The Financial Conduct Authority is set to toughen up its regulatory requirements for new entrants to UK markets.
The watchdog plans to add 100 employees to its authorisations team, which is tasked with assessing new financial services businesses suitability to operate in the UK.
“The UK is open for business, but not to firms who do not meet, or wish to meet, regulatory expectations. There will be a greater focus on scrutinising applicants’ financials and business models,” Nikhil Rathi, the FCA’s new chief executive officer, said on 15 July.
Rathi, who was speaking as the regulator launched its first outline of its regulatory priorities under his tenure, said: “If you let a bad firm or individual into the system, it takes up the time of supervisors and enforcers, and it risks the savings, livelihoods and health of consumers.”
“Just one decision at the start — not letting them in — could prevent all that,” he continued.
He added that the tougher entry requirements will “apply especially in complex markets, or where the firm is operating in a high-risk business, such as crypto firms applying for anti-money laundering registration”.
It is the latest in a series of moves by the watchdog to establish how it plans to adapt its approach to regulating the UK since the country’s split from the European trading bloc.
Brexit, and the freedom it presented UK policymakers to diverge its rulebook away from EU standards for the first time in 40 years, sparked debate as to whether or not the country would seek to ease its regulatory standards.
But the FCA poured cold water on the prospect of a race to the bottom for standards, outlining its goal to make sure UK rules “remain at least equivalent” to those in effect within the EU.
The watchdog also said it would also spend £11m on a digital marketing campaign to warn investors over the risks of putting their money into cryptocurrency.
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