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Govt plans FCA enforcement shake-up

The Government plans to overhaul the way the FCA handles its enforcement process, including a quicker route to appeal and scrapping some discounts on fines.

The Treasury published its final report on enforcement at the financial regulators yesterday.

It recommends a total of 39 changes to the current enforcement process. These include a “clearly signposted, expedited procedure” for subjects of enforcement action to challenge their case directly at the Upper Tribunal, part of the FCA’s independent appeals process.

Currently firms or individuals have to make their case to the FCA before given the opportunity to go to the Upper Tribunal.

The report recommends that the Regulatory Decisions Committee, the initial stage of the appeals process, should report annually on its perfomance and that the Treasury select committee should consider whether it should have a role in choosing the chair of the RDC before they start.

The Treasury also says the system of offered “graduated discounts” depending on when firms or individuals settle their case may not be effective. The FCA offers a 30 per cent early settlement discount on fines, and then 20 and 10 per cent discounts for later settlements.

The Treasury says the 20 and 10 per cent discounts should be scrapped, as the 30 per cent discount should be enough to encourage subjects to accept wrongdoing at an early stage.

It also wants to see the FCA publish referral criteria which sets out when it is right to take enforcement action, and give examples of cases where a firm’s reaction to a breach of the rules has led to enforcement action not being taken.

Chancellor George Osborne says: “These recommendations will enhance the FCA’s and PRA’s capacity to deal with misconduct or tackle threats to financial stability swiftly, fairly and robustly.”


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There are 2 comments at the moment, we would love to hear your opinion too.

  1. Odd – I had understood that the FCA was entirely independent of government. So what has the treasury got to do with this???

    What??? That’s a smokescreen and just a convenient way to operate so that the failures of the FCA don’t land on politicians??? I don’t believe it!!

  2. Wasn’t the FCA only formed last year, surely they wouldn’t have split the FSA and given the FCA responsibilities without ensuring their processes were effective?

    Who can fine the FCA for their tardiness?

    Mind you, they’d have to raise fees to pay for it……!

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