The U.K.’s Financial Conduct Authority (FCA) and the Prudential Regulation Authority published final changes to their policies on Wednesday that aim to strengthen the transparency and effectiveness of their enforcement processes, particularly for firms and individuals that find themselves under investigation.
The changes will mean that the targets of regulatory investigations will receive more information about why they are under investigation; they will also receive regular updates from the regulators throughout an investigation. The regulators are also changing how decisions about whether to refer an issue to enforcement are made.
In addition, the FCA is introducing a new process for partly contested cases that will allow a person who is under investigation to agree to certain elements of a case (including facts, liability, and penalties) and to contest the other elements of the case. Under this process, respondents will still have the ability to obtain a discount on their penalty for co-operation to reflect the extent that issues have been agreed.
The FCA is also adopting a new mechanism for those under investigation to proceed more directly and quickly to the Upper Tribunal, which can review FCA enforcement decisions, and provides independent, external adjudication.
“It’s essential that our enforcement decision-making processes command public confidence and operate both efficiently and fairly,” says Mark Steward, director of enforcement and market oversight with the FCA, in a statement. “The changes set out in today’s [policy statement] are designed to achieve just that and reflect the views of stakeholders who responded to our consultation.”