The FCA has been quick to say that it is not going soft, in its Annual Report and Accounts for 2016/17. It is easy to see why it feels the need to make that assurance, in that the FCA imposed a total of 15 fines over that period, compared with 34 in 2015/16 and 43 in 2014/15. The FCA explains (with some justification) that this is because the previous two years saw exceptional fines connected with LIBOR or FX misconduct.

Statistics are, of course, highly malleable, and fines do not tell the whole story. There is, however, some evidence in the Enforcement annual performance account that supports the FCA's description of its position, and gives some indication as to its enforcement priorities.

  • There are significantly more enforcement cases open at 31 March 2017 than were open as at 1 April 2016 (414 as opposed to 2471), and there does not seem to be a material reduction in open cases in any area. There are two possible explanations for this: either the FCA is getting slower at resolving cases, or more are coming in.
  • The latter appears to be correct. Average case length is down, although cases going to the Upper Tribunal are taking longer. There has, however, been a marked increase in cases opened during the year (282 compared with 109 in the previous year).
  • The question, then, is where the FCA is targeting this increase in enforcement action. Principally, the answer seems to be:
    • financial crime (56 cases open at the end of the year, as opposed to 20 at the start) – this is consistent with the FCA's indication in its current Business Plan that it would view this as a key area;
    • insider dealing (87 cases open at the end of the year, as opposed to 35 at the start); and
    • unauthorised business (69 cases open at the end of the year, as opposed to 35 at the start).
  • There are also some areas where there are smaller numbers of cases open, but there has been a significant proportional increase compared with the previous year:
    • cases in relation to culture and governance have doubled from six to 12, which is perhaps unsurprising in the context of the FCA's stated interest in this area;
    • listing rules – cases have risen from three to 14; and
    • misleading statements, where cases have again almost doubled, from six to 11.
  • By contrast, areas such as misselling, wholesale conduct and benchmarks have remained almost static.

On this basis, while the FCA may not have imposed as many eye-catching fines over the last year, it seems to be busier in terms of enforcement action as a whole. It remains to be seen whether this will translate into increased numbers of fines.