WilmerHale – FCA’s approach to assertive supervision

22nd February 2024

In this month’s Financial Services Insight, WilmerHale, a prominent legal firm, offers an introduction to critical aspects of Financial Conduct Authority (FCA) enforcement, with its new strategy that aims to be seen as an “assertive, adaptive and innovative” regulator.

The ‘new’ assertive FCA

Since 2021, the FCA has had powers to act assertively and without referral to its Regulatory Decisions Committee when making some decisions about firms’ authorisations, interventions, and whether to commence civil and criminal proceedings. Firms must be prepared for faster and more robust decision making by the FCA.

Understanding the powers of FCA supervision and proactively managing the relationship

FCA investigations can be long-running and a drain on firms’ resources. Last year, the average duration of the investigation stage of an enforcement action was 30 months, and the resolution/litigation stage lasted an additional 34 months on average. To minimise the impact of FCA enforcement action, it is important to not only effectively manage ongoing enforcement actions, but also to maintain a healthy ongoing relationship with the FCA and try to resolve issues before they result in enforcement action.

Regulatory hot topics

Non-financial misconduct and financial crime remain at the top of the FCA’s regulatory agenda. The FCA recently consulted on proposals that would bring non-financial misconduct committed outside the workplace fully within the scope of FCA conduct rules. FCA Chief Executive, Nikhil Rathi, commented during a parliamentary committee that the FCA is considering collecting information on firms’ use of NDAs in non-financial misconduct cases. The FCA also recently re-emphasised its focus on firms’ financial crime prevention. It noted the importance of firms ensuring that their anti-fraud and anti-financial crime systems and controls are reviewed and updated on a regular basis and indicated that the FCA will be pushing for the creation of a single supervisor for the UK’s anti-money laundering regime.

If you would like to find out more about this topic, please contact events@haysmaicntyre.com to register your interest for our upcoming event with WilmerHale: An interview without coffee (certainly no biscuits) – the FCA’s approach to assertive supervision on 6 June 2024.

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