FCA publishes updated Perimeter Report

On 5 April, FCA published an update to its Perimeter Report. This report addresses areas of FCA concern on activities that fall outside the regulator’s remit, or where the complexity of the perimeter itself can lead to risks (i.e. from genuine uncertainty or concern that 'bad actors' deliberately abuse these grey areas).

The update doesn't introduce much that is new. It continues to address issues identified previously, in some detail, from buy now pay later to investment consultants. But the exhaustive list is perhaps a message in and of itself.

The FCA is one regulator, already overburdened with work. Expecting it to proactively address all these highlighted areas, particularly where it has no direct powers to intervene, would appear foolhardy at best.

This is perhaps something for Treasury to consider, particularly where the FCA has been a useful scapegoat in the past (e.g. mini bonds, which the FCA has accepted it failed on, but cannot be responsible for the fact such investments were largely outside it's remit).

Still, certain updated comments represent a more “punchy” approach to Treasury actions (or lack of them), and presents a more critical view. A line in the sand has apparently been drawn, whereas previously the FCA refused to comment more publicly on it's thoughts. For instance, these comments caught our eye:

FPO (financial promotion) exemptions
Referencing the recent changes to HNW/Sophisticated investor thresholds (reverting to lower thresholds), FCA say “We supported the increase in financial thresholds to ensure investors exposed to promotions for investments which are generally higher risk are better able to withstand losses. Due to these concerns, we do not agree with the Government’s reversal of these reforms.”

This appears to be a very strong rebuttal of changes announced in the recent budget by the Chancellor.

Appointed Representatives (ARs)
With reference to the (long overdue) follow up to the Treasury’s work and its Call for Evidence (which closed in March 2022): “We will continue this important work with the Treasury…and would welcome progress on next steps.”

It will be interesting to see if we see more like this...