On 12 February, Mark Steward, Executive Director of Enforcement and Market Oversight made a speech at an event on Investigations and Enforcement: A Guide to Managing Regulatory Action.
Key takeaways from the speech include:-
- The point of financial penalties is deterrence but this is not the point of enforcement which is about just outcomes. In 2019 the FCA imposed financial penalties of over £310 million on firms that also paid or are paying over £231 million in restitution. Addressing both serious misconduct as well as its consequences ensures just outcomes.
- The FCA will evaluate firms’ behaviours when things do go wrong, as well as looking at systems and controls to detect wrong at the earliest opportunity.
- The FCA may reduce sanctions or give credit for proactive, quick, co-operative behaviour and thorough remediations, especially consumer redress. However, it could imposer tougher sanctions where firms do not make good consumer losses and correct deficiencies.
- Most of the cases involving financial penalties have involved serious breaches of the General Principles. In these cases, there was no evidence that the Principles had been used to test or measure conduct, to measure systems and controls that were being put in place or to identify or address the inadequacies of the misconduct that occurred.
- Firms need to be fully engaged with the General Principles.