The FCA is keeping a close eye on an ‘uptick’ in overseas firms trying to establish an operation in the UK but keeping senior staff overseas.
Sarah Pritchard, FCA executive director, markets and executive director, International told the TheCityUK International Conference 2024 that there had been an increase in applications from overseas firms.
The FCA welcomed competition and new entrants but also needed to maintain regulatory vigilance, she said, and was keeping a close eye on developments.
She said the FCA wanted to see an open UK market but safeguards were needed.
Ms Pritchard, speaking yesterday, said the regulator expected overseas senior managers to spend “appropriate” time in the UK.
She said: “We have noticed an uptick in proposals where for a firm’s activity taking place on UK soil, the individuals undertaking senior management functions will not be based in the UK. If firms run or manage their UK operations from elsewhere, our ability to supervise them is lessened. As is our ability to hold parties to account should things go wrong.
“Over time this could impact the UK’s attractiveness as a global financial services centre. It is for this reason that we expect senior managers to spend time in the UK appropriate with their responsibilities here.”
She did not give specifics on the type firms applying to work in the UK.
She explained that while the FCA was vigilant it was also “working to ensure that the door is open to those who want to operate in our markets and are able to meet the standards we expect.”
The FCA will be supporting the recently-signed Berne Financial Services Agreement which paves the way for greater financial services co-operation between the UK and Switzerland.
She added that the UK was very much open for foreign firms and pointed out that the FCA had launched its pre-application support service (PASS) – targeted at overseas wholesale firms wishing to expand into the UK. The watchdog is offering firms pre-application meetings with case officers.
She said: “I would encourage any firm looking to expand into the UK or out of London and the south-east to come and talk to us – we can get you to market more quickly.”
Ms Pritchard said the FCA was also working hard to ensure it improved its response to new applications and one significant element was the FCA’s own operational performance.
She said following, “entirely justified criticism” of the length of time it was taking some to become authorised or approved, the FCA made improvements. It started to share in greater detail its own performance metrics on a quarterly basis. She said today, 97% of authorisation cases are assessed within statutory deadlines.
She added: “Better applications take the least time. Senior Managers and Certification Regime (SMCR) applications take on average 40 days, 50 days ahead of deadlines. Central to achieving that was not just more resource, though there was. Or more investment in tech and training, though there was that too. But greater commerciality – and a relentless focus on balancing all of our statutory objectives.”
