FCA Has High Expectations For The Year Ahead

Regulator’s Annual Report Outlines Activity Across 2013-14


The Financial Conduct Authority (FCA) is proud of what it has achieved since its creation 12 months ago and has high expectations for the delivery of key projects across the coming year, according to its chairman.

In his statement included at the beginning of the body’s first annual report, John Griffith-Jones has outline that it has an ambitious agenda for the next 12 months and has a number of key priorities.

Among these are the recommendations of the Parliamentary Commission on Banking Standards set out in the Banking Reform Act, the guidance on pensions announced in this year’s Budget and the implementation of the European and international agendas.

In addition to publishing its first annual report, the FCA also published a review outlining its enforcement action across 2013-14. This revealed that the body published 56 notices across the period, as well as imposing £425 million in financial penalties, including some of its highest fines ever levied.

While the FCA took on more firms than individuals, in 2013-14 the organisation took action against 28 individuals and imposed fines totalling £3.6 million on them, 26 prohibitions, and obtaining five criminal convictions. 16 of those were Significant Influence Functions (SIFs).

Expert Opinion
From the statistics for actions against individuals, it looks as if in the majority of cases the outcome is the most draconian – a fine and prohibition order – the majority of individual actions being against senior management.

"The Enforcement Annual Performance Account records that the average cost of bring a criminal case is almost £2m incurred over an average length of almost 3 years. This is compared with a regulatory case averaging £267,000 per case taking 21 months from start to finish.

"Not all the FCA cases result in a public outcome – 34 private warnings were issues, mainly by Supervision. However 30% of cases were closed in 2013/14 with no further action being taken. It looks like Enforcement’s focus remains on careful case selection, picking cases which are the most serious and that can influence change of behaviour in the financial services industry."
Sarah Wallace, Partner