There has been a sharp fall in the number of individuals working in financial services being referred to the Financial Conduct Authority's regulatory decision committee (RDC), according to the City-based professional services firm RPC.
The numbers dropped 64 per cent to 13 in 2017, down from 36 in 2016.
The RDC is an independent panel that hears disputes relating to the FCA's findings against firms and individuals. There were 476 businesses referred to the RDC in 2017, up from 289 in the previous year.
Over the same period the FCA only issued eight fines against individuals in 2017, down from 15 in 2016. The value of those fines dropped from £16m to £435,000 over the same period.
But Parham Kouchikali, a partner at RPC, said: "Anyone who thinks that the FCA has gone soft on individual misconduct may be in for a rude awakening.
"In practice, we are seeing ever increasing numbers of FCA investigations into individuals, particularly the senior management of financial services firms.
"The FCA has recently publicly reaffirmed its commitment to pursuing individual responsibility vigorously and it won’t want to leave itself open for criticism for not pursuing cases against individuals.
"We expect significant increases in referrals to the RDC in the coming years - not only due to the projected increase in the number of investigations into individuals, but also due to recent changes to the FCA enforcement process that mean discounts on penalties will no longer be forfeited by individuals and firms if they dispute the FCA's findings and refer their cases to the RDC."
Mr Kouchakali said the temporary fall in FCA action against individuals could be partly due to the lingering impact of organisational disruption at the regulator between 2015 and 2016, which saw it headed by three different chief executives in just over a year.
He said that with a new chief executive in place for more than a year-and-a-half, FCA enforcement activity should now be running at more normal levels.
An FCA spokesman said: "There has been no change in our approach to misconduct or financial penalties. We remain committed to investigating and holding firms and individuals to account for misconduct and ensuring wrongdoers pay for the costs of remediation.
"In fact the FCA is doing more enforcement not less - over the last year alone there has been a significant increase, of 75 per cent, in the number of investigations we have commenced."