Financial Conduct Authority  

Warning FCA focus could shift to smaller firms

Warning FCA focus could shift to smaller firms

The Financial Conduct Authority could be about to shift its focus onto smaller firms, a city law firm has warned.

Fox Williams said the unusually low level of fines handed out by the FCA in 2016 was likely to be an exception.

Fines issued by the FCA fell by 97 per cent in 2016 to just £22m, their lowest level in nine years.

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But Fox Williams has warned that a proposed increase in regulatory scrutiny, the bedding in of new rules and the broadening of the FCA’s focus to financial services firms beyond banking could send fines back up to previous levels.

Peter Wright, partner and head of financial services investigations at Fox Williams, said it was “far from the case” that the FCA had softened its approach.

He said: “After several years dominated by Libor and Forex offences, the regulator showed signs last year of casting its net far wider.

“Firms and activities which have a more obvious impact on the general public are once again entering the FCA’s sights.

“Big banks and trading floors have been the popular target for several years, but now it is the turn of smaller firms, independents, insurers, credit companies and anyone handling client money to be in the spotlight.”

“If Libor was the poster child of misconduct over the past five years, financial crime will take its place this year.”

Fox Williams said the FCA could prioritise anti-money laundering action during 2017, with several cases already under way.

Meanwhile there could be a revival in Libor scrutiny and continued focus on consumer credit firms.

The law firm also predicted that the FCA could start cracking down on the Senior Managers’ Regime, which marks its one-year anniversary in March, amid concerns that some firms are allowing junior managers to share responsibilities.

From 2018 advisers will become subject to the senior managers’ regime, along with every other firm in the financial services sector.