Britain’s Financial Conduct Authority (FCA) has committed to a series of pro-growth reforms, including potential changes to fee caps for pension schemes. This initiative is part of a larger effort to direct retirement savings into higher-risk, potentially higher-reward assets. The FCA’s proposals aim to stimulate economic growth and enhance the competitiveness of the UK financial sector.
In a letter addressed to Prime Minister Keir Starmer, FCA CEO Nikhil Rathi outlined the watchdog’s intentions to expedite company listing applications on the London Stock Exchange and reduce bureaucratic hurdles for mortgage approvals. These measures respond to the Labour government’s call for regulators to ease rules and promote growth since assuming power last year. Both the FCA and the Bank of England’s Prudential Regulation Authority operate under a secondary objective to foster growth and competitiveness.
The FCA plans to review the existing cap on pension fees to ensure consumers are not discouraged from making certain investments due to higher performance charges, which are typically applied to specific returns. Government ministers are advocating for pension funds to increase allocations to unlisted and early-stage businesses, infrastructure projects, and green energy initiatives. These sectors often necessitate greater research and expertise, potentially raising costs for providers.
Furthermore, the FCA is proposing to eliminate a seven-day research waiting period for initial public offerings (IPOs). These reforms collectively signal a move towards a more streamlined and growth-oriented regulatory environment within the UK financial sector.
