The Financial Conduct Authority (FCA) announced that it is now committed to carrying out enforcement cases more quickly as the organization seeks to increase the deterrent impact of its enforcement actions.
The FCA is a private financial regulatory body in the United Kingdom (UK). The Authority’s purpose is to regulate the conduct of many of the businesses located in the UK in order to maintain integrity and stability within the financial markets. In other words, it is the UK’s version of the Security and Exchange Commission, except that the FCA works independently from the country’s government.
In the future the FCA will focus on a streamlined portfolio of cases, aligned to its strategic priorities where it can deliver the greatest impact. The FCA will also close those cases where no outcome is achievable, more quickly.
Transparency Is The Top Priority
The FCA’s hopeful strategy represents a significant departure from the current practice, where investigations are only announced in very limited circumstances. As part of the new approach the FCA has begun a consultation on plans to be more transparent when an enforcement investigation is opened. Under the plans the FCA will publish updates on investigations as appropriate and be open about when cases have been closed with no enforcement outcome.
“By being more transparent when we open and close cases we can enhance public confidence by showing that we are on the case,” said Therese Chambers, Executive Director of Enforcement and Market Oversight at the FCA. “At the same time, we will amplify the deterrent impact of our work by enabling firms to understand the types of serious failings that can lead to an investigation, helping them to change their own behavior more quickly. Greater transparency will also drive greater accountability for us as an enforcement agency.”
Steve Smart, also Executive Director Enforcement and Market Oversight added onto Director Chambers’ announcement in stating the following: “Reducing and preventing serious harm is a cornerstone of our strategy. By delivering faster, targeted and transparent enforcement, we will reduce harm and deter others. We will also make greater use of our intervention powers to stop harm in real time.”
Any decision to announce an investigation would be taken on a case-by-case basis and depends on a variety of factors which will indicate whether to do so is in the public interest. These include whether the announcement will protect and enhance the integrity of the UK financial system, reassure the public that the FCA is taking appropriate action, or assist in any investigations.
Announcing an investigation does not mean that the FCA has decided whether there has been misconduct or breaches of its requirements. Investigations into individuals will be different and the FCA will not usually announce these types of investigations.
These changes exhibit a significant shift in the FCA’s enforcement approach. In implementing this new approach, the FCA hopes to deliver quick resolutions to each of its enforcement actions in an efficient manner. Through this, the Authority hopes to implement a sense of transparency, accountability and integrity within the UK’s financial marketplace. 