The Financial Conduct Authority’s (FCA) Annual Work Programme for 2026/27 offers the clearest picture yet of how the regulator plans to supervise firms as it moves into the second year of its five-year strategy.
According to ACA Group, while many of the themes are not new, the programme marks a meaningful shift from policy ambition to supervisory execution — signalling precisely how firms should expect to be assessed in the year ahead.
ACA recently discussed the FCA’s annual work programme and why it signals sharper supervisory focus.
Four priorities sit at the core of the programme: operating as a smarter regulator, supporting growth and competitiveness, helping consumers navigate their financial lives, and fighting financial crime. Together, they point to an authority that is increasingly data-driven, more intervention-ready, and far less forgiving of weak implementation. For buy-side firms in particular, supervisory scrutiny is becoming sharper, earlier, and more focused on outcomes.
Governance and data expectations rise
The FCA’s drive to become a smarter regulator has implications that extend well beyond its own operations. Greater use of data, digitised processes, and enhanced analytics are raising the bar for supervised firms. Data quality, management information, and decision-useful reporting are no longer purely operational matters — they are governance issues. Where information is incomplete, inaccurate, or poorly integrated, the FCA is now more likely to treat this as a fundamental governance failing rather than an administrative oversight.
Efforts to reduce unnecessary regulatory burden — including streamlined data collection and digitised applications — should benefit well-prepared firms. Artificial intelligence will play an increasingly central role in this transformation. As the FCA develops its own advanced analytical capabilities, firms will be expected to demonstrate appropriate governance over their data, models, and decision-making tools, with clear accountability, validation, and oversight frameworks in place.
Growth objectives do not dilute accountability
Supporting growth and competitiveness remains a core strand of the FCA’s strategy. The 2026/27 programme builds on this through anticipated reforms affecting alternative investment managers, solo-regulated investment firms, and market infrastructure. Proportionate capital requirements, streamlined regimes, and clearer boundaries around the Consumer Duty are all intended to enable firms to scale more efficiently.
Yet greater flexibility brings increased supervisory discretion. As regulatory regimes become more tailored, firms will need to clearly articulate why their approach is appropriate and how risks are managed — particularly asset managers, hedge funds, private equity firms, and other alternative structures operating across jurisdictions or with outsourced operating models. Growth ambitions do not reduce regulatory expectations; they place greater emphasis on judgement, governance, and individual accountability under the Senior Managers and Certification Regime (SM&CR).
Consumer Duty reaches across the buy-side
Although much of the FCA’s consumer-focused work is framed around retail outcomes, the implications reach further than many buy-side firms may assume. Consumer Duty expectations are now firmly embedded in supervisory thinking, and asset managers, wealth managers, and alternative investment firms will increasingly be required to evidence fair value, appropriate distribution strategies, and effective outcomes monitoring — even where products are distributed through intermediaries or targeted at professional investors.
Structural distance from end clients no longer provides sufficient cover from supervisory challenge. Senior management teams must ensure Consumer Duty considerations are genuinely embedded in governance and oversight arrangements, rather than being treated as a narrow compliance exercise.
Financial crime: no let-up in expectations
Combating financial crime remains a non-negotiable priority for the FCA, with fraud, market abuse, and anti-money laundering controls all featuring prominently in the programme. Firms are expected to demonstrate that financial crime frameworks are effective in practice, not merely comprehensive on paper. This includes proportionate but defensible Know Your Customer (KYC) processes, market abuse surveillance aligned to enforcement risk, and appropriate use of data and technology.
As the FCA’s own capabilities evolve, its expectations of firms’ sophistication will continue to rise. The increasing alignment of supervisory, intelligence, and enforcement functions means that weaknesses identified through routine oversight are more likely than ever to escalate into formal intervention where effective controls cannot be evidenced.
Regulatory fees: modest increases, clear message
The FCA’s consultation on regulatory fees and levies for 2026/27 — published through CP26/11 — proposes a 1% increase to application fees, minimum fees, and flat rate fees, alongside a modest rise in the Annual Funding Requirement compared with the previous year. While the headline figures are relatively small, the broader message is clear: the FCA has little appetite for absorbing cost pressures internally. Firms should factor ongoing regulatory cost increases into their planning, particularly where headcount growth, permissions changes, or business expansion are under consideration.
What firms should be doing now
Rather than waiting for further policy developments, firms should focus on strengthening their fundamentals now. Boards and senior management should assess whether the information used to govern regulatory risk is accurate, timely, and decision-useful. Governance forums must demonstrate genuine challenge, escalation, and ownership — particularly where judgement calls arise around regulatory scope, distribution models, or outsourcing.
SM&CR responsibilities should be revisited to ensure they reflect how firms actually operate, and operational resilience frameworks should be reviewed to confirm they are robust, with clearly defined important business services, credible impact tolerances, and effective oversight of third-party providers. Reliance on outsourcing or technology providers does not diminish accountability.
The perimeter is shifting
The FCA’s latest perimeter analysis reinforces many of the themes running through the Annual Work Programme. Rapid technological change, evolving business models, and growing dependence on outsourcing are blurring the line between regulated and unregulated activity. This is especially apparent in areas such as cryptoassets and emerging market structures, where the FCA has signalled a clear willingness to intervene where consumer or market integrity risks arise.
The FCA has been explicit: uncertainty at the perimeter should not be mistaken for regulatory tolerance. For most buy-side firms, the key message is that reliance on technical scope arguments or legacy assumptions is increasingly risky. The regulator is actively testing boundaries — and is prepared to act where misalignment creates harm or undermines market confidence.
Read the full ACA Group post here.
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