Insights Provided by Norton Rose Fulbright on the FCA Enforcement Manual
In a recent development, Katie Stephen, partner and London Co-Head of the Contentious Financial Services Group at Norton Rose Fulbright, has shared her insights on the Financial Conduct Authority's (FCA) new Enforcement Guide. The guide aims to clarify the FCA's approach to investigations and enforcement proceedings, reflecting updated regulatory expectations and processes.
Stephen underscores the importance for firms to maintain robust control environments, effective governance, and proactive risk management cultures, particularly in fast-moving areas like financial crime, market abuse, anti-money laundering, and sanctions enforcement. She highlights the growing sophistication of investigative techniques and the increasing regulatory scrutiny firms face, emphasizing the necessity for companies to proactively manage potential reportable issues from their emergence through to enforcement and remediation stages.
Recent cases, such as those involving spoofing by bond traders, underscore the FCA's rigorous stance on misconduct and the significant consequences for individuals and firms, including fines and prohibitions. The Upper Tribunal’s rulings also demonstrate judicial engagement with enforcement outcomes, including potential adjustments to penalties.
Stephen's commentary advocates for a holistic approach, combining contentious and advisory legal technical specialists with risk and compliance professionals, to provide comprehensive support throughout the FCA’s enforcement lifecycle. This approach, she believes, is best practice for regulated firms.
In addition to the Enforcement Guide, Stephen has also commented on the FCA's new expectations on bullying, harassment, and violence. She emphasizes the need for senior managers to identify lessons learned and actions needed in their areas of the business to avoid aggravating factors in future.
Meanwhile, the FCA is speeding up the process and making inroads into the backlog of historic cases. The regulator may stretch investigation announcements to "exceptional circumstances." However, the FCA now has fewer open investigations, making it less likely for firms to be investigated but more likely to face outcomes if they are.
In other news, Norton Rose Fulbright launched the Insurathon 2020 to support innovative companies in the insurance sector. The competition aims to identify and support the most innovative tech start-ups and scale-ups within the industry. The winner of the eighth annual Insurathon, OpenCover, operates at the intersection of blockchain security and insurance. Founded by unspecified individuals, OpenCover was announced as the winner by the global law firm.
Paul Griffin, another partner at Norton Rose Fulbright, also offers comments on the FCA's announcement. He notes that anonymous details about investigations could help firms avoid pitfalls, but must not reveal the subjects' identities.
In conclusion, Katie Stephen’s commentary on the FCA’s Enforcement Guide stresses the evolving regulatory environment requiring firms to ensure thorough compliance, timely and transparent engagement with regulators, and readiness for investigations. The guide aids in understanding FCA expectations, but Stephen cautions that enforcement remains a demanding area where legal, compliance, and risk functions must work closely together.
- Katie Stephen, in her commentary on the FCA's Enforcement Guide, advises regulated firms to adopt a holistic approach that combines legal, compliance, and risk functions to provide comprehensive support throughout the FCA’s enforcement lifecycle.
- Norton Rose Fulbright has launched the Insurathon 2020 to support innovative companies in the insurance sector, aiming to identify and support the most innovative tech start-ups and scale-ups within the industry.
- Paul Griffin, another partner at Norton Rose Fulbright, discusses the FCA's announcement, suggesting that while anonymous details about investigations could help firms avoid pitfalls, they must not reveal the subjects' identities to maintain privacy and confidentiality.
