The Financial Conduct Authority (FCA) has received only 51 applications for its newly established Market Reform Advisory Group, a figure far below initial expectations, according to sources familiar with the matter.
Low Engagement Raises Questions
The advisory group was created to help shape post-Brexit market reforms, including the overhaul of listing rules and the replacement of retained EU law. The low number of applications has surprised officials, who had anticipated a much higher level of interest from industry participants.
One source told Financial News that the FCA had hoped for at least 100 applications. The group is intended to include representatives from asset managers, investment banks, and other market participants.
Possible Reasons for Low Uptake
Industry insiders suggest several factors may have contributed to the low response. Some firms may be wary of the time commitment required, while others might be concerned about potential conflicts of interest or the perceived effectiveness of the group. Additionally, the timing of the call for applications coincided with the busy summer period.
"The FCA's initiative is important, but firms are stretched thin with regulatory change," said a compliance officer at a major investment bank. "There may also be skepticism about how much influence the group will actually have."
Impact on Reform Agenda
The low application numbers could slow the FCA's efforts to implement its post-Brexit reform agenda. The regulator has been under pressure from the government to make the UK's capital markets more competitive, particularly after the loss of EU passporting rights.
The FCA has already made changes to listing rules to attract more companies, but the advisory group was seen as a key forum for broader market reform discussions. Without robust industry input, some worry that reforms may not fully address market needs.
FCA Response
An FCA spokesperson said: "We are pleased with the quality of applications received and are confident that the group will provide valuable insights. The number of applications does not necessarily reflect the level of engagement; we have had many informal discussions with industry participants."
The regulator plans to announce the members of the advisory group later this month. It remains to be seen whether the low application count will lead to a smaller group or if the FCA will extend the application deadline.
