Regulator aims to provide transparency on its thought process and decision-making.
The Financial Conduct Authority (FCA) has published its Approach to Supervision and its Approach to Enforcement documents in a move it said was designed to provide transparency on its thought process and decision-making.
Mission
The releases follow the consultation into its Mission, which was launched in October 2016.
The regulator then published its Mission in April 2017, when it also revealed a 1.5% budget increase for 2017/18.
The FCA detailed that its Approach to Supervision explains how it aims to be more forward-looking and pre-emptive in its supervision of firms.
It noted that firms’ “strategies and cultures are at the root cause of most major failings” and that engagement supervision will focus on business models and behaviour.
Harm
According to the FCA, supervision will also prioritise its activities according to the greatest risk of harm.
Meanwhile, the Approach to Enforcement document outlines how the FCA conducts investigations and its powers.
The watchdog detailed that the paper covers how enforcement sets out to achieve fair and just outcomes in response to misconduct and how it ensures rules and requirements are obeyed.
Visible
Andrew Bailey, FCA chief executive, said that supervision and enforcement were the “most visible parts of the FCA’s work”, adding they were critical to helping the organisation fulfil its objectives.
“For supervision this means overseeing regulated firms to identify, prevent or reduce harm to consumers and markets,” he stated.
“And for enforcement our overriding principle is to provide substantive justice, aiming to achieve fair and just outcomes in response to misconduct and to ensure our rules and requirements are followed.”
Bailey continued: “We hope today’s Approach documents outline clearly and in a transparent way, exactly how we fulfil our objectives through supervision and enforcement activity and why we make the decisions in the manner that we do.
“We are committed to continually improving our models and driving progress.”
Consultation
The documents are open for consultation until 21 June 2018 and the FCA confirmed that the final approach documents will be published later this year.
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