In Regulatory Wrap for the week to April 26, Jennie Clarke reviews the FCA’s proposed enforcement approach to identify firms under investigation from the outset.
In this Regulatory Wrap, we analyze the Financial Conduct of Authority’s (FCA) plans to name firms it is investigating to deter noncompliance, which has sparked debate within the industry and prompted inquiry from other governing bodies.
1. The industry response to this approach has been unfavorable, as there is concern that even if firms that are named are later found blameless, there could be lasting reputational or financial damage
2. This concern is amplified by the fact that about 65% of FCA cases close without action
3. In consideration of the FCA’s goal to promote competition, there are suggestions that this proposed regulatory approach could push firms abroad
4. To mitigate industry scrutiny, the FCA stated that regulators like the Office of Communications (Ofcom) and the Competitions and Market Authority (CMA) have utilized a similar approach
5. Most recently, the House of Lords Financial Services Regulation Committee requested that the FCA pause these proposals to seek further evidence
This Regulatory Wrap is brought to you by Global Relay’s Head of Content, Jennifer Clarke.
In response to financial regulators push for increased transparency to deter noncompliance, firms should consider the benefit of employing surveillance tools that assist in communications monitoring.
