Matt Cowie of Rahman Ravelli considers the challenges facing the Financial Conduct Authority
The Financial Conduct Authority (FCA) has made it clear it is looking to quicken the pace of its supervisory and enforcement investigations.
The FCA's joint executive director of enforcement and market oversight, Steve Smart, stated at the Financial Services Investigations and Enforcement Summit in London that the authority is also focused on ensuring its enforcement, supervision and authorisations units are working together more seamlessly.
Part of Smart's attempt to achieve this goal of smoother, speedier working will involve resources being targeted, as well as streamlined investigations aligned to the FCA's strategic priorities.
With economic crime accounting for approximately 40% of all UK crime, the scale of the challenge facing the FCA's stated approach cannot be overestimated. The FCA's track record has been steady and single-minded. The FCA's enforcement brief has broadened but the "effective deterrent'' enforcement approach has brought success. Furthermore, the FCA's emphasis on preventative action has protected consumers and raised wholesale business compliance standards, while its work with law enforcement agencies and other regulators has brought results in terms of convictions for insider dealing and money laundering.
The size of the FCA's task, however, should not be underestimated. Smart has said that 2023 saw the FCA receive more than seven billion transaction reports from 1,300 financial firms. This data is of vital importance for the FCA as it looks to enforce rules and combat market abuse. The FCA, it appears, is fully aware of the workload it faces. Smart's comments come as the FCA enters the last year of its enforcement strategy for 2022-25.
The FCA will continue to bear down on investment fraud and push-payment scams as well as reduce money laundering by regulated firms or enablers and improve the supervisory effectiveness of professional oversight bodies.
The FCA's 2024-25 Business Plan refers to both the government's Economic Crime Plan 2 (2023-2026) and its Fraud Strategy; each of which emphasised the then government's commitment to combating fraud in the UK. It is perhaps notable that the Plan involves a bigger budget of £755 million. This reflects an Annual Funding Requirement increase of 10.7%- an increase on the 2023-24 rise of 8.5%.
The FCA has made it clear what its priorities are and the standards it is setting itself. The strong message from the top of the FCA is that it is striving to achieve a clear uptick in results in the next 12 months
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