On 24 April 2019, the UK Financial Conduct Authority published its ‘Approach to Supervision’ and its ‘Approach to Enforcement’.
Both of these approach documents provide a helpful insight to firms on the FCA’s approach to both supervision and enforcement.
The FCA’s approach to enforcement gives the following insights:
– The “overriding principle in our approach to enforcement is a
commitment to achieve fair and just outcomes in response to misconduct.
Wrongdoers must be held to account and our rules and requirements must
be obeyed”;
– “Not all breach’s of our rules or requirements constitute
serious misconduct. Many breaches can be addressed and remedied
elsewhere (and we expect them to be) without the need for enforcement
action, especially where the error is technical or minor”;
– “Firms and individuals should not wait for an investigation to end before acting in a way they think is right”; and
– “We aim to make sure the sanction is sufficient to deter the firm
or individual from re-offending and deter others from offending”.
The FCA’s approach to supervision also gives the following insights:
– “We expect firms and their employees to meet [our] standards and hold them to account when they fail to meet them”;
– The supervisory principles (a) are forward looking, (b) focus on
strategy and business models, (c) focus on culture and governance, (d)
focus on individual and firm accountability, (e) are proportionate and
risk-based, (f) involve two-way communication, (g) are co-ordinated and
(h) put right systemic harm that has happened and stop it happening
again;
– Culture and business models are still key things the FCA considers important;
– The FCA continues to adopt a decision-making framework (see, for example, Chapter 4; there are some real nuggets of information here).
