FCA earmarks £30 million for Brexit works as regular activities reined in
Britain's financial watchdog has made "challenging decisions" about its priorities and cut back on new initiatives this year as it earmarked £30 million to deal with the Brexit impact.
As part of its 2018/2019 business plan released on Monday, the Financial Conduct Authority (FCA) said its resources would be focused on helping both the Government and regulated firms prepare for the EU withdrawal.
It is now set to spend £30 million to deal with Brexit-related issues, £14 million of which will come from "reprioritising; delaying or reducing non-critical activity and finding more effective ways to deliver our regulatory requirements".
That includes limiting the number of new initiatives that the FCA was able to take on this year.
The remaining funds will come from the FCA's reserves as well as the fees it charges firms - with a "focus" on companies that are expected to be most affected by Brexit.
FCA chief executive Andrew Bailey said the focus on Brexit "inevitably" affected the amount of work that the supervisor could take on in other areas.
"We recognise that this year we need to dedicate a significant amount of resource to withdrawal from the EU," he said.
"As a result, setting our priorities this year has involved a particularly rigorous level of scrutiny and challenge to focus on areas where we see the greatest potential for harm," Mr Bailey added.
The watchdog has given no steer as to whether this might be the peak of its Brexit costs but assured it would "closely monitor the progress of negotiations and the potential for any further impact on our cost base".
Sarah Isted, a financial services partner at PwC, said the FCA's focus on Brexit over the next year "won't be a surprise for firms" but that "by highlighting the impact itself, the regulator is illustrating the amount of work still to be done and shows why firms need to keep their foot on the gas of Brexit planning."
The FCA's Brexit action plan for the year ahead includes providing "technical assistance" to the UK Government in both EU talks and other free trade negotiations, working with regulated firms to understand their future plans and the impact that would have on markets and consumers, and assessing the effect of the transition agreement.
It will also ensure there is an "appropriate transition" to a new supervisory model for European Economic Area firms.
The FCA also confirmed in its business plans that its offices would soon move from Canary Wharf to the International Quarter in Stratford, London this year, finally bring together its staff in one building.
It said that, alongside improved tech infrastructure, the move would allow the FCA to "work more effectively."