FCA Enforcement Drops But Fines Increase

Research Examines Trends Of Past Five Years

30.06.2014

New research has suggested that the number of enforcement actions being taken by the Financial Conduct Authority and its predecessor fell in the past five years, although the size of penalties has risen.

The Global Enforcement Review 2014 published by consultancy firm Kinetic Partners found that the number of enforcement cases was around 12 per cent lower, although the average penalty value rose by a massive 1590 per cent from 2009.

According to the organisation, the findings demonstrated that regulatory bodies are looking to bring “severe action against big-ticket violations”.

Julian Korek, chief executive officer of Kinetic Partners, said: “Global regulators have demonstrated a more focused commitment to combating industry misconduct and pre-empting abusive behaviour.

“As financial services firms look to the future, it is vital that they understand regulatory agendas and priorities in order to prepare and respond effectively."

Expert Opinion
It is surprising that the number of FCA Enforcement action is falling. For many years it was increasing. The drop may be due to large scale investigations, such as the benchmark ones, which are complex and presumably resource intensive.

"The increase in steep fines is likely to remain a feature in the foreseeable future. Despite falling numbers of Enforcement actions, the FCA Enforcement Division is still to be feared."
Sarah Wallace, Partner