Readers will recall that we reported last year on the FCA's articulation of its Mission " The FCA Sets Out its Mission" and the publication of a joint FCA and PRA statement on their approach to Enforcement " FCA and PRA Publish Joint Statement on Enforcement". In a similar vein, on 21 March 2018, the FCA published this year's Enforcement Mission. Whilst there is very little material in the document that will be new or surprising for practitioners, there are some interesting statements of policy and aspiration.
The FCA says that its overriding approach to Enforcement is to achieve a fair and just outcome in response to misconduct. In a step away from "credible deterrence", the FCA notes that severe penalties (whilst important to deliver the FCA's message) are not alone enough to reduce and prevent misconduct and must be combined with effective early detection and efficient investigations.
On the early detection of harm, the FCA says its focus is on gathering information and intelligence in order to identify potential/actual misconduct as soon as possible. This is achieved through a variety of information channels, both internal (Market Oversight, Supervision and Authorisations) and external (other regulators, authorities and whistleblowers). In this context, a separate paper has also been published by the FCA outlining its approach to Supervision, which is said to be forward looking, pre-emptive and to focus on strategy and culture as the root cause of major failings.
The FCA says that it will start an investigation where it suspects serious misconduct, although it reiterates that the purpose of the investigation is to get a full understanding of whether in fact such misconduct has occurred. Whilst it lists out some of the criteria feeding into the assessment of suspected serious misconduct, much will already be familiar to practitioners from the Enforcement Guide and referral criteria.
On the conduct of investigations...