A View From The Exchange: Back to school and Back To The Future for the FCA?

Whilst many of you may have spent your summer reading Richard and Judy's Book Club bestsellers, in Doc Brown fashion, we spent ours building a time machine and looking back at old FSA speeches. One has particularly caught our attention: the then-CEO, John Tiner's speech of 6 September 2004, published 20 years ago last Friday. 

Over recent months we've seen the FCA grappling with several of the same issues called out in Tiner's speech - case selection, senior management responsibilities, publicity, and efficient and fair investigations. So, in this first week of September, not only are we going back to school and work, with thanks to the FCA, we are also going Back to the Future. 

We're going to focus on two of our favourite issues covered in the speech - efficient investigations and publicity.

Efficient investigations 

It is ironic that, in 2004, Tiner talks about aiming to reduce the average investigation time, which then stood at only 11 months, compared to the average of 43 months to close an investigation in 2023/24. 

As part of the new approach to enforcement, the FCA has emphasised that it wants to focus its resources on a streamlined caseload. Based on yesterday's Annual Report it appears this streamlining exercise (in terms of reducing case numbers) is underway. The FCA's data shows that the number of open enforcement cases dropped from 591 to 500 (up to the end of March 2024). This relatively small reduction in cases has left us wondering what other measures will need to be taken by the FCA to drive down the average case time to achieve the desired "impactful deterrence".

Publicity

It seems that the FCA's "naming and shaming" proposals have also been on the regulator's agenda for the last 20 years.

The Financial Services Regulation Committee has reopened its call for evidence on CP24/2 and the new deadline for submissions is now 11 October. Whilst we await the outcome on this inquiry, we would encourage Chambers and Smart to revisit the key questions and considerations that Tiner noted back in 2004 - balancing the "general preference for greater transparency" against ensuring it is done "in a way which does not affect market confidence and does not unfairly damage firms or individuals". 

"Roads? Where we're going, we don't need roads"

20 years on and the FCA is still trying to navigate its path toward achieving deterrence whilst at the same time remaining fair to individuals, firms, and to the markets. 

The Annual Report has warned us to expect some "notable" enforcement cases over the next 12 months. Whilst we await these cases and the FCA's chosen direction on the issues above, we hope that wherever they are going, they won't need roads.

Author: Laura Bell