Regulation  

2014 a bumper year for FCA

2014 a bumper year for FCA

The FCA levied around £1.5bn in fines during 2014, nearly three times the amount raised the year before.

Last year was one of bumper fines, with five banks told to pay a record £1.1bn for failing to control business practices in their G10 spot foreign exchange trading operations.

Citibank NA was fined £225.5m, HSBC £216.3m, JP Morgan Chase £222.1m, the Royal Bank of Scotland £217m, and UBS was made to pay £233.8 for failings the FCA said undermined confidence in the UK financial system.

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The only non-foreign exchange-related fine to approach these in size was Lloyds Banking Group’s £105m penalty for serious misconduct relating to the special liquidity scheme, the Repo Rate benchmark and the Libor.

The quantity of fines means the FCA leaves its US counterpart the Financial Industry Regulatory Authority in the shade. The Washington DC-based regulator only handed out $98.4m (£65.2m) in fines during 2014.

The FCA also banned 20 people from operating within the financial sector. A total of 114 final notices were published during 2014, 39 of which consisted of fines followed, by another 30 which cancelled an individual’s or a firm’s registration.

When the FCA wasn’t attempting to stamp out financial foul play, it was evidently working on its thematic reviews. The City watchdog published 21 thematic reviews in 2014 compared with just 10 the previous year.

These covered wide-ranging issues such as annuities – published before the Budget announcement about pensions – and complaint handling, but also niche subjects such as conflicts of interest in in-house investment products at private banks and wealth management firms.

In total the FCA published 546 pages of thematic review over the course of the year – or 2.07kg of A4 paper.

Adviser view

Michael Bower, director of Surrey-based Aspen Financial Services, said: “Obviously regulation is onerous by its very nature but I don’t find it overly so and I don’t find myself spending half my life worrying about the FCA.

“If you look at the organisations they have fined they are very big, so maybe the size of the fines reflects that.”