Context
The FCA wants to change how it publicises its enforcement investigations to increase the transparency of its enforcement work and its deterrent effect, and to disseminate best practice. Following a review, it also wants to change its Enforcement Guide to reduce duplication and make information about its processes more accessible. The Enforcement Guide, therefore, is to be completely re-drafted.
There can be long periods of time, often years, between when the FCA identifies misconduct and harm and announce the action it is taking to tackle it. Currently, very little information is published about the investigations being opened before taking action, or investigations which do not lead to action. This can lead to public concern about whether the FCA is taking appropriate action, can lead to industry concern in relation to the nature of the alleged misconduct being investigated, and can reduce the educational and deterrent effect of enforcement.
Key points to note and next actions
- Firms and the market will benefit from the FCA being clearer about the types of misconduct it thinks we think warrant a formal investigation.
- The FCA wants to proactively publish more information about enforcement investigations, including their opening and progress.
- This includes publishing the identity of the subject of the investigation, if that it is assessed as being in the public interest and if there are no compelling legal or other reasons not to.
- It will also include publishing updates on investigations and announcing that cases have closed where the investigations have not led to regulatory or other action.
- The FCA will continue to keep the fact of its investigations confidential in certain situations, but will decide whether and what to publish on a case-by-case basis, using a new public interest framework and taking all relevant facts and circumstances into account.
- The proposals recognise that there are specific legal considerations when information is published about individuals, so the FCA’s approach to publishing investigation announcements about individuals will be different; the FCA will not usually announce that it is investigating a named individual.
- The FCA’s intention is that an announcement will contain sufficient information for the public interest purposes it has identified in the relevant case, in particular to enable consumers, firms and other relevant market participants to understand the nature of our concerns.
- Feedback on the Consultation can be provided, by 16 April 2024, using the online response form by writing to Enforcement Law and Policy Fat the FCA’s London address, or by email: cp24-2@fca.org.uk.