HM Treasury’s November 2024 recommendations letter to the Financial Conduct Authority is not a routine statement of support for financial services. Dated 14 November 2024 and published on 15 November 2024, it is a formal notice from the Chancellor to FCA chief executive Nikhil Rathi under section 1JA of the Financial Services and Markets Act 2000. The letter makes clear that growth and international competitiveness should be given more weight in how the FCA carries out its functions, while its statutory consumer protection, market integrity and competition duties remain in place. (gov.uk) The procedural point is as important as the policy message. This is the mechanism through which the Treasury sets out the aspects of government economic policy that the FCA must have regard to, and the November 2024 letter replaces earlier remit letters. The document is also to be laid before Parliament, which gives it a defined accountability route rather than leaving it as an informal ministerial signal. (gov.uk)
The scale of the institution affected by the letter helps explain why the document matters. HM Treasury’s publication states that the FCA regulates the conduct of around 50,000 firms, prudentially supervises around 48,000 firms, and sets specific standards for around 18,000 firms. Any change in how the regulator interprets growth, competitiveness and proportionality therefore reaches across a large share of the UK financial system. (gov.uk) The legal framework is also more exacting than many earlier remit processes. The Treasury must make recommendations to the FCA at least once in each Parliament, and amendments explained in the Financial Services and Markets Act 2023 mean the FCA must respond within 12 months and then provide annual updates unless HM Treasury says a further update is not required. (gov.uk)
In the letter itself, the government’s economic policy is defined as restoring broad-based and resilient growth on strong and secure foundations, with price stability and financial stability treated as necessary preconditions. HM Treasury groups that policy into four strands: macroeconomic stability, management of the public finances and taxation, supply-side reform with industrial strategy, and growth of the financial services sector alongside consumer protection and support for the net zero transition. (gov.uk) That framing matters because it sets the terms on which later FCA decisions can be assessed by ministers and Parliament. The regulator is not being directed simply to reduce standards. It is being asked to show, across rule-making and supervision, that its approach can support investment, competition and market entry while remaining within its statutory objectives. (gov.uk)
The recommendations then move from principle to administration. HM Treasury asks the FCA to keep the secondary international competitiveness and growth objective fully embedded across policy-making, supervision and firms’ experience of dealing with the regulator. The letter also points to support for new and innovative firms, the safe adoption of artificial intelligence, easier access to suitable advice and products, a more positive experience for applicants and regulated firms, and lower administrative burdens where this can be done without weakening standards. (gov.uk) The document also places weight on capital formation, sustainable finance and inclusion. It says the FCA should have regard to the role of financial services in supporting the real economy, maintaining the UK’s position as a global finance centre, advancing sustainable finance, backing competitive capital markets through the pensions review, and reinforcing financial inclusion and home ownership. (gov.uk)
For firms, the practical effect is that regulatory process moves closer to the centre of economic policy. The Treasury is not only asking the FCA to support growth in general terms; it is explicitly concerned with how the regulator behaves from initial application onwards, how much data it requests, how complex its handbook remains, and whether regulatory design makes it easier or harder for firms to start, scale and remain in the UK. (gov.uk) The FCA’s first formal response, added to the GOV.UK page on 10 July 2025, gives an early indication of how that may look in practice. The regulator said it was retiring more than 100 pages of outdated guidance, consulting on the withdrawal of data collection returns expected to benefit 16,000 firms, streamlining supervisory communications, and removing 92 historic Dear CEO letters from its website. (gov.uk)
The letter also signals a change in tone around risk. HM Treasury says the FCA should consider how consumers and authorised firms can make informed choices, including where that involves higher levels of risk, and links that approach to growth, innovation and access to finance. That does not displace consumer protection duties, but it does show a stronger ministerial interest in whether regulation is discouraging investment decisions that government views as economically useful. (gov.uk) In its response, the FCA connected that message to specific work on the Advice Guidance Boundary Review, mortgage stress-testing flexibility, a discussion paper on the future of the mortgage market, and a wider debate about what level of failure or consumer harm the system should tolerate if the policy aim is to support greater economic risk-taking. These issues go directly to how the regulator balances access, innovation and loss. (gov.uk)
There is also a constitutional point. Because the letter is issued under statute, laid before Parliament and followed by annual FCA responses, it creates an ongoing reporting cycle between ministers and an independent regulator. On that basis, the November 2024 letter is best read as a standing accountability framework for financial regulation, not a one-off policy announcement. (gov.uk) The GOV.UK page has since been updated twice to add the FCA’s subsequent responses, first on 10 July 2025 and again on 13 July 2026. That chronology matters because it shows the recommendations now operate as a continuing test of whether the FCA can demonstrate movement on growth, competitiveness, administrative proportionality and market access over time. (gov.uk)