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Published 30 March 2017
Last year the amount of fines issued by the FCA dropped dramatically. Only £23m was issued in fines against companies and individuals in the financial services sector, compared with nearly £1bn handed down in 2015. In fact, 2016 saw among the lowest amount of fines issued by the regulator in a calendar year for nearly a decade.
So what is responsible for this significant reduction? Is the FCA softening in its approach? Or could it be a reflection of the fact that firms have now reacted to the regulatory focus they found themselves under following the financial crisis, and boosted their spending on compliance as a result?
Mark Steward, the FCA's director of enforcement, challenged the suggestion that the regulator was weakening at the start of this year, by stating in a speech "we have not gone soft". This, and similar statements issued by the FCA, as well as its approach to recent investigations and pursuit of a broader range of targets suggests quite the opposite – that the regulator continues to act with vigour and should not be underestimated.
The reduction in levels of fines may instead be attributable, among other factors, to:
It seems that the lower levels of fines issued by the FCA reflect only a more targeted approach by the FCA – on culture and individual accountability in particular. Recent actions undertaken by the regulator show a willingness to embrace new weapons and approaches to pursuing these new targets, and existing ones, with the same ferociousness as before.
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