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What the FCA's Annual Report reveals about enforcement

Posted on 26 September 2023

The FCA has published its Annual Report, looking back on the period 1 April 2022 – 31 March 2023, its first since setting out its three-year strategy in April 2022 and its first since Therese Chambers and Steve Smart took the helm as joint Executive Directors of Enforcement and Market Oversight.

The FCA has made it clear that it wants to operate as an assertive and proactive regulator. The data published relating to its enforcement activities, however, is less definitive. What does seem clear is that 2023/2024 is shaping up to be a crucial year for enforcement.

Key takeaways

  • The FCA has 591 open enforcement investigations relating to 224 cases as at 31 March 2023. Although the total number of open investigations remains similar to previous years, the number of new enforcement cases opened in the period has dropped significantly. It remains to be seen what impact the appointment of Therese Chambers and Steve Smart will have on the approach to new enforcement investigations in the year ahead.
  • Enforcement Watchers will not be too surprised to learn that the average length of an investigation has risen, to 40 months. If an investigation progresses to the Regulatory Decisions Committee (RDC) or Upper Tribunal, the average length increases to 64 months. Increasing criticisms have been made of the FCA in this regard and it will be interesting to see if the increase in enforcement resources will be enough to reduce the lifespan of an investigation.
  • The trend continues, with the RDC taking on average 15.4 months to complete an EMO Panel Case (up from 10.6 months last year). It made 39 decisions during this year, compared to 132 in the previous year (largely explained by the narrowing of the RDC's remit in November 2021). EMO Panel Cases continued to constitute the bulk of the RDC's caseload in terms of hours worked. The RDC considers the increase in case duration to be a one-off, in part caused by the conclusion of "several complex legacy matters", although the RDC is also predicting a busy year ahead as it expects to receive "some large, complex enforcement cases".
  • Perhaps to achieve faster outcomes, and in line with its aim of becoming an increasingly proactive regulator, there has been a steady increase in the FCA's use of Own Initiative Requirements. This year, it opened 51 cases where it considered the use of these powers, compared to 35 in 2021/2022, and just 18 in 2019/2020 and 2020/2021.
  • In 2022/2023, 47 Skilled Person Reports were commissioned, a slight increase from the previous year, when 38 were commissioned. These Reports are sometimes the precursor to enforcement investigations down the track and provide insight into the FCA's priorities. In 2022/2023, the reviews examined several issues, including controls and risk management frameworks, financial crime and corporate governance (including culture).


Our expectation is that the new directors of enforcement will seek to reduce the number of open cases in enforcement, many of which have been open for several years. We anticipate that this will involve opening fewer cases and perhaps closing those with no further action - those stale cases that have been open for some time with little progress.

We expect the FCA to continue to increase the use of supervisory powers through the imposition of requirements. Our experience is that the FCA has become increasingly aggressive in the use of these tools and the removal of the RDC from decision-making means that a number of these cases are likely to be appealed to the Upper Tribunal.

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