FCA Enforcement data 2023/24

We are a data led regulator and have introduced new tools across the organisation to analyse and act on insights faster. We have made it easier to spot trends and instances of harm, introducing platforms to support automation. This includes the development of a Digital Unified Intelligence Environment, to connect the vast array of data and intelligence across our systems. 

Our Whistleblowing team receives and captures all whistleblowing disclosures from external whistleblowers and refers this to relevant areas for assessment and further action, if required. Whistleblowing intelligence informs our work and can help us to take action to prevent harm before it occurs, or before a firm becomes non-compliant or in breach of our regulatory requirements.

View our latest whistleblowing data[1].

Enforcement is pivotal in the work of the cross organisational Financial Promotions and Enforcement Taskforce (FPET). FPET issues warnings and alerts about firms that appear to be carrying out regulated activities without our authorisation. This includes issuing specific alerts to our Warning List[2]. We also refer potential investigations to other agencies, including the police.

Most Threshold Conditions cases relate to firms rather than individuals. There are different types of cases and we seek to address all areas of concern within a firm at the same time, so a single firm may have multiple cases. Types of cases are when the firm has failed to:

• submit a Directory Persons Attestation (Directory Person)
• submit a Firm Details Attestation (FDA)
• pay its annual fee and the collections process has been exhausted (Fee)
• submit a Regulatory Return (Returns)
• carry on regulated activity related to the permissions it holds (Use it or lose it or UIOLI)

Cases are more complex where a firm or individual has failed to meet our minimum standards to the extent that we no longer consider they should remain regulated and/or should be prohibited from carrying on financial services in the future (we call these 'Failure to meet standards' cases).

Cases opened during 2023/24

Of the cases opened during 2023/24, 2% were against individuals, with the remaining 98% against approximately 2,600 firms.

Cancellations and Prohibitions during 2023/24

Table 1: Prohibitions 

Other outcomes

Other outcomes include firms agreeing to take action to meet the standards we require, and cases being discontinued in favour of other regulatory action (for example, variation of permissions or ongoing supervisory oversight).

The Interventions team within Enforcement supports our commitment to reduce and prevent serious harm and deal with problem firms. It works closely with colleagues in SPC to identify and respond to concerns about firms or individuals that present a risk of ongoing harm, including of financial loss to consumers or to market integrity.

The team use a variety of tools to engage with firms and take early and swift action to address risks of ongoing harm to consumers or markets. This includes increasing use of our formal intervention tools (eg, varying or imposing requirements on a firm’s regulatory permissions) and informal tools.

During 2023/24, the Interventions team advised SPC on 268 interventions cases, where we considered the use of voluntary requirements or our own initiative powers, up from 209 in the previous year. During 2023/24 we closed 242 interventions cases.

When supervising and monitoring a firm or as part of an enforcement action, we may make it clear that we expect a firm to take certain steps to meet regulatory requirements. In most cases, we seek to agree with a firm the steps it must take to address our concerns.

As shown below, during 2023/24 the number of voluntary outcomes supported by Enforcement increased by nearly a quarter from the previous financial year:

Table 2: Voluntary outcomes

Where appropriate we exercise our formal powers to impose requirements on a firm’s permissions (OIREQs), to vary a firm’s permissions (OIVOPs), to vary a Senior Management Function holder’s approval (OIVAPs) or to give directions under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (OIDIRs). 

During 2023/24 Enforcement also supported the following own initiative outcomes: 

Table 3: Own initiative outcomes

A small number of the own initiative actions taken during 2023/24 remain subject to a potential challenge from the firm, either via representations made to the decision-maker or through a reference to the Upper Tribunal.

The above table shows a small increase, compared to the previous financial year, in the instances where we used own initiative powers. For voluntary actions taken and the number of cases that the Interventions team are supporting SPC on, the data for this financial year reflects our strategy of, in most cases, seeking to agree with a firm the steps it must take to address our concerns. 

We open an Enforcement operation when we have decided to appoint investigators under Pt XI of the Financial Services & Markets Act 2000. A single operation may investigate several subjects (ie, firm and/or individuals) at any one time.

Our Wholesale investigation teams protect market integrity,  consumers and reduce financial crime. They focus on taking regulatory, civil and criminal proceedings against firms and individuals who commit market misconduct or wholesale conduct breaches. They investigate a wide range of potential misconduct including:

• insider dealing
• market abuse
• market manipulation
• benchmark manipulation
• Listing Rule breaches
• transaction reporting breaches
• issues of wholesale misconduct (for example, those relating to systems and controls or corporate governance failings within wholesale insurers or banks)

Our Unauthorised Business investigation teams protect consumers by investigating and taking enforcement action against firms and individuals carrying on regulated activities without authorisation, in breach of the general prohibition and/or contravening restrictions on financial promotions. Their investigations can also lead to prosecutions for fraud.

Our Retail & Regulatory investigation teams protect consumers and reduce financial crime in the regulated sector. Their focus is on taking regulatory, civil, and criminal proceedings against firms and individuals in retail/consumer markets. Retail investigates sectors covering:

• retail banking
• stockbroking
• asset management
• mortgage broking and lending
• insurance
• financial advice
• consumer credit
• payment services

Retail and Regulatory investigation teams deal with firms that sell unsuitable products or services to consumers, mishandle client money and assets, or have governance and systemic issues. They also investigate financial crime matters and take action against individuals under the Senior Managers and Certification Regime, APER and/or fitness and properness regimes.

For Financial Year 2023/24 we have reported Enforcement operations rather than by individual or firm cases. The data reflects the number of operations, under which an individual, a firm or a group of individuals and/or firms may be put under investigation. On 31 March 2024, we had 188 open Enforcement operations, investigating 341 individuals and 162 firms.

We report current operations against our strategic priorities:

• reducing and preventing financial crime
• putting consumers’ needs first
• strengthening the UK’s position in global wholesale markets
• other (for example, serious misconduct, that does not directly align to one of the 3 strategic priorities referenced above)

We categorise each operation as criminal, civil or regulatory based on the nature of the breaches or offences. When we open an operation, we do not prejudge the potential outcome. So, if we are investigating a potential breach that might lead to us taking criminal, civil or regulatory action we will open those cases on a dual-track basis.

Table 4: Current operations on 31 March 2024 by type of operation and strategic commitment

Duration of Enforcement operations

The speed of investigations and the length of time that an investigation may remain open will depend upon various factors, including:

• the level of cooperation from subjects of investigations, including legal cooperation
• the complexity of the issues under investigation
• the volume of data and evidence to be obtained and reviewed
• whether the subject contests the allegation
• delays in the justice system

The data references 2 stages of an operation; the investigation stage and the post investigation stage. The investigation stage starts when we decide to open an Enforcement operation.  It runs throughout the case team’s investigation and, where necessary, includes legal review and settlement. Following the investigation, an operation may close, may settle, or it may result in proceedings before the Regulatory Decisions Committee (RDC) or contested litigation in the courts or Upper Tribunal. Proceedings before the RDC or contested litigation is the post-investigation stage.     

The duration data refers to when we decided to open an Enforcement operation and the stage the operation had reached as of 31 March 2024.

In criminal proceedings, an operation remains open after an individual is convicted while any confiscation orders imposed by the courts under the Proceeds of Crime Act 2002 remain outstanding. The duration data includes 3 current operations, which are on hold and over 60 months old, because a defendant has absconded from criminal proceedings.

Table 5: Age of current operations in the investigation stage in a 2-year window

Table 6: Age of current operations that have proceeded through the investigation stage and are now in the post-investigation stage in a 2-year window

Operations opened

We opened 25 operations in the financial year 2023/24, compared to 34 in 2022/23.

Table 7: Number of operations opened from 1 April 2023 to 31 March 2024

Operations closed 1 April 2023 to 31 March 2024 by duration in a 2-year window

The table below sets out the age of the operations by duration in a 2-year window.  This data represents the period from our decision to open an Enforcement operation to case closure on our case management system.

Table 8: Operations Closed 1 April 2023 to 31 March 2024 by duration in a 2-year window

Enforcement outcomes

An operation may investigate several subjects (ie, firm(s) and/or individual(s)) at any one time, this means we may achieve several outcomes as part of a single operation. For that reason, we report Enforcement outcomes at subject, rather than operation, level.

Table 9: Enforcement outcomes

*Including Decision Notices relating to Money Laundering Regulations 2007 and Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.

Includes 3 x competition fines.

2022/23 Final Notices that 28 was updated to 29 since the 2022/23 publication

*An Enforcement Final Notice may contain several outcomes. These outcomes have been listed in their respective area.

*The Threshold Conditions cancellations – see section above.

On 31 March 2024, we had a total of 46 restraint or civil freezing orders with an estimated value of over £60m. Of this, we obtained 9 new restraint or civil freezing order cases during the financial year 2023/24.

Table 10: Total number of restraint or civil freezing orders with value on 31 March 2024

Table 11: New restraint or civil freezing orders obtained between 1 April 2023 - 31 March 2024

Proceeds of Crime Act: Confiscation orders

A confiscation order is made after conviction, to deprive an offender of the financial benefit gained from crime.

We have continued to enforce existing confiscation orders to secure compensation for victims and deprive criminals of their proceeds of crime.

Where there are consumer losses, the Court may order that compensation is paid to victims from confiscation money recovered. If there are no identified victims, or the money recovered is over and above the amount of compensation ordered, this money is paid to the Home Office.

We are a member of the Asset Recovery Incentivisation Scheme. As part of this scheme, we receive a portion of the money recovered and paid to the Home Office following successful proceedings conducted under the Proceeds of Crime Act 2002.

Redress

Table 12: British Steel Pension Scheme

Our investigations increasingly have an international angle, and the underlying misconduct we tackle often involves multiple jurisdictions.

Effective cooperation with international regulators and law enforcement agencies is vital to the work we do, particularly for tackling online harm and new products.

We dedicate significant resource to building, maintaining, and strengthening international cooperation. We take steps to ensure all appropriate action occurs to help international partners protect financial markets and prevent harm.

Our powers to seek information needed for investigations, including where doing so is to help a foreign regulator, are vital in ensuring investigations involving multiple jurisdictions can be conducted properly. We continue to exercise these powers robustly.

Our work with international groups

We work closely with international groups like the International Organisation of Securities Commission’s (IOSCO) committee on enforcement and the exchange of information to tackle cross-border misconduct.

We continue to be the largest user of IOSCO’s Multilateral Memorandum of Understanding (MMoU). We also receive the largest number of requests for help under this agreement and request numbers have increased year-on-year.

One of our directors is currently Chair of IOSCO’s MMoU Monitoring Group. This group is focused on the continued success of, and full compliance with, this essential cooperation agreement. We expect to begin implementing significant positive change in this area in the coming year.