We have invested significantly in implementing the Treasury’s Future Regulatory Framework, now referred to as its Smarter Regulatory Framework (SRF). This work supports all our top-line outcomes and focuses on creating confidence in financial markets.
When the legislative changes are fully implemented, we will measure our success by how effectively and efficiently we replace assimilated law with our rules, and how effectively we respond to any change in our remit, accountability arrangements or wider obligations.
All top-line outcomes but particularly Confidence
Outcome 1: The commitment supports all our top-line outcomes and creates confidence in financial markets
| Metric code | Metric description | Source | Baseline Value | Year 1 values | Year 2 values |
Latest status (year 2 value compared to baseline) |
|---|---|---|---|---|---|---|
|
PFS1-M01 This metric uses the same data as the top-line metrics CCO1-M01 and CNF5-M01 |
In the longer term, when any legislative changes are fully implemented, increase in the proportion of consumers who slightly or strongly agree that they have confidence in the UK financial services industry. | FCA Financial Lives Survey (FLS) | 41% of consumers (2020) | 41% of consumers (2022) |
43% of consumers (2023 re-contact survey)
Difference between year 2 and baseline value is statistically significant.
|
Improved |
| PFS1-M02 | Increase in firm’s perceived effectiveness of the FCA in regulating financial services. | FCA and Practitioner Panel survey | scores on a 10-point scale; 7.1 all firms [7.2 (fixed firms) and 7.1 (flexible firms)] (2021) |
scores on a 10-point scale; 6.9 all firms [6.7 (fixed firms) and 6.9 (flexible firms)] (2022/23)
|
scores on a 10-point scale; 7.2 all firms [7.2 (fixed firms) and 7.2 (flexible firms)] (2023/24) Difference between year 2 and baseline value is statistically significant.
|
Improved |
| PFS4-M01 | Firms feel the FCA can adapt regulatory requirements to respond to innovation and new challenges | FCA and Practitioner Panel survey |
(2022/23) |
Difference between year 2 and baseline value is statistically significant. (2023/24) |
Improved |
Outcome 2: Ensuring orderly replacement of firm-facing requirements in legislation in our Handbook
| Metric code | Metric description | Source | Baseline Value | Year 1 values | Year 2 values |
Latest status
(year 2 value compared to baseline)
|
|---|---|---|---|---|---|---|
| We will continue to assess and monitor the regulatory pipeline through the Regulatory Initiatives Forum and Grid, to understand the impact of the transfer on firms. | FCA repeal and replacement of assimilated law webpage, HMT Smarter Regulatory Framework publications, Regulatory Initiatives Grid | We are responsible for around –40 pieces of assimilated law. | Tranche 1 and Tranche 2 (11 files) started and remain in progress (2022/23, and 2023/24) | Tranche 3 (5 files) to start in 2024/25 | On track |
What the latest metric values tell us
The programme of work to repeal and replace assimilated law is significant and long-term. This means that, while we have started the process and are already working on 11 files in Tranches 1 and 2, much of this work has yet to take effect. In the longer term, we expect work on this commitment to have a positive impact on consumers’ and firms’ perceptions.
In February 2024, we published details of our current approach to analysing the costs and benefits of our policies, and will consult the new Cost Benefit Analysis (CBA) panel once it is established. We also finalised our Rule Review Framework in January 2024. Both the framework and the CBA panel will help us collaborate with stakeholders to ensure our Handbook remains aligned with our objectives. This should lead to greater confidence from consumers and firms in the UK financial services industry and in our ability to adapt regulatory requirements in response to innovation and new challenges.
The proportion of consumers who slightly or strongly agree that they have confidence in the UK financial services industry (PFS1-M01) increased between 2020-2023. Similarly, the mean score of firms’ perception of the FCA effectiveness in regulating financial services (PFS1-M02) moved from 6.9 to 7.2 on a 10-point scale. These metrics are affected by many other factors and will take time to reflect the impact of our work (for example, the impacts of changes we may make as we replace assimilated law with our rules).
Finally, the percentage of firms agreeing or strongly agreeing that FCA can adapt regulatory requirements to respond to innovation and new challenges (PFS4-M01) increased from 34% to 40%.
Both consumer and firm sentiment may have been influenced by the challenging macro-economic and wider market environment. While some of these factors will remain beyond our control, our work on this commitment aims to use our powers under the Financial Services and Markets Act 2023 to adapt regulation appropriately to support UK consumer, firm and market needs.