The Financial Conduct Authority (FCA) has announced that it is reviewing and updating the requirements, directions, and limitations applied to over 9,000 regulated firms, with approximately 11,000 changes expected in total. This important exercise aims to ensure that the data the FCA holds is accurate, up-to-date, and relevant to each firm’s current business model.
Why is the FCA making these changes?
Following a comprehensive review, the FCA found that some of its requirements, directions, and limitations had become outdated, been superseded by newer guidance, or contained minor errors. By updating this information, the FCA aims to be a smarter, more efficient regulator, improving both the quality of its information and the service it provides to firms and consumers.
These changes will help ensure that firms have a clearer understanding of their obligations, consumers benefit from transparent information, and supervisors can work with the most accurate data possible.
Understanding requirements, directions, and limitations
Requirements and directions are regulatory obligations that the FCA places on firms to take specific actions or to stop certain activities. For example, the FCA might impose a requirement that prevents a firm from onboarding new customers or requires it to hold sufficient assets to meet future liabilities owed to consumers.
Limitations, on the other hand, typically restrict the scope of a firm’s permissions—such as allowing a firm to provide debt counselling but not debt management services. These measures help the FCA ensure that firms only engage in activities they are properly authorised and equipped to handle.
Requirements, directions, and limitations can be voluntary—agreed with the FCA as VREQs, VDirs, or VVOPs—or they can be imposed using the FCA’s own-initiative powers as OIREQs, OIDirs, or OIVOPs. They are typically published on the Financial Services Register, which consumers and other stakeholders can use to check a firm’s current status.
How will the updates be made?
The FCA will be applying two types of updates as part of this review. Immaterial updates—small corrections that do not change what a firm can or cannot do—will be applied automatically, with no action required from the firm. Substantive changes—which could affect a firm’s activities—will involve direct contact from the FCA to discuss the proposed amendments.
The changes will be rolled out over the coming months. Firms do not need to take any action unless the FCA contacts them, but they should continue to monitor their information on the Financial Services Register and stay alert to any communication from the regulator.
What should firms do next?
At Neopay, we recommend that firms familiarise themselves with the different types of requirements, directions, and limitations that might apply to them and review their own regulatory obligations in light of these updates.
If you have any questions about how these changes might affect your firm or if you would like guidance on managing FCA-imposed measures, Neopay’s compliance specialists are here to help. We can work with you to interpret any changes, support your compliance strategy, and ensure you remain fully aligned with FCA expectations.
Contact our team to find out how we can support you.
