Seizing opportunity – challenges and priorities for the FCA

Speech by our CEO, Nikhil Rathi, delivered at the Lord Mayor's City Banquet at Mansion House.

Speaker: Nikhil Rathi, CEO
Event: Lord Mayor's City Banquet, Mansion House, London
Delivered: 22 September 2021
Note: this is the speech as drafted and may differ from the delivered version


  • We took extraordinary measures to protect consumers throughout the pandemic. With a stronger economic and employment backdrop, we are now coming through those challenges.
  • We are collaborating with international partners to deliver a world without LIBOR, transition to a net-zero economy and maintain high regulatory standards.
  • We’re investing to become as much a data regulator as a financial one, working with partners to realise a future where compliance checks can be completed in near real time.
  • We call on the financial services sector to partner with us to seize the opportunities presented by the profound forces transforming the sector and society.

I’m pleased to join Sam Woods, who during my first year as FCA CEO, has been a great partner and mentor. We have done many virtual events together. At one for the Association of Foreign Banks, all the questions were for the PRA but the problem was Sam was having connection difficulties and could hear the questions but nobody could hear his responses. So it was left to me to have a go. I had half an hour of great fun making up PRA policy on the hoof watching Sam steam up through the screen. I know in his speech shortly he is going to correct for the record everything I said that day.

Another thing I have learnt a year into my term as CEO of the FCA is that an email from our Press Team can either make or derail your day. The email I received two weeks ago featuring articles picturing our Chairman, Charles Randell, alongside Kim Kardashian, did both. At first I wondered whether he had got into a Twitter spat about the last season of ‘Keeping up with the Kardashians’, again.

Then I worried that while we were lucky Nicki Minaj was concentrating her fire on Professor Chris Whitty for now, at any moment we could hear from J. Lo on LIBOR, Britney on bitcoin or Justin Bieber on MiFID capital requirements.

In fact, Charles mentioned Kim Kardashian in a speech about cryptocurrencies as she had promoted to 250 million followers on Instagram a speculative digital token created a month previously by unknown developers. As you will all know, we have warned repeatedly investors in these products must be ready to lose all their money.

Exit from extraordinary measures

With a stronger economic and employment backdrop, we are now coming through those challenges.

This time last year, the FCA was dealing with the pandemic and the end of the Brexit transition period. With a stronger economic and employment backdrop, we are coming through those challenges.

During the pandemic, up to 5.8 million temporary payment deferrals were granted for credit cards, loans and mortgages. Through careful planning and collaboration with consumer groups and industry, these have been phased out without acute consumer distress, though we remain vigilant as the furlough scheme ends next week. 

In January, the Supreme Court decided our business interruption insurance case, providing important clarifications for an estimated 240,000 policyholders. Since then we have seen £1bn of insurance payments reach small businesses all over the UK and we appreciate the efforts of insurers involved.  

The turn of the year saw around 1,500 EEA-based firms enter our Temporary Permissions Regime and with significant preparation by firms working with us, we saw a smooth transition.

We are now able to look to future challenges as we transform the FCA. 

And as I set out in July, in the future we will be a regulator that:

  • tests our powers to their limits, to ensure market integrity, which is so key to sustaining competitiveness
  • continues to anchor to and shape international standards
  • over time will become as much a data regulator as a financial one 

Let me say a word about each.

Testing our powers to the limit 

We have often been criticised for acting slowly or with too much risk aversion. This is changing. We are applying a bolder risk appetite in dealing with serious misconduct, including, as you will have seen, using criminal powers in the most serious cases involving financial crime or money laundering.

We have often been criticised for acting slowly or with too much risk aversion. This is changing. 

We will litigate more if we need to, recognising we won’t win every aspect of every case but also appreciating that legal certainty can provide considerable benefits for industry as well.

We have a good dialogue with Government and will be publishing our third annual perimeter report next month, sharing our views on how the regulatory framework might evolve. This meets our commitment to Parliament, a key mechanism of our accountability which will only intensify in the coming years. 

International leadership 

As we consider far-reaching reform, international standards remain our anchor. We are changing listing rules to ensure investor protection but also support new sectors and new forms of capital raising – the first reforms came in August, more will follow later this year and next. This will help build on what has been a record year in capital raising in UK markets for UK and global companies of all sizes, particularly in the technology sector. 

Starting under Andrew Bailey’s leadership, we have cooperated with the Financial Stability Board, IOSCO and other international partners to ensure a global transition to a world without LIBOR:

  • we have worked with partners in the EU and US to align the outcomes of differing legislative approaches
  • supported an international SOFR-First initiative
  • and asked UK-regulated market participants considering using so-called 'credit sensitive rates' to talk to us first

We’re bringing the same cooperative approach to our work on the transition to net-zero, so important in this year of COP26. In 2019, we established the Climate Financial Risk Forum with the PRA and industry. Since then, we’ve:

  • published disclosure rules for premium listed companies and launched consultations on extending them
  • set expectations on design, delivery and disclosure of ESG investment funds
  • announced a sustainability TechSprint and Green FinTech challenge

Our first ESG Director, Sacha Sadan, is taking this work to the next level, working with international counterparts as we hope to establish a Sustainability Standards Board under the auspices of the IFRS.

As we consider far-reaching reform, international standards remain our anchor. 

The Treasury consultation on Wholesale Market Regulation also closes this week. The proposed reforms are far-reaching and will mean international firms can have confidence that we will maintain an open, global and market-leading approach. The FCA will move quickly to implement agreed changes.

Data and digital ambitions 

This international approach is at the heart of our data and digital ambitions.

Through the Global Financial Innovation Network, we re-launched our Testing initiative last October for firms testing innovative products or technology cross-border. 23 regulators across 5 continents are participating. I’m also pleased that in the last year, new partners at the Reserve Bank of India and Australian Prudential Regulation Authority have joined the Network.

Our regulatory sandbox, in its sixth year and now open all year round, also allows firms to experiment. It supported the first authorised investment firms using Distributed Ledger Technology to tokenise securities. It supported Digital ID solutions and more than 20 Open Banking tests.

More than 700 firms have used our Innovate services including the regulatory sandbox, direct support and advice unit, with the regulatory sandbox serving as a blueprint for 44 regulators globally.

And as we accelerate our goal of becoming a data and digital first regulator, this means increasing investment in our own capabilities, £120m over 3 years to maximise our move to the cloud. We anticipate, particularly as we explore expansion into a new Leeds office, hiring significantly more data scientists and data analysts. Regulatory reports are estimated to cost between £1.5bn to £4bn a year, with 20,000 rules across 58,000 firms. That’s why we’re working with the Bank of England on the Transforming Data Collection Initiative. By standardising data and leveraging new technology at scale, regulatory reporting can be delivered faster and at lower cost.

We will also be regulating more data-heavy businesses, and as demand for data increases, firms may be able to use, market or restrict data in ways which create poor user outcomes.

Our wholesale data Call for Input showed that some market participants believe trading data licensing fees are too complex, benchmark switching costs too high and data vendors are subject to high barriers to market entry. We’ll be publishing feedback before the end of the year and setting out what further steps we may take, considering the full range of our powers. 
Earlier this year, we joined the Digital Regulators Cooperation Forum or DRCF, a partnership with Ofcom, the Information Commissioner’s Office and the Competition and Markets Authority. 

While we have independent powers and objectives, we will achieve them more effectively by deeper cooperation and developing common capability, including in artificial intelligence and data ethics. We will shortly announce the DRCF’s first CEO.

The Forum has published its workplan and we intend over time to greatly increase the scope and scale of our cooperation. It may surprise you to know the firm that I have met most so far as FCA CEO is not a purely financial services firm, but is in fact Google, the main topic of discussion being online safety for retail financial services consumers, one of many challenges that requires a joined-up approach, including through the DRCF. 


In fact, there are few challenges which don’t require joined-up approaches. Profound forces – the pandemic, Brexit, technological change, the drive to a greener economy, demographic shifts – are transforming financial services and society. Each of these forces present their own challenges and opportunities. 

Partner with us to seize the opportunities.

So let me end with a request. Through open, timely dialogue, help us on this journey. Work with us to navigate the challenges. Help us ensure the UK remains a magnet for the best talent with a financial services industry that leads the way on diversity and inclusion. Partner with us to seize the opportunities.

And to help continue to fuel economic recovery, drive innovation that supports markets, and act as a shining beacon of high regulatory standards for financial centres around the world. Thank you.