Financial Conduct Authority (FCA) enforcement activity against both firms and individuals fell in the last financial year, ending 31 March 2023, according to the findings of a freedom of information (FOI) request published by global law firm Reed Smith.
The data revealed that in the last financial year the number of enforcement cases opened against firms fell by 67% – to 26 from 79.
Cases opened against individuals fell by 33% to 74 from 111. The downwards trend was also reflected in the number of cases closed against both firms and individuals, which fell by 10% and 44%, respectively in the last financial year.
Romin Dabir, partner at Reed Smith, said: “It is difficult to determine exactly why enforcement activity is falling, though it is possible that it is related to a backlog of issues created by the covid-19 pandemic. It could also be that the drop in cases opened has occurred because the FCA has devoted resources to closing cases it has already opened.
“The relative decline in enforcement activity may also reflect the government’s current objective to increase the competitiveness of the City of London. It is possible that the FCA may be adopting a lighter regulatory touch on certain issues than in previous years.
“Having said that, it’s important to note that on a number of issues, be it insider trading or operating a collective investment scheme without being authorised, the FCA has continued to take action with activity levels remaining high.
“It could well be that the last year is something of an aberration as there is good evidence to suggest that in the first few months of the new financial year the FCA has redoubled its efforts. Consequently, we could see an uptick in enforcement activity in the not-too-distant future.”
