So far, in the 2016/17 financial year the UK’s FCA penalties stand at £18m compared with the total of £885m in 2015/16. At ten months into the financial year it is unlikely that the number of enforcement outcomes or value of penalties will get close to the figures for recent years by the end of March.
The reason for the lower financial penalties and fewer outcomes from investigations this year could be a sign of a more conciliatory approach from the FCA, or the long lead in time for new enforcement actions as large wholesale market conduct investigations come to an end and staff are redeployed to other cases. But this is likely to change in 2017 and beyond.
Resources are committed to conducting and following up on a large number of thematic reviews and market studies, which, history shows, tend to lead to enforcement or other action. The FCA also has new and developing areas of focus, such as IT system resilience and the protection of vulnerable groups of consumers, as well as the more familiar focus on senior management, openness with the regulators and market abuse, all of which give rise to the prospect of more enforcement action in the future.
In the article UK enforcement round up for 2016 and looking ahead by Piers Reynolds and Sharon Grennan, we consider themes and implications of enforcement actions in 2016 and potential future targets.