Having published its business plan for 2018-19, the Financial Conduct Authority is sending out a strong message. But the true strength of that message will only be known if and when the FCA meets the targets that it has set itself – because there is little doubt that it has set itself a challenging course.
As was probably expected, the FCA has recognised that Brexit will present challenges. In acknowledging this, the FCA has stated that it will be putting aside 5 to 6% of its resources to help prepare for Brexit. This will inevitably mean that certain projects which may have been on the drawing board will probably stay there; for the time being, at least.
But the FCA's conclusion that Brexit preparation only requires around one twentieth of its resources sends out a clear sign. The FCA does not see Brexit as being an issue that could or should interfere with the workload that is its priority; namely ensuring that the financial markets function in an open and honest manner. As a result, there would appear to be no let-up when it comes to detecting and prosecuting those who are thought to be trying to abuse the markets. And if the number of investigations is unlikely to drop (at least by much) then those who feel they are (or may come) under suspicion need to ensure that they have the access to appropriate legal representation.
While it would have been wrong for any observers - or anyone looking to perpetrate financial crime - to jump to any conclusions about the FCA taking its eye off the ball while tracking the implications of Brexit, the FCA's business plan comes as a sharp statement of intent. And the intention appears to be that its business as usual.
The FCA still holds the culture and governance of firms as a priority. It is still going all out to combat financial crime, in all its many guises; whether it be any form of investment fraud, money laundering or the new kid on the block, cryptocurrency abuse.
As a business plan, it is no vast departure from those of previous years. But despite the resources that need to be channelled to Brexit, this is a plan for the year that shows that the FCA remains steadfast to its core aims and values. It remains to be seen how it juggles this with the demands that Brexit may pose. It also remains to be seen just how realistic the amount of resources it has allocated to Brexit turns out to be.
But for now, we have to take the FCA at its word. There will be no walking away from its core activities to manage Brexit. So anyone working in the financial markets would be making a huge mistake if they believed they were able to bend or subvert the rules of the game simply because the referee has also got to spend some time watching another encounter unfold. Anybody coming under investigation now by the FCA will have as great a need of specialist legal expertise as they would ever have done in previous years.
The coming months may indicate a willingness by the FCA to conclude investigations in circumstances where remedial action is a viable alternative to prosecution. But anyone who is the subject of such an investigation will still require astute legal representation in order to convince the FCA that a prosecution is not in anyone's interest.
Brexit may yet pose a number of challenges for the FCA. Challenges that it will have to meet. Time will tell if its allocation of resources to this issue has been judged wisely. But, for the time being at least, the FCA is simply getting on with its traditional workload. And anyone who may be the subject of that workload needs to ensure that their legal house is in order.
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