FCA Enforcement Strategy Update

There was much discussion regarding the FCA’s previously published plans to announce investigations into firms before any regulatory findings were made about the firm’s conduct; these “naming and shaming” proposals were met with significant criticism from the industry and were largely abandoned by the FCA.

However, the new Enforcement Guide still has an “exceptional circumstances” test which details when investigations into regulated and listed firms will be announced by the FCA and there are three situations where the regulator considers that additional transparency is required:

• Where the FCA is investigating suspected unauthorised financial services, or a suspected offence relating to unregulated activity, and an announcement will warn consumers or investors or help the investigation.
• Where the fact of the investigation has been made public by the subject, an affiliated company or a regulatory body, government or public body.
• Anonymised announcements, not naming or identifying the subject of the investigation, where it would be helpful to educate people on the types of misconduct the FCA is investigating.

It is important to note that the changes will only be applicable to investigations which are launched on or after 3 June 2025.

The Enforcement Guide itself has been streamlined and reduced by some 250 pages removing duplicated content which will simplify the Guide with the aim of making it a more user friendly document.

Running alongside this is the continued drive for efficiency by the FCA’s enforcement division in general as they seek to improve the pace of their investigations for the benefit of consumers and the market which we have commented on previously [LINK]. The FCA noted that five recent investigations closed with a public outcome in less than 16 months, compared to an average length of 42 months in 2023/24.

Garon Anthony, Financial Services Disputes Partner comments:

“It is clear to see the FCA have finally taken on board the strength of feeling regarding their naming and shaming proposals in relation to enforcement investigations whilst also trying to increase the transparency regarding the work they do.

“The drive for efficiency is welcomed for the positive impact this will have on the economy and the industry as a whole.

“It will be interesting to see how the Enforcement Guide beds in particularly given the FCA have commented that they will continue to consult on any future changes; it is good to see they are listening to their stakeholders.”