Law360, London: The Financial Conduct Authority (FCA) has said it has improved its process for disclosing evidence to individuals and companies under investigation in regulatory enforcement cases, a move designed to cut the risk of omitting necessary documents.

Law360, London: The Financial Conduct Authority (FCA) said on 27 November 2024 that it has updated its internal whistleblowing policy in the wake of complaints from employees that it has failed to properly act on intelligence provided by informers.

The Financial Conduct Authority (FCA) has published its proposed summary grounds of intervention in support of its application to intervene in the appeals to the Supreme Court in Hopcraft v Close Brothers Ltd, Johnson v Firstrand Bank Ltd and Wrench v Firstrand Bank Ltd, concerning the duties owed by car dealers and third-party lenders in relation to motor finance. The cases are due to be heard by the Supreme Court at the start of April 2025. The FCA sets out its interest in the appeals and the proposed ambit of its submissions.

Financial Services analysis: In High Court proceedings brought by the Financial Conduct Authority (FCA) arising from its own investigations into WealthTek LLP and Mr John Dance (into suspected regulatory and criminal breaches concerning client money and custody of assets), the court granted the FCA’s application for a time limited stay of the civil proceedings, in order for it to focus its resource on investigating the suspected criminal offences, in circumstances where a criminal restraint order had been obtained by the FCA. Written by Dan Hudson and Kevin Kilgour, partners at Seladore Legal.

Law360, London: Ediphy has alleged that the Financial Conduct Authority (FCA) carried out a 'fatally flawed and unfair' procurement process for a prestigious contract worth an estimated £29.5m to provide bond consolidated tape.

Background to FCA suitability requirements This Practice Note looks at the suitability rules of the Financial Conduct Authority (FCA). For specific guidance on establishing the risk a customer is willing and able to take and making a suitable investment selection, see Practice Note: Establishing risk and suitable investment selections. The conduct of business rules in relation to investment business can be found in the FCA Handbook in the Conduct of Business sourcebook (COBS). In 2006, the FCA's predecessor, the Financial Services Authority (FSA) reformed COBS to implement the Markets in Financial Instruments Directive (Directive 2004/39/EC) (MiFID). MiFID has been replaced by the recast Markets in Financial Instruments Directive (Directive 2014/65/EU) (MiFID II Directive) and the Markets in Financial Instruments Regulation (Regulation (EU) 600/2014) (MiFIR) (together with the MiFID II framework). Both the MiFID II Directive and MiFIR entered into force on 2 July 2014. As amended, the majority of the MiFID II framework has applied since 3 January 2018, and EU Member States had until 3 July 2017 to transpose the provisions of MiFID II into national law.

This Practice Note outlines the Financial Conduct Authority’s (FCA) priority areas of focus in supervising and enforcing compliance with the UK’s anti-money laundering (AML), counter-terrorist financing (CTF) and counter-proliferation financing (CPF) legal and regulatory framework for financial services. It is relevant to firms authorised under the Financial Services and Markets Act 2000 (FSMA 2000), payment and e-money firms, and cryptoasset businesses (such as exchanges and custodian wallets) and Annex 1 financial institutions that are required to register with the FCA under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, SI 2017/692 (MLRs). In relation to AML/CTF/CPF, it addresses: • the role of the FCA • priority areas of FCA supervisory focus, including CDD processes and controls and de-risking • priority sectors for FCA supervision, including cryptoassets, Annex 1 financial institutions, payment and e-money firms and challenger banks • how the FCA supervises and enforces compliance, including its supervisory tools, data-led supervisory approach, interventions and enforcement powers, and key metrics on FCA AML/CTF activity For

This Practice Note examines the Financial Conduct Authority (FCA)’s expectations around culture in financial services firms, and the use of regulatory tools such as the Senior Managers & Certification Regime (SM&CR) and the Consumer Duty to shape FCA supervision and enforcement around firms’ cultural frameworks. Although as the conduct regulator, the FCA is the heavyweight of the two regulators in this area, the Prudential Regulation Authority (PRA) is also focused on how culture impacts prudential risks and this is discussed below. Key points addressed include: • the regulators’ view that culture is a key driver of conduct outcomes and market integrity • the expectation that culture to be actively owned and governed by firms and their senior managers • the link between culture, psychological safety and challenge, and • how the SM&CR, changes to the Conduct Rules to reflect the FCA’s expectations around non-financial misconduct, and the FCA’s Consumer Duty drive cultural change and provide the regulators with further tools for cultural oversight Introduction and regulatory context The FCA regards culture

This Practice Note addresses the Financial Conduct Authority (FCA)’s supervisory and enforcement focus on financial services firms’ compliance with the legal and regulatory framework for UK financial sanctions. It is relevant to firms regulated by the FCA under the Financial Services and Markets Act 2000 (FSMA 2000), as well as firms within the FCA’s supervisory scope such as e-money firms, payment firms and cryptoasset businesses (herein referred to as ‘firms’). It considers: • FCA supervision of firms’ sanctions systems and controls, including the FCA data-led supervision and the sanctions screening tool • priority areas and sectors for FCA supervision, including the FCA’s supervisory correspondence, multi-firm reviews and statements • the relevance of sanctions compliance to the Prudential Regulation Authority (PRA), and • FCA (and PRA) enforcement action for failures relating to sanctions compliance For further practical guidance related to sanctions’ systems and controls, see Sanctions compliance—overview. For a higher level overview of the legal and regulatory requirements relating to sanctions, see: Introduction to UK sanctions compliance for financial services firms. Key points • the

Introduction This Practice Note considers the statutory basis for FCA supervision and the FCA’s supervisory approach, including the FCA’s decision-making framework. It examines the FCA’s supervisory principles, focus and priorities in addition to summarising how the FCA supervises firms in practice. This Practice Note also considers the approach of FCA supervision to the retail and wholesale markets and to international firms, in addition to the supervision of specialist areas (financial crime, fintech and outsourcing). It considers the FCA’s co-operation with other bodies, such as the PRA, and discusses the FCA’s supervisory approach to prudential regulation of firms that are not dually regulated by the PRA. The information is based, in the main, on: FCA Mission: Approach to Supervision (April 2019), the FCA Handbook’s Supervision Manual (SUP), and FCA’s Mission Paper 2017: How we regulate financial services. Further information on the FCA and PRA generally can be found in UK regulators—financial services—overview. Information on supervision by European regulators can be found in Practice Note: The European Supervisory Authorities (ESAs) and the European System of Financial Supervision. Overview

The Financial Conduct Authority (FCA) has published findings from a survey of 303 corporate finance firms (CFFs), revealing weaknesses in financial crime oversight. The survey found that around two-thirds of firms not required to submit financial crime data returns may be failing to comply with the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, SI 2017/692 (MLRs 2017). The FCA identified that 11% of firms lacked a documented business-wide risk assessment and 10% did not retain evidence of customer due diligence (CDD). In addition, 29% of principal firms had not conducted financial crime risk assessments for their appointed representatives (ARs) and 6% had not monitored ARs’ compliance or carried out on-site audits. The FCA warned that these gaps expose firms and markets to risks of money laundering, fraud and other financial crimes. It noted that the findings are based on firms’ self-reported information and do not represent an FCA review of their anti-money laundering systems and controls.

Law360, Expert Analysis: Make no mistake, non-financial misconduct remains at the top of the Financial Conduct Authority's (FCA) agenda. In October 2024 the regulator published the results of its survey on non-financial misconduct, and made clear that the results should act as a catalyst for regulated firms' boards and trade associations to prioritise and act on issues of non-financial misconduct that lead to poor working cultures and can ultimately harm consumers or market integrity. Written by Michelle Diamond, partner, and Imogen Makin, counsel, at WilmerHale.