Financial services firms that have been issued with enforcement notices by the Financial Conduct Authority in the first four months since it was inaugurated in April have agreed discounts totaling £10m by admitting their guilt at an early stage.
According to an analysis by international law firm Pinsent Masons, since its inception the FCA has published around 30 enforcement notices, of which almost a quarter have allowed for a discount on the penalty levied.
The FCA, continuing a process introduced by its predecessor, offers early settlement discounts f 30 per cent where the business under scrutiny accepts some degree of wrongdoing at an early stage.
Such early settlement has collectively produced discounts of £10.05m between April and July 2013, Pinsent Masons analysis shows.
In a statement the firm said: “Although this type of early settlement typically reduces enforcement costs for the City watchdog, they have been controversial in the past.
“In February this year the Treasury Select Committee said that regulators should be prepared to take a tougher line in settlements with banks found to have broken the rules.”
Monica Gogna, a regulatory expert in the law firm’s Financial Services group, said: “The discounting regime is an effective way of incentivising regulated businesses to comply with investigations.
“People may be surprised by the £10m figure though, and will be watching carefully to see whether the recent run of discounts is a ‘flurry’ or a more subtle shift in FCA policy.”