The Financial Conduct Authority’s (FCA) Annual Work Programme for 2026/27 offers the most explicit statement 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, though many themes will feel familiar to those closely tracking regulatory developments, what distinguishes this programme is how directly it connects strategic intent with supervisory practice. This is not a policy wishlist; it is a preview of how firms will be assessed on the ground.
ACA recently discussed the FCA’s annual work programme and why it signals sharper supervisory focus.
Four priorities anchor the FCA’s supervisory activity for the year ahead: operating as a smarter regulator, supporting growth and competitiveness, helping consumers navigate their financial lives, and fighting financial crime.
Together, these signal a regulator that is increasingly data-led, more prepared to intervene, and markedly less tolerant of weak implementation. For buy-side firms in particular, the message is unambiguous: supervisory scrutiny is arriving earlier, cutting deeper, and focusing more intently on outcomes.
Governance and data quality under the microscope
The FCA’s drive to operate as a smarter regulator sits at the core of the programme and raises the bar for all firms, not just those that have historically attracted supervisory attention. Greater reliance on data, digitised processes, and advanced analytics is intended to sharpen regulatory efficiency — but it also sets higher expectations for what firms must be able to demonstrate. Data quality, management information, and decision-useful reporting have graduated from operational concerns to genuine governance issues.
Proportionality remains a stated FCA principle, but firms should not mistake this for leniency. Senior management will be expected to understand the firm’s risk profile, engage meaningfully with regulatory matters, and show — not merely assert — how controls function in practice. Where data is incomplete, fragmented, or inaccurate, the FCA is likely to treat this as a governance failing rather than an administrative oversight.
Artificial intelligence will play a significant role in this evolution. As the FCA’s own analytical capabilities advance, firms will increasingly be expected to demonstrate appropriate governance over their models, data, and decision-making tools, including clear accountability, validation processes, and oversight frameworks.
Growth ambitions don’t dilute accountability
Supporting growth and competitiveness remains central to the FCA’s broader agenda, and the 2026/27 programme extends this through anticipated reforms touching alternative investment managers, solo-regulated investment firms, and market infrastructure. Proportionate capital requirements, streamlined regulatory regimes, and clearer Consumer Duty boundaries are all intended to make it easier for firms to operate and scale.
However, greater flexibility comes with increased supervisory discretion. As regimes become more tailored, firms must be prepared to explain why their approach is appropriate and how risks are being managed. This is especially pertinent for asset managers, hedge funds, private equity firms, and alternative structures operating across multiple jurisdictions or with outsourced operating models. Growth ambitions do not weaken the FCA’s expectations around governance and individual accountability under the Senior Managers and Certification Regime (SM&CR) — if anything, they amplify them.
Consumer Duty reaches further than many expect
Although the FCA’s consumer-focused priorities are often framed in terms of retail outcomes, the supervisory implications extend well beyond firms with direct retail exposure. Consumer Duty expectations are now embedded firmly in the FCA’s supervisory thinking, and the 2026/27 programme makes clear this will not be changing.
Asset managers, wealth managers, and alternative investment firms can expect growing pressure to demonstrate fair value, appropriate distribution strategies, and effective outcomes monitoring — even where products reach end clients through intermediaries or are targeted at professional investors. Structural distance from retail customers is no longer a credible defence against supervisory challenge. Boards and senior management teams should be ensuring that Consumer Duty considerations are woven into governance and oversight arrangements, not treated as a narrow compliance task.
Financial crime: no let-up in expectations
Fighting financial crime remains a non-negotiable priority for the FCA, and there is no sign of reduced intensity in the year ahead. Fraud prevention, market abuse, and anti-money laundering controls all feature prominently, alongside continued emphasis on aligning surveillance, supervision, and enforcement activities.
Firms are expected to show that financial crime frameworks actually work — not simply that they exist on paper. This means proportionate but defensible Know Your Customer (KYC) processes, market abuse surveillance calibrated to enforcement risk, and effective use of data and technology. The closer alignment of the FCA’s supervisory, intelligence, and enforcement functions means that weaknesses identified during routine supervision are increasingly likely to escalate into formal intervention where firms cannot demonstrate effective controls.
Fees rising, tolerance for internal absorption limited
Running alongside the Work Programme, the FCA’s consultation paper CP26/11 sets out proposed regulatory fees and levies for 2026/27. Proposals include a 1% increase to application fees, minimum fees, and flat rate fees in line with the regulator’s ongoing activities budget, along with a modest uplift in the Annual Funding Requirement relative to the prior year.
The headline figures are not dramatic, but the direction of travel is clear. The FCA is not inclined to absorb cost pressures internally, and firms should plan accordingly. Regulatory cost increases should be factored into budgeting and planning, particularly where headcount growth, permission changes, or business expansion are on the horizon.
What firms should be doing now
Rather than waiting for further policy development, the 2026/27 programme is a prompt for firms to reinforce their fundamentals. As the FCA moves further towards an outcomes-based supervisory model, the question being asked is no longer whether frameworks exist, but whether regulatory expectations are genuinely embedded in how the firm operates day to day.
Boards and senior management should examine whether the information used to govern regulatory risk is accurate, timely, and truly decision-useful. Governance forums should demonstrate real challenge, clear escalation, and individual ownership — especially where judgement calls arise around regulatory scope, distribution models, or outsourcing arrangements.
SM&CR responsibilities should be reviewed to ensure they reflect operational reality. Where risks span traditional functional boundaries, oversight arrangements must keep pace. Firms should also revisit their operational resilience frameworks, ensuring important business services are clearly defined, impact tolerances are credible, and third-party providers are subject to effective oversight. Outsourcing does not reduce accountability, and the FCA’s supervisory focus on third-party risk shows no sign of easing.
Read the full ACA Group post here.
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