Unusually low level of fines handed down by City watchdogs in 2016 will not be repeated this year, with new rules and a broadening of remits likely to mean more penalties are on the cards in 2017.
But according to another City firm, Fox Williams, businesses in the Square Mile should not be resting on their laurels in 2017.
“When it became clear that fines levied in 2016 were the lowest since 2007, there was a view that financial services had finally responded to increased scrutiny and cleaned up its act. Or conversely that the regulator had softened its approach to misconduct," said Peter Wright, partner and head of financial services investigations at Fox Williams. "Our analysis shows this is far from the case.”
Fox Williams highlighted five key areas it expects the FCA to target over the next year. Top of the list was prioritising anti-money laundering and a crackdown on insider trading through the application of market abuse regulation.
One year after the introduction of the Senior Managers' Regime, Fox Williams added the FCA will start cracking down on shared responsibility among junior managers. Also, regulators will continue their focus on consumer credit firms and likely revive investigations over Libor rigging.
Small firm focus
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.
Separate analysis by RPC in December on the level of fines handed out by the FCA indicated a willingness for the FCA to pay more attention to how staff are behaving at regulated firms, rather than the overall actions of the institutions themselves.
RPC partner Richard Burger said:
The fall in fines is by no means a sign that businesses can sit back and relax. The FCA will want to ensure its presence is still felt.