A couple of weeks ago, the FCA released the last of the five approach documents – on Supervision and on Enforcement - promised when it published its Mission a year ago.
These warrant a good deal of attention in their own right. For this weekend, however, it makes sense to take a step back and look at the approach documents as a whole - Consumers, Competition and Authorisation are the other three - and see what we can infer about FCA regulation.
It's worth starting with the recognition that this is the fullest exposition of how the regulator sees its role since the new FSA published New Regulator for the New Millennium (NRNM) in the early 2000s. That said, the approach documents - even when read alongside the Mission - are less coherent than NRNM.
This isn't a criticism. NRNM largely ignored inherent internal differences in strategy, whereas these are clearly discernible through the approach documents. The latter is better, both more transparent and more realistic.
In this light, the FCA's commitment to setting out the basis of its regulation, and the sheer effort involved, should be welcomed. The next stage is for the FCA ensure the content of these documents is clearly reflected in the Business Plan it will publish shortly.
Historically, this has been a step too far. Notoriously, NRNM, which focused a lot on how the FSA would prioritise, was followed by a Business Plan than contained an infeasible 46 priorities. Even worse, almost all were policy-focused, with little for those in Supervision, Authorisation or Enforcement to relate to. Hopefully the FCA will avoid this trap. However, it will be harder not to over-promise, and there are signs across the approach documents that this temptation remains strong.
Here are four areas where we should be able to look through and see the clear influence of the Mission and approach documents:
1. Prioritisation: Look for how much space is formally devoted to Brexit, and how much other activity is due to finish before the summer or not start until 2019.
2. Assessment of harm/public value: Logically, this should drive some implicit, but still visible, ranking between different sectors rather than the normal "cover the waterfront" strategy.
3. Vulnerable consumers: Rightly, the FCA has made much of financial vulnerability across a range of ages and situations. From the Business Plan, we should begin to discern some of the groups and situations it doesn't currently see as vulnerable.
4. Evaluation: The Mission and its spin-off documents have promised much in this space, and we should start to see much more formal evaluation of regulatory effectiveness. This is extremely difficult to do well, and requires both significant investment and the willingness to admit when regulation hasn't worked.
The FCA's Mission and the subsequent approach documents provide a generational chance to reset industry and public attitudes to regulation. Hard as this has been to date, history suggests that the next phase - translating theory into planning – will be harder still.
When the FCA launched its Mission, it committed to publishing a series of documents that would explain its approach to regulation in more depth. These articulate how the FCA carries out its main activities, aiming to provide transparency to its thought process and decision-making.