The FCA has confirmed that from 30 April 2025 it will stop issuing and publishing portfolio letters.
This follows the FCA's announcement last month1 that it would clarify its position on historic supervisory communications and forms part of the FCA's strategy to simplify its requirements applicable to firms.
Since 2020, the FCA has used portfolio letters as a supervisory tool to communicate with firms that share a common business model. The portfolio letters highlight to firms the FCA's view of the main risks of harm in a particular sector, the action it expects firms to take and the supervisory actions planned by the FCA in that sector.
Their cessation is however unlikely to leave a lacuna in supervisory communications. The FCA has stated that it will instead publish a small number of market reports which will include communications relevant to different types of firms and insights from its supervisory work. The FCA has also confirmed that Dear CEO Letters will still be used to address senior management about significant issues that require action.
Whilst it remains to be seen whether the FCA will issue any final portfolio letters before the 30 April deadline, the FCA has clarified that until market reports are published later this year, firms should continue to refer to relevant portfolio letters and Dear CEO letters for guidance on the FCA's supervisory approach.
You can view the current portfolio letters on the FCA's Supervisory correspondence website page.
Footnote
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