Christmas tips from the Enforcement Department

News reaches us from our mole in FCA

Looking back over the past year, our source tells us that enforcement actions are lengthy, expensive and don’t necessarily reach a conclusion. So no surprises there!

We now understand that an enforcement action can be started even before the preliminary investigation is concluded, and that the actual harm to consumers of whatever’s being investigated may be minimal or indeed non-existent. It’s the risk of harm that FCA will want to look at.

Our top tip: if you’re ever in a discussion which might lead that way, make sure that your first response to FCA is your best response.

Need to escape the relatives over the festive period?

You may want to log on to your favourite Chat Room.

There you can share ideas, test the water for your new plans and generally benefit from the anonymity of the forum.

But use with caution.

Our FCA mole tells us that FCA staff use these Chat Rooms themselves to smoke out abusive behaviour. That Chat Room member who thinks your latest wheeze is a great idea? They may be from FCA, just egging you on to a serious breach.

Our top tip: don’t use Chat Rooms.

A little extra on the side…

No, we’re not talking here about another slice of turkey.

FCA’s Market Watch 62 from October revealed a surprisingly cavalier attitude to Personal Account Dealing rules by staff and their employers. FCA saw instances of front running, analysts dealing contrary to their recommendations and managers dealing contrary to their advice. Even compliance staff were found to be deliberately not declaring external accounts! What is the world coming to!

This is a serious issue. As FCA point out, if staff are not declaring PA deals to you, it may not be because they’re not doing them. They may be doing them away from your gaze. All firms need to consider the risk they face here.

Our top tip: a little of what you fancy doesn’t necessarily do you good…

New Year, New You!

Along with all of the other self-help magazines at this time of year, Fulcrum Compliance are recommending that you use the holiday break to focus on what really matters to your firm and make a resolution to change for the better!

Why?

Because our SMCR mole at FCA is telling us that they are already training their 600+ supervisors to be ready to engage with firms on how they are embedding a healthy culture. And that’s nothing to do with your post-Christmas diet plans.

All of Fulcrum’s retained clients have in the run up to SMCR been through a training programme that looks at firm culture. Whilst we would be the first to admit that this alone doesn’t change anything, it does allow the firm to talk about cultural issues and begin a dialogue.

Our top tip: if you’ve not done this yet, get on board.

Three strikes – and you’re lucky

It used to be the case that FCA gave a firm a couple of chances to put things right, before reaching for the blunderbuss of a s.166 report.

Further word reaches us from our FCA Supervision mole that they’re showing no such restraint at the moment, and reaching immediately for the big gun, especially when they’re concerned about financial crime.

Who’s dreaming of a Green Christmas?

Not just Greta Thunberg, but FCA, too.

City Lawyers Ashurst wrote in October that FCA “is expecting a real change in how all financial services firms should be incorporating climate change considerations in to their products or holdings and assessing how climate change is likely to affect customers and their assets.”

This looks set to grow…