The FCA has published its annual enforcement and performance report 2017/18 which provides an insight into the FCA’s enforcement activities during 2017/18.
The highest numbers of open enforcement cases (as at the end of March 2018) appeared under the following categories:
- Financial crime (86)
- Retail conduct (78)
- Unauthorised business (77)
- Insider dealing (75)
- Culture / governance (61)
In addition, the FCA recorded 28 open enforcement cases for market manipulation and 12 for misleading statements.
The FCA received 1,064 requests from over 80 different regulatory and law enforcement authorities in 63 jurisdictions during the reporting period, up from 998 in 2016/17. (The FCA has not disclosed the type of information that is predominantly requested under these mutual assistance arrangements.)
In keeping with our experience in dealing with the regulator in the last 12 months, the average case length for regulatory and civil cases has generally increased. For example, the average length of cases concluded as a result of settlement in 2017/18 was 32.3 months, up from 23.2 months in 2016/17 and 25.2 months in 2015/16.
It is not surprising then that the feedback from those subject to FCA investigations included comments about: the proportionality of investigations; the rigour applied by the FCA in analysing issues before deciding to proceed with an investigation; and the quality of information provided by the FCA at the start of the investigation.
In addition, the feedback suggested that communication could be improved in cases where the regulator ultimately decided to take no further action. In fact, in the reporting period, the average length of cases including no further action decreased slightly: from 17.6 months in 2016/17 to 19.1 months in 2017/18.
It will come as no surprise that the feedback also highlighted the significant financial impact of investigations, for example in complying with information requirements. However, the FCA observed, in turn, that the experience of an investigation had some positive effects, such as providing useful lessons and increasing staff awareness and performance.
To the extent it provides reassurance, the FCA concluded that it has “considered the key themes that were raised and [we] are working to implement the lessons we have learned."