Mark Steward, the FCA’s Director of Enforcement and Market Oversight, delivered a speech at the Thomson Reuters Annual Compliance & Risk Summit on 26 April 2016. In the speech, Mr Steward highlighted the FCA’s objectives for the next 12 months. These include (among other things) firm culture and governance, advice, treatment of existing customers and innovation and technology.
Mr Steward confirmed that central to improving firm culture and governance is the Senior Managers and Certification Regime (SMCR), which commenced on 7 March 2016, as well as the wider conduct requirement of skill, care and diligence. Mr Steward confirmed that the FCA will not take a punctilious approach to the new SMCR, but will rather focus on real fault elements and real culpability.
Mr Steward also commented on the FCA’s consultation paper published in response to HM Treasury’s review on enforcement decision making. In its consultation, the FCA proposes that firms and individuals who are involved in FCA enforcement cases and do not dispute their liability but disagree with the penalty imposed by the FCA, will be able to seek a hearing before independent FCA decision makers, without losing any credit for cooperation they might have otherwise gained if they accepted the penalty. Mr Steward confirmed that the FCA are looking at variations of this proposal, where most but not all of the facts have been agreed by the firm or individual, resulting in a considerable narrowing of the dispute.
Mr Steward concluded his speech by emphasising that by detecting and addressing an issue at an early stage, the need for FCA investigation and enforcement should reduce.