UK Financial Watchdog ‘Tougher than Predecessor’
UK watchdog the Financial Conduct Authority (FCA), which came into being on 1 April 2013, has demonstrated a far more proactive and hard-line approach to regulatory enforcement in comparison to its predecessor the Financial Services Authority (FSA), research by Wolters Kluwer Financial Services suggests.
The group’s Compliance Resource Network (CRN) reports that in its first year of existence the FCA has issued financial penalties amounting to a record breaking £409m, the majority for breaches of principles. Three were in respect of management and control; six for customers’ interests and seven for communications with clients, with 13 financial penalties issued for mis-selling and or misleading provision of information and eight for market abuse.
The group has evaluated the new regulator’s effect on compliance culture in the UK market over the past 12 months by highlighting six key lessons learned:
CRN research on the FCA’s also reveals the following statistics:
“The £409m of fines issued by the FCA is a truly staggering figure in such a short space of time and the fact the same principles are continuously breached suggests that firms are not adapting to the change in initiative exemplified by the workings of the new regulator”, said Mary Stevens, manager regulatory analysis Europe at Wolters Kluwer Financial Services.
“If the industry is to avoid making the same mistakes, firms must place the highest priority on developing a clearer understanding of what the FCA requires of them and monitor existing and new products and services on an ongoing basis.”