Policy paper

Financial Conduct Authority: Performance Review Meeting – February 2026

Updated 28 April 2026

Record of the meeting between the Economic Secretary to the Treasury and the Chief Executive of the Financial Conduct Authority (FCA).  

1. On 2 February 2026, the Economic Secretary to the Treasury (EST), Lucy Rigby, met the Chief Executive of the Financial Conduct Authority (FCA), Nikhil Rathi, to discuss the FCA’s performance against its statutory objectives and in relation to the government’s economic policy.
2. The EST thanked the FCA for its recent work, including its contribution to the Prime Minister’s visit to China, and its work on motor finance, targeted support and reforms to the redress framework and operation of the Financial Ombudsman Service. The FCA noted strong interest from a broad range of firms in targeted support ahead of its launch in April.
3. The CEO provided an update on the FCA’s Strategy for 2025 – 2030, and explained that the FCA is focused on implementation of reform at pace and supporting innovation, which has been a particular focus of industry feedback. He also highlighted the UK’s regulatory stability and predictability as a particular strength.
4. The EST and CEO discussed artificial intelligence (AI), including in the context of recent recommendations from the Treasury Select Committee to government and the FCA. They agreed on the importance of striking an appropriate balance between addressing risks and avoiding over‑regulation that could stifle innovation. The CEO noted that industry was not currently in favour of extensive new regulatory guidance. Both agreed it would be important to build on the UK’s strengths in AI research and development, while remaining alert to potential risks, and that this required the FCA and government to continue working closely together.
5. The CEO updated the EST on the FCA’s work on smarter regulation. He outlined the FCA’s efforts to streamline and rationalise the information and reporting requirements on firms while ensuring that it continued to collect the data necessary to deliver its objectives, including on market integrity. The EST agreed that  it was important that the FCA has access to the data it needs, but that requests should be proportionate and targeted. The CEO observed that firms that had addressed legacy IT systems and improved data quality were finding regulatory reporting less burdensome.
6. The CEO outlined the FCA’s supervisory reform programme. He noted that the FCA’s decision to retire  of ‘Dear CEO’ letters and replace them with market reports had been positively received by industry and the FCA is working to identify further opportunities to simplify and rationalise its approach.
7. The EST requested an update on the FCA’s work to review the application of the Consumer Duty, particularly to firms primarily engaged in wholesale activity. The CEO confirmed that, in line with his letter to the Chancellor in September 2025,  the FCA was currently consulting on client categorisation, including how the Consumer Duty applies across different segments of the market, and there was opportunity for HM Treasury to revise financial promotion legislation to align. The FCA plans to consult on the treatment of non-UK business in the first half of 2026. He reported that industry was broadly content with the direction of travel, though there were some calls in certain sectors for more tailored approaches and some consumer organisations had raised concerns. He stressed that the FCA does not support complete exemptions to the Consumer Duty, but was exploring options to ensure a proportionate application.
8. The EST asked the CEO about the FCA’s work on growth and competitiveness, including the FCA’s and PRA’s joint ScaleUp Unit, as announced under the Leeds Reforms, and the Office for Investment: Financial Services. The EST underlined the importance of ensuring firms are aware of the support available. The CEO agreed and underlined that, while the FCA’s initiatives were playing a useful role in supporting scaling firms, wider factors beyond regulators’ remits – including tax, skills and visas – also influenced the UK’s attractiveness as a location for high growth financial services and technology businesses.