Thistle’s enforcement support team has extensive experience of helping firms facing the risk, the threat or the reality of FCA enforcement action. We understand the processes inside out and can help you avoid, minimise or mitigate the impact of enforcement action and the additional sanctions it could entail.
The FCA has wide-ranging enforcement powers to use against firms it believes are implicated in financial crime, market abuse, significant breaches of FCA rules or principles, acting unethically, or disregarding consumer interests. These include withdrawing a firm’s authorisation entirely or partly, imposing fines, applying for court injunctions, and bringing criminal prosecutions against individuals or firms.
Whether you’ve already been served with a Section 166 notice or whether you simply want to ensure your marketing strategy doesn’t expose you to the risk of future enforcement actions – our enforcement support team can help.
But, first things first, what is the FCA’s role, and what is it looking out for?
The role of the FCA
Put simply, the FCA exists to protect the rights of UK consumers. It does this in four main ways:
The FCA supervises the activities of around 50,000 financial firms, regularly monitoring, assessing and responding to any conduct or behaviour it believes could threaten the industry’s integrity.
The FCA protects consumers by ensuring firms adhere to its principles, rules and regulations and treat their customers fairly at all times. It expects firms to take measures to protect themselves against financial crime, including fraud and money laundering.
The FCA promotes a particular understanding of what’s required to provide better outcomes for customers. Specifically, it believes well-trained staff, unbiased and appropriate advice, and healthy competition between firms are key here.
As noted above, the FCA has extensive enforcement powers with which to ensure firms comply with its agenda for protecting consumers’ interests. We will look at these in more detail next.
Tools and powers
The tools the FCA has at its disposal fall under four main headings:
The tools available to the regulator to help it identify, assess, and measure risks include meetings with firms’ management, desk-based reviews, the use of skilled persons, and Section 165 information requests
The FCA can track the development of previously identified risks, for example, by reviewing past and current business, monitoring transactions, carrying out on-site inspections etc.
The regulator also has a variety of tools to help it limit or reduce identified risks and prevent them from escalating
Tools the FCA can employ to respond to risks that have already crystallised include varying a firm’s permissions, imposing requirements, and providing guidance.
The FCA’s enforcement powers include:
- The power to ban investment products, subject to a consultation process
- The power to ban investment products that pose a risk to consumers, for a period of up to 12 months, without any consultation, where immediate action is required
- The power to remove misleading financial promotions immediately from the market without the use of any formal enforcement process
- The ability to announce publicly that disciplinary action is being taken against a firm or individual, prior to a decision notice being issued
- The ability to contract directly with skilled persons such as legal or accounting firms where a Section 166 report is required
Application of powers
Circumstances under which the FCA might use these powers include:
- Concern about the effectiveness of a firm’s internal audit department
- A firm’s inability to quantify its current financial position
- Concern about the quality of a firm’s systems and controls
- An indication that financial crime or money laundering is taking place
- A firm’s failure to provide information to the FCA
- The need to develop a remedial action plan
If the FCA intends using its enforcement powers against your firm, we can offer effective enforcement support in all of the following contexts:
- Interviews under caution
- Compulsory FCA interviews
- Voluntary FCA interviews
- Compulsory requests for documents and information
- Responses to information requests
- Searches of your home and/or office
- Restraint orders and the freezing of company or personal assets
- Seizure of computers and other electronic devices
- Hearings before the FCA Regulatory Decisions Committee
- Hearings before the Upper Tribunal
- Negotiated settlements and final notices
- Handling adverse publicity
- Investigations into breaches of the FCA’s principles and rules
- Insider dealing and market abuse
- Perimeter offences (carrying on regulated activities without authorisation or approval)
- Collective Investment Schemes and Unauthorised Collective Investment Schemes
- Systems and controls issues
- The Senior Managers Regime and SM&CR
- Senior Manager applications and the fit and proper test
To find out more about our enforcement support services, please get in touch today. You can reach us by filling out the contact form on this website, by emailing firstname.lastname@example.org, or by calling us now on 0207 436 0630.