CHANGE HAS COME TO THE REGULATORY DECISIONS COMMITTEE
In early August 2021, we wrote about Consultation Paper CP 21/25, in which the FCA proposed certain changes to the role and responsibilities of its Regulatory Decision Committee (RDC), particularly in relation to litigation and other contentious decision making. The FCA consulted on a package of reforms to its internal procedures, which it justified on the basis that they would improve its speed and efficiency. Whilst aspects of the FCA's position are, in our view, understandable given the political environment in which it operates, we noted a number of key criticisms that could be made of its proposals.
On 26 November 2021, the FCA published its Policy Statement PS 21/16, confirming in short that, despite a series of responses to the consultation raising concerns about the proposed changes (as detailed in the Policy Statement itself), "it has carefully considered whether to make any changes in light of the comments received in consultation, but we intend to implement our proposals as consulted" (para 1.18, p5).
The changes to the FCA's approach have already come into force (they did so on the same day the Policy Statement was published - 26 November 2021). While they are concerned substantially with the FCA's internal procedures, and some are technical, they are important for regulated firms and individuals.
We suggest that there are four key points to take away.
Firms and individuals need to be aware that these changes will in practice make it easier for the FCA to begin civil and criminal proceedings. The counterweight that the RDC may have provided in the past has been removed. That change is consistent with other senior level messaging from the FCA over the past year about an increasingly robust and assertive approach with more frequent recourse to litigation. These changes make it easier for the FCA to turn that messaging into action.
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