Therese Chambers has given a speech today confirming next steps on the FCA’s proposals to announce investigations (originally set out in CP24/2), following some particularly strong push back from the industry and government ministers (the FCA notes that it received over 130 responses and the regulated community was “overwhelmingly against” the plan).  Respondents may be disappointed to learn that the FCA is not abandoning the proposal entirely and clearly wants to change what it views as “the odd situation” of being the odd one out amongst fellow UK regulators.  The FCA cites as an example a case involving parallel investigations by the FCA and FRC where the FRC went public on an investigation but the FCA did not (without explaining why its current “exceptional circumstances” policy did not allow an announcement in this case).  

However, some progress has been made.  Key takeaways include: 

• Criterial for public interest test: The FCA has heard “loud and clear” that the criteria for the proposed public interest test to be used on a case by case basis to determine whether to announce were too high level and lacked specificity.  The FCA is planning to address this by intensifying its industry engagement this Autumn, meeting with trade associations and firms and providing more detail including case studies on how the criteria would apply, what announcements would look like and numbers of cases that might be affected.  
• Making representations: Allowing firms to make representations on any proposed announcement will also be part of any proposal taken forward, contrary to the initial proposal which suggested firms would only have one day’s notice before an announcement would be made.  
• Approach to enforcement: Having previously signalled a streamlining of its enforcement case load, the FCA appears to remain committed to working on a “focused number of cases” seeking to maximise the deterrent impact and delivering outcomes “much faster”.
• UK competitiveness: Although the initial response to concerns around the impact of the proposal on the international competitiveness of the UK seemed to be based on this not being the FCA’s primary objective, the FCA is now seeking to reassure the industry that it is mindful of all its objectives including supporting the international competitiveness of the UK’s financial services and growth of the economy.   

The FCA says that it plans to provide greater detail on how the proposal could work in practice “[l]ater this Autumn”. Meanwhile, the House of Lords Financial Services Regulation Committee has reopened its call for evidence on this issue, with submissions due by 11 October 2024.

Change for the better: the FCA’s evolving approach to enforcement | FCA

CP24/2: Our Enforcement Guide and publicising enforcement investigations – a new approach (fca.org.uk)