Sheldon Mills: FCA does not have ‘one-size-fits-all approach to regulation’

Biba 2022: Sheldon Mills, the FCA’s executive director of consumers and competition, has emphasised that the financial services regulator does not have “a one-size-fits-all approach to regulation”. Instead, the FCA focuses on “prioritisation” to ensure it has “a proportionate regime”.

Presenting the closing keynote during the first day of Biba’s 2022 conference in Manchester this week (11 May 2022), Mills addressed common criticism directed at the FCA “around proportionality and how quick are we in terms of the services we provide to the sector, such as authorisations and changes in permission”.

He told attending brokers: “I think some of you think that we have a one-size-fits-all approach to regulation, but it won’t surprise you to hear that one of the challenges for me and my colleagues in the ex co is prioritisation and ensuring balance of our 4,500 people over the 55,000 plus firms that we regulate – and that’s without appointed representatives (ARs).

“What that means is that we already have a proportionate regime. We spend less [time] on smaller firms and spend more of our time on larger firms.”

Mills added that the regulator’s Senior Managers and Certification Regime (SMCR), which became effective for insurance brokers from December 2019, also works to ease time and staffing pressures at the FCA because it “is a way of empowering you, the regulatees, to look after your own regulatory obligations”.

“If that works well, there’s less need for enforcement,” he explained.

“However, what that does mean is that we need to get better at our authorisations. We need to get quicker and we need to get smarter.

“We are recruiting more people and we are thinking about smarter ways to ensure faster processes.”

Accountability

The SMCR, which replaced the Approved Persons Regime, aims to deter misconduct by improving senior leaders’ individual accountability and awareness of conduct issues across their firms.

The FCA itself will also be adhering to the SMCR requirements, Mills said, because there “is a need for us to be accountable for our activities”.

He told brokers that he has sat down with consultants to better understand his own commitments under the regime.

He continued: “It’s important that we are accountable, publicly, for what we do.”