, followed by a flattening. 
A rise in the number of warnings issued over the next three years signals that we are more effectively able to address activity by unauthorised entities that potentially leads to mis-selling and financial losses. We anticipate an increase over the next one to two years, followed by a flattening. 
This metric indicates that our interventions are helping to ensure consumers invest in products better suited to their needs and circumstances.
Take quick and effective action
The financial sector has an important role to play in helping the transition to a net zero economy and a more sustainable long-term future. We also want to embed our environmental, social and governance (ESG) work across the FCA to support the financial sector in driving positive change in these areas. 
In November 2021, we set out our ESG strategy. This sets out our target outcomes and the actions we expect to take to deliver them. We are developing metrics to accompany these outcomes. 
Build on the regulatory framework by:  
To support this, we will be transparent in our approach to managing our own climate-related risks and opportunities. In 2022, we’ll publish a report covering the recommended disclosures of the Task Force on Climate-related Financial Disclosures (TCFD). 
Work with international regulators and the FinTech community to solve global problems through innovation. We will continue to work with stakeholders to: 
Help ensure consumers:
Take quick and effective action
Operational disruptions are inevitable. Firms must be operationally resilient – able to prevent, respond to, recover and learn from operational disruptions. Without this, consumers can lose access to essential services and confidence in financial services.  
We’ve introduced new rules and guidance to strengthen operational resilience and are scaling up our efforts to deal with those who can’t meet our new standards.  
To measure our success, we will develop a new metric based on the volume, scale, severity, and time to remediate operational disruptions. While developing this metric, we will monitor the overall number of operational incidents. 
Diversity and inclusion in the financial sector
In July 2021, we published a Discussion Paper Diversity and inclusion in the financial sector – working together to drive change jointly with the Bank of England and PRA. This explored how we can make financial services more diverse and inclusive.
Since then we have continued to engage with firms, other regulators and interested stakeholders. We have also gathered data from a sample of firms we regulate to understand their levels of diversity and the type of data they already collect. This will help us determine the best way to monitor future progress. Taking into account feedback on the discussion paper, we are working with the Bank and PRA to consult on more detailed proposals in Quarter 3 2022.
Lifetime mortgages
An increasing number of consumers are approaching retirement either owning their homes outright or with a mortgage. The lifetime mortgage market caters to those who want to use the value in their home to meet their later life needs. Given the significance of these decisions for consumers, we are considering the work we need to do to ensure that the market is working well. This could include following up on our earlier findings about poor quality advice and checking that standards among intermediaries giving advice have improved.
Funeral plans
Our strategy will focus on making sure that funeral plans offered to consumers meet their needs while offering fair value; and that firms have sufficient resources to ensure they deliver the funerals for which consumers have paid.
We aim to achieve these good outcomes for consumers through rigorous supervision of firms and the market, ensuring that firms continue to meet our high standards after we have authorised them. We will conduct an in-depth analysis of the newly authorised portfolio of these firms within the first year of regulation. We’ll identify and publicise key risks of harm that firms may pose, as well as our expectations of firms to manage those risks and minimise the risk of consumer harm.
Consumer investments
Our Consumer Investments Strategy aims to enable consumers to invest with confidence, understand the risks they are taking and the protections they can expect.
We continue to consider the most appropriate regulatory changes that will make it easier for firms to help consumers who want to invest in in simple, diversified and good value products, especially ISA wrappers that contain mainstream investments. 
We will introduce a regime that strengthens requirements on firms marketing high-risk investments to consumers. This builds on previous work to address harm in the market such as banning the mass-marketing of speculative mini-bonds.
Our work to improve firm resources and resilience includes reviewing our financial adviser prudential requirements.  This is linked to a wider package of measures to improve the redress framework and ensuring that consumers have access to redress when things have already gone wrong, which includes our consultation on a redress scheme for former members of the British Steel Pension Scheme. 
We have made three commitments to use competition as a force for better outcomes.
We will support growth and innovation in the UK through widely recognised and respected high standards. This section explains the actions we are taking to maintain our high standards to enable innovation and competition in consumers’ interests.
We now have the freedom to tailor our rules to better suit UK markets. If enacted as proposed by the Treasury, the Future Regulatory Framework (FRF) will change the statutory and regulatory framework we operate in.
The Treasury has proposed us having greater powers to set rules and regulate in a way that is properly adapted to the needs of UK firms, markets and consumers. We have an important role in implementing the new framework so that it is fit for the future. 
This metric, and others about the whole financial system and the FCA, are clearly affected by many other factors. So we will consider other ways of assessing the effectiveness of our work in this commitment. 
We seek a UK wholesale market which supports both the domestic economy and growth while maintaining high standards of consumer protection. This will be achieved if the UK continues to be one of the leading markets of choice for issuers, intermediaries and investors alike when compared to other high-quality markets.
Multiple factors will affect this outcome, including some outside our control. Our actions will encompass our roles both as the supervisor of regulated firms and markets and our role in the capital markets as the securities and listings regulator. We will take action to deliver a clear, well-understood proportionate regime which upholds high standards and supports innovation.  Where we are gatekeepers for users to access markets, we will improve processes to make them as efficient and robust as possible. 
The regulatory framework is clear, well-understood and trusted by all market participants.  
The framework supports market participants in determining fair value. 
Where outcomes are not being met, this is clearly communicated, and remediation is swiftly undertaken or enforced.  
This measures the overall financial activity across all sectors and considers qualitative factors related to overall economic performance. It ranks different jurisdictions based on these factors. Our contribution to this is important, but it is also affected by other factors.
These measure how quickly we approve new and changing regulated businesses, funds and capital market transactions. This can be skewed by high volumes and/or low quality of applications. 
The digitalisation of financial services is changing the way consumers make decisions and markets operate. To be an effective regulator, we must both respond to today’s challenges and prepare for those of tomorrow. We need to better understand the emerging risks and opportunities so that the huge benefits to consumers are captured and the important harms mitigated.
We will develop appropriate measures for this in different products and services. 
Support competition and innovation
Asset management and non-bank finance
The UK investment management sector manages £11 trillion of savings and pensions of millions of people across the UK and globally. The sector channels capital into investments that support economic activity.
We want firms to offer investors products that provide fair value and meet their investment needs. We want to ensure that our regulatory framework sets clear standards for a global industry, while retaining strong consumer protections.
Our supervision will focus on how asset managers ensure value for consumers. We will increase our supervisory focus on whether asset managers present the environmental, social and governance (ESG) properties of products in a way that is fair, clear and not misleading.
We will work with the Treasury and industry to identify opportunities for change from any transfer of responsibilities under the Future Regulatory Framework, and will work with our global counterparts on topics such as fund liquidity to achieve common standards. 
Crypto
At present, cryptoassets are only regulated in the UK for money laundering purposes, and we do not have conduct or consumer protection powers over the industry. We support innovation in financial services, including cryptoassets and their underlying technology, where they have applications that are in the public interest. For example, cryptoassets, and in particular a subset called stablecoins, could lower fees, speed up international transfers and automate payment transactions further.  At the same time, risks to consumers and the market must be appropriately mitigated. This may require further cryptoasset regulation as the industry evolves. 
We welcome the response of the Treasury to the 2021 consultation on cryptoasset regulation, confirming that stablecoins used as payment will be brought within the regulatory perimeter (ie under our regulation). So we will consider our regime for stablecoins used as payments and are planning to consult later this year.  
The Government’s response also confirmed that it will consult on wider regulation of the cryptoasset sector. We will also work closely with Government and other parties through the Cryptoassets Taskforce to design a UK approach to regulation that balances innovation and competition alongside the need for orderly markets and consumer protection.  
Cryptoassets are increasingly being adopted and incorporated into existing financial services. In March 2022 we published a statement reminding authorised firms of their existing obligations where they are interacting with or exposed to cryptoasset services. Firms remain responsible for assessing the risks to their business and consumers. We will continue to assess that firms are adequately taking account of cryptoasset risks and making it clear to consumers when they are interacting with unregulated services.  
Our annual budget reflects the cost of the resources we need to carry out our work in 2022/23. The key elements of our budget are:  
We give additional detail in our annual fees rates consultation paper (CP22/7).
Our AFR for 2022/23 is £640.1m, an increase of 4.3%. Our AFR includes our ORA budget, transformation, our Consumer Harm Campaign, and the costs we need to recover for changes to our regulated activities (scope change). The actual fees we collect will reflect the AFR net of rebates from financial penalties collected (£49.1m). 
The ORA budget comprises a flat in real terms base ORA budget increasing by 6.2% (£35.7m) to reflect the current inflationary environment, and additional charges to reflect changes to responsibilities (£3.0m), and the increased employer rate of National Insurance (£3.1m). This gives a rebased ORA budget of £617.4m, representing an overall 7.3% increase on last year.   
Our transformation programme is investing in systems and capabilities to enable better use of data and intelligence to regulate 51,000 firms effectively and efficiently. 2022/23 is the final year we will recover the costs of our transformation programme, with recoveries set at the same level as 2021/22. 
In 2020/21 we sought industry support to undertake a communications and information campaign to tackle areas where we see real risk of consumer harm, building on and supplementing our existing campaign, ScamSmart. We continue to recover the costs of our InvestSmart Campaign at the same level as 2021/22. 
In 2022/23 we will recover scope change costs for cryptoassets under the new Money Laundering Regulations, and Financial Promotions. 
The increase in our capital expenditure budget reflects the investment in property, plant and equipment relating to 12 Endeavour Square, to prepare for the sublet of 3 floors and improved audiovisual equipment to support the new hybrid working approach.  
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