The Financial Conduct Authority (FCA) is planning to review its client categorisation rules, aiming to unlock more opportunities for wealthy investors and support capital markets.

Client categorisation rules seek to protect retail clients investing in capital markets without putting ‘undue restrictions’ on professional clients.

The FCA said that reviewing the rules would ensure that expectations remained proportionate when dealing with wealthy investors, and will consult on the elective professional client categorisation later this year.

It argued that the review would give confidence to firms and support investment in capital markets, which in turn would boost the competitiveness of financial services.

The reforms will build on 10 growth initiatives that have already been delivered by the FCA since January, with the regulator planning to complete around 50 initiatives by the end of the year.

The regulator outlined the growth initiatives it has already completed, including the introduction of the new private stock market PISCES, the new Digital Securities Sandbox, and the extension of the pre-application support service.

Work on other initiatives, such as changes to prospectus rules and getting rid of ‘unnecessary’ data reporting, is “well underway”.

Commenting on the newly announced review, FCA chief executive, Nikhil Rathi, said: “Modernising the client classification regime will provide greater clarity about the rules and protections applying to different customer groups, particularly for wholesale firms.

“We want to rebalance risk to support growth and competitiveness, which is at the heart of our strategy.

“We are delivering a large number of reforms to support a bolder risk appetite, making it easier for companies to raise capital and reimagining financial advice and guidance to boost investment.”

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