The FCA plans to streamline its approach to enforcement and publicise investigations at an early stage.

By Andrea Monks, Rob Moulton, Nell Perks, Anna James, and Charlotte Collins

On 27 February 2024, the FCA published a Consultation Paper (CP24/2) on its proposed new approach to publicising enforcement investigations and changes to the FCA Enforcement Guide (EG). The FCA also published a related speech given by Therese Chambers, joint Executive Director of Enforcement and Market Oversight. In summary, the FCA hopes to deliver “impactful deterrence” by:

  • Focusing its efforts and resources on a “streamlined portfolio” of enforcement cases
  • Publicly announcing enforcement investigations at an early stage, including naming the firm(s) involved
  • Simplifying EG to make it more accessible, relevant, and easier to navigate

Both the Consultation Paper and the speech clarify the FCA’s approach to enforcement under Therese Chambers and Steve Smart, who took up their roles in April and June 2023 respectively, but have yet to really define their strategy (as previous heads of Enforcement have done).

The FCA requests responses by 30 April 2024, although it does not provide a timeframe for publishing final guidance. However, firms should note that the FCA plans to apply its new approach to publicising investigations from the date the new EG takes effect, including in relation to ongoing investigations.

While most firms will welcome a more focused and rationalised approach to enforcement, many are likely to have serious concerns about the FCA publicising investigations at such an early stage. Further, the proposal to publicly announce investigations that are ongoing but which pre-date the changes is extremely hard to justify. Firms and their legal teams will have approached those investigations with the legitimate expectation of no publication prior to the conclusion of the investigation, and a retrospective change to that position would be controversial. As such, we anticipate a strong response to the Consultation Paper.

A More Streamlined Approach

In her speech, Therese Chambers explains that “We want to increase transparency around this [enforcement] work, quicken our pace and strengthen our focus”. In contrast to the FCA’s previous approach, the regulator plans to focus on a streamlined portfolio of cases in which it can deliver the greatest impact. Moreover, the FCA intends to close cases more quickly when no outcome is achievable. This new strategy will be welcome, as the FCA has faced well-publicised issues with opening a large number of cases despite a high staff turnover. Indeed, the FCA has received criticism for the length of time it takes for enforcement cases to reach their conclusion (FCA statistics for cases closed in 2022/23 showed an average of 41 months for the investigation stage, plus 23 months for the resolution or litigation stage). The FCA rightly observes that the delay does not help with deterrence as enforcement outcomes are often published so long after misconduct occurs that any lessons for the industry are less pertinent.

Therese Chambers suggests that the FCA’s key enforcement priorities will remain market abuse, fraud, and financial crime. She also emphasises that the FCA’s approach will become more data- and technology-driven, which should help the regulator to uncover and investigate misconduct more effectively. The FCA will also try to ease the burden on the Enforcement Division by proactively dealing with the root causes of misconduct. For example, by continuing a stricter approach to authorisations and approvals to prevent issues before they arise, utilising powers such as business restrictions, and removing firms’ unused regulatory permissions.

Announcing Investigations

The FCA’s key proposal is to publicly announce and provide updates on enforcement investigations; the details of which would be outlined in Chapter 4.1 of the revised EG. Notably, this is not a proposed rule change but simply a change to the FCA’s approach, as the FCA already has the power to make such announcements (subject to other legal considerations). The FCA considers that this increased transparency would build public trust and confidence, send clear messages to the market and act as a deterrent, and support the accountability of the FCA. The last of these outcomes is particularly important at a time when the regulator is coming under ever-increasing scrutiny from Parliament and consumer groups.

When would the FCA make such announcements?

The FCA would decide on a case-by-case basis whether to announce an investigation based on a public interest test, indicating that an announcement would usually be in the public interest if it is likely to:

  • enable the interests of potentially affected customers, or consumers or investors more generally, to be protected;
  • help the FCA’s investigation, for example by encouraging potential witnesses or whistleblowers to come forward;
  • address public concern or speculation, including by correcting information already in the public domain;
  • provide reassurance that the FCA is taking appropriate action;
  • deter future breaches of FCA rules or other requirements;
  • otherwise advance the FCA’s statutory objectives.

Conversely, the FCA may consider an announcement inappropriate if it is likely to have an adverse impact on:

  • the conduct of the FCA’s investigation or an investigation by another regulatory body or law enforcement agency;
  • the interests of consumers;
  • the stability of the UK financial system or the FCA’s ability to otherwise carry out its statutory functions.

What would such announcements contain?

The FCA explains that an announcement would typically contain:

  • the identity of the subject of the investigation;
  • the industry sector and regulatory or legal provisions to which the investigation relates;
  • a summary of the suspected breach, failing, or other misconduct under investigation;
  • a statement that the opening of the investigation should not be taken to imply that the FCA has reached any conclusion that any regulatory or legal provision has been breached, or otherwise made a finding of misconduct or other failing or determined the appropriate resulting enforcement action to be taken.

The FCA explains that this approach is aimed at firms — investigations into individuals would be different and would not usually be announced.

How much notice would a firm be given?

The FCA states that it would give the subject “appropriate advance notice”. However, the regulator goes on to state that “normally we will give the subject no more than 1 business day’s notice”, implying there will be no negotiation, or very limited negotiation, about the wording of the announcement. This window seems unnecessarily short and is likely to be a focus of any lobbying efforts. The FCA also contemplates that it may not provide any notice if it considers there is an urgent need to announce or provide an update on an investigation. This will raise concerns for firms that are listed or those subject to other disclosure obligations. The FCA’s only concession is that if an announcement or update is potentially market-sensitive, it will generally inform the subject of the announcement after markets close, then publish the announcement on its website at 7 a.m. and via an FCA-approved primary information provider.

What happens if the investigation is subsequently closed?

If the FCA closes the investigation without regulatory, civil, or criminal action, it would publish an announcement to that effect and/or amend the original announcement on its website. Firms would no doubt prefer an announcement in such circumstances as an amendment to the original announcement might not be very visible. The FCA has not offered a timeframe for such “cleansing” announcements, but firms will be concerned that such announcements are issued as soon as possible after the investigation is closed.


At present, the FCA rarely publishes information about the progress of open investigations, unless and until they result in actual or proposed outcomes such as censures or penalties. Over the years, the rules have changed: the FCA was previously permitted only to publish Final Notices, then Decision Notices, and, finally, information about Warning Notices (essentially providing a summary of the FCA’s allegations and naming the firm involved).

There was much consternation when the FCA was permitted to publish information about Warning Notices, as a Warning Notice is given before the subject has had the opportunity to make full representations. However, this has not greatly increased transparency and deterrence as few summaries of Warning Notices naming firms have been published. This is because the FCA is unlikely to publish this information when the Final Notice will follow shortly after, which is often the case with firms as many choose to settle their enforcement cases. Given the reaction to the FCA’s powers to publish information about Warning Notices, the proposed new approach to announcing investigations will likely cause even more concern. Firms have 14 days to make representations if they wish to challenge the FCA’s decision to publish information about a Warning Notice, and so firms may be alarmed by the FCA’s proposals to issue announcements with little notice.

While some firms may welcome the additional transparency, many will be concerned about the potential reputational impact of such announcements. It is also not clear when the FCA would provide an update on an investigation and there is likely to be a tension between the public interest test and the firm’s interest in the market being updated if, for example, the scope of the investigation were to be significantly reduced following initial investigatory work. Ideally, the FCA would commit to regular updates, as cases will still last years rather than months even if the typical length of enforcement cases decreases, leaving a long period of uncertainty. This commitment would help the FCA to increase transparency and hold itself to account. Ultimately, announcing investigations may place additional pressure on firms to settle cases early.

Enforcement Guide

The FCA has also conducted a full review of EG, and intends to significantly streamline this guidance to create a more useful and focused document. EG provides information on key aspects of the FCA’s enforcement policy when such information is not available elsewhere, and covers how the FCA conducts a typical enforcement investigation.

In order to keep EG more focused, the FCA is moving certain information about its broader strategic approach to enforcement to the website so that such information is more easily accessible. The regulator is also deleting duplicative and out-of-date content.

While the Consultation Paper contains an entirely new version of EG rather than a redline, some of the content has been maintained. Key changes include:

  • The FCA has indicated that it may refuse the attendance of a particular legal advisor when interviewing a person, if the advisor’s attendance may reasonably be assessed as potentially prejudicing the investigation or any other ongoing investigation
  • The FCA has clarified the basis on which it will accept reports provided on a limited waiver basis, unhelpfully stating “The FCA will accept reports over which legal privilege is asserted without agreeing the fact or extent to which it is legally privileged”
  • The FCA has clarified that decisions to apply to the court to commence civil proceedings will be made by an Executive Director or a Director in Enforcement
  • The FCA has deleted the content on private warnings, as the FCA considers that it should not use private warnings as an enforcement tool in circumstances where it cannot be more publicly transparent about the issues concerned

The first two points are likely to prove particularly controversial. EG also now states that the FCA will not consult on future changes to its text unless consultation is required by statute or the FCA considers it necessary. Therefore, it appears the FCA is ruling out future consultations on further changes.