- Enforcement Trends for 2020: Interview with Sara Cody
- What do you see as the key focus for FCA Enforcement in 2020?
- How will the FCA’s scrutiny of firm culture be translated into enforcement?
- Promoting a speak-up, listen-up culture with suitable arrangements for whistleblowers is very much at the forefront of FCA expectations. In 2018, we saw the FCA and PRA together fine James Staley in relation to his response to a whistleblower. Was this the first of more to come?
- The SM&CR was recently extended to solo-regulated firms and has bedded in to both the banking and insurance industries, are you seeing/ do you expect there to be a significant increase in enforcement against senior managers?
- Last year, the Treasury conducted a review of IT failures in the financial sector, calling on the regulators to use their enforcement tools to hold individuals and firms to account and questioning whether the SMR was in fact, an ‘ineffective regime’ to support Enforcement. With increased scrutiny of Enforcement’s approach, can we anticipate Enforcement will be keenly focused on senior manager accountability for IT failures?
- Will financial crime - AML/CTF and market abuse remain a priority?
- And a focus on vulnerable customers/ mortgage prisoners?
- Turning to practicalities, does FCA Enforcement really have sufficient resource to tackle their priorities? Under Mark Steward’s approach to view investigations as a ‘diagnostic tool’, there has been a notable increase in the number of investigations opened by Enforcement in recent years, however, many of these are dropped early on. With FCA resources under significant pressure at the moment do you anticipate this trend will continue? Do you anticipate the length of investigations increasing?
- The FCA emphasises the importance of pro-active cooperation in investigations. In your view, what is involved in achieving this?
- Information on the FCA’s Penalty Review and its full review of the FCA Handbook Enforcement Guide, both of which were promised last year, remain outstanding. Do you anticipate them any time soon?
- Any other observations?
Financial Services analysis: Sara Cody, Counsel PSL in the Financial Regulation Group at Linklaters, and a consulting editor of LexisPSL Financial Services, outlines the priorities for FCA Enforcement in the year ahead, considers the impact of the Senior Managers & Certification Regime (SM&CR) and discusses trends in FCA investigations.
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