The findings show the FCA opened 100 cases in the last financial year and closed 107 cases. The UK watchdog recorded fewer cases than in FY2021 when it opened 190 cases and closed 159.
In addition, raids launched by the FCA rose from two during FY2020 to six in the following two years. During FY2022, there was an uptick in raids in the final quarter, with four conducted between January and March 2023.
Go deeper with GlobalData
Overall, the largest proportion of cases opened against firms was for unauthorised collective investment schemes. According to the data gathered by Reed Smith, FCA opened 13 cases across three years.
On the other hand, the largest number of closed cases happened due to money laundering controls, followed by pensions advice, with 27 and 15 cases closed in total, respectively.
Commenting on the findings, Reed Smith Partner Romin Dabir said: “It is difficult to determine exactly why enforcement activity is falling, though it is possible that it is related to a backlog of issues created by the Covid-19 pandemic.
“It could also be that the drop in cases opened has occurred because the FCA has devoted resources to closing cases it has already opened”, Dabir added. “The relative decline in enforcement activity may also reflect the government’s current objective to increase the competitiveness of the City of London. It is possible that the FCA may be adopting a lighter regulatory touch on certain issues than in previous years.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataFCA: Fighting crypto
Reed Smith’s findings come shortly after, in June, FCA introduced new rules meant to crack down on crypto ads. Firms promoting crypto will have to offer new buyers a ‘cooling-off’ period, while consumers must be warned ‘if something goes wrong’ and that they should be prepared to ‘lose all the money they invest’.
Laura-May Scott, counsel at Reed Smith, added: What appears to be a lack of enforcement activity may also be a reflection of the FCA making greater use of its intervention powers – that could well be one of the reasons that explain why the FCA appears to have been less active in recent years.
“Insider trading is always a major focus for the FCA and, due to improvements in technology, it is easier for the FCA to monitor for suspicious activity”, Scott noted. “It is no great surprise to see that opportunistic insider trading accounted for the majority of investigations opened and closed against individuals.”
