FCA Establishes Regional Presence in the USA and APAC

The FCA has announced the appointment of two regulatory representatives establishing its presence in the USA and APAC regions. Why is this necessary? How will help the UK?

Establishing two regional offices aim to primarily strengthen the FCA’s global regulatory influence and keep pace with the increasingly interconnected nature of financial markets. The FCA is already a key international regulator participating in various international forums, so what additional benefits can be gained from these appointments?

Firstly, the financial markets are global. Many UK-based financial institutions operate internationally, and international firms operate in the UK. A physical presence abroad enhances the collaboration with other regulators such as the US Securities and Exchange Commission (SEC) and Australian Securities and Investments Commission (ASIC).

Secondly, being closer to key financial hubs helps the FCA gather real-time insights into merging risks, innovations (eg fintech or crypto), and global trends. This helps in better policymaking in the UK.

Additionally, since leaving the EU, the UK is keen to maintain its status as a global financial centre. By engaging more directly with non-European regions, the FCA supports UK firms in accessing overseas markets and ensure that the UK’s regulatory voice continues to be heard globally.

Finally, a physical presence in these regions can help further influence international standards. Having a seat at global discussions enables the FCA to shape international financial regulation, and ensure standards align with the UK’s interests.

That can only be good news for the UK, but how will it impact the FCA?

 Regulatory Enhancements:

There are several benefits to be gained from this move including:

• Improved supervision of global firms: As many firms operate across borders, the FCA can better oversee cross-border risks by working closely with foreign regulators
• Faster regulatory responses: The FCA can act more quickly to address emerging global risks like cyber threats, market manipulation, or systemic risk from large firms
• Support for UK firms aboard: UK firms expanding overseas can benefit from regulatory clarity and reduced friction if the FCA fosters better cooperation
• Enhanced innovation oversight: The US and APAC are hubs for FinTech innovation. Closer ties will enable the FCA to understand and respond to innovations that may impact UK markets.

If these are the envisaged benefits of setting up regional hubs, then no doubt this will also impact financial services.

What Can Financial Services Expect From the Regulators?

Firms can hope for more aligned regulations across jurisdictions whilst also reducing compliance complexity over time. If the regulator expects to have improved oversight, then this could help safeguard the UK markets and by reducing the risk of market shocks, boosting investor and consumer confidence.

We can also expect to see a more proactive approach to risk management. The FCA will be better placed to anticipate and respond to risks more quickly, potentially introducing pre-emptive regulations or guidance.

Furthermore, by supporting international expansion and adapting regulations to global standards, UK firms can become more competitive. Helping to support the government’s objective of maintaining the UK’s position as a leading financial services hub and increasing investment into the UK.

 A Leading Global Financial Services Hub:

As the UK wishes to remain competitive and influential in global finance, especially post-Brexit, the FCA’s overseas footprint plays a key role in that ambition.

By being on the ground in the USA and APAC, the FCA can help shape international regulatory standards, ensuring they reflect UK interests. It can also promote the UK’s regulatory regime as stable, credible and innovation-friendly, making the UK more attractive to investors and firms.

The FCA can help support UK firms in overseas markets by helping firms to navigate regulations and reduce barriers to market entry. Fostering regulatory cooperation should smooth approval processes and provide mutual recognition of standards.

International firms gain confidence knowing that the UK regulator understands and is engaged with their home markets. This also reinforces the UK as a safe, well-regulated, and globally connected place to do business.

Supporting the FCA Strategy:

The FCA’s 3-year strategy to 2025 included goals that are aligned with their global approach of:

• Reducing and preventing serious harm by early detection of global risks & improve oversight
• Setting and testing higher standards by benchmarking UK standards against international practices
• Promoting competition and positive change by spotting fintech trends early, adapting regulations and fostering innovation

This goes some way towards ensuring that the UK remains a place where global innovators want to operate, supporting competition in financial services.

The FCA’s international footprint strengthens the UK’s position in global finance. It’s a strategic move that aligns national economic goals with the FCA’s core mission of protecting consumers, ensuring marketing integrity and promoting competition.

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