Financial Conduct Authority updated Enforcement Guide

The Financial Conduct Authority (FCA) has recently released its updated Enforcement Guide (the Guide) which is now in operation and applicable to all FCA investigations which started on or after 3 June 2025. This follows a consultation process which has produced a revised Guide which is streamlined to improve effectiveness and transparency of enforcement investigations.

Why has it been changed?

The original Enforcement Guide was published in 2007 and expanded substantially in subsequent years. It was felt that investigations were taking too long and that the Guide lacked clarity. Proposals were consulted on in  CP24/2 and CP24/2: Part 2. Large parts have been removed which has reduced duplication.

The updated Guide is also intended to be more user friendly and should enable firms and consumers to access key information more easily and in turn ensure greater transparency around enforcement.

What has been revised?

Policy on publicising investigations

Following the consultation, the FCA dropped its proposal of the ‘public interest’ test in deciding whether to name regulated firms under investigation. However, the “exceptional circumstances” test to determine whether an investigation into regulated firms should be published has been retained.

The new Enforcement Guide specifies three new circumstances where an FCA investigation may be published.

1. Where the FCA is investigating suspected unauthorised financial services, or a suspected offence relating to unregulated activity, and an announcement will warn consumers or investors or help the investigation.

This will allow the FCA to publicise details of those suspected of unauthorised activity related to unregulated services. This is designed to protect consumers/investors by warning them of the risk posed by the suspected firm and may encourage whistleblowing whilst also acting as a deterrence.

1. Where the fact of the investigation has been made public by the subject, an affiliated company or a regulatory body, government or public body.

Should an investigation already have been made public, the FCA may confirm that an investigation is taking place. This is intended to increase transparency and avoid any misunderstanding.

1. Anonymised announcements, not naming or identifying the subject of the investigation, where it would be helpful to educate people on the types of misconduct we are investigating.

The FCA may publicise investigations without naming those subject to the investigation. This is for educational/deterrent purposes and to assist with compliance with the FCA rules.

Policy on lawyers attendance at interviews

The FCA has amended its ‘policy on lawyers’ attendance during interviews despite resistance during the consultations. Previously, the policy was that a suspect was allowed to be accompanied by a lawyer if they wanted. However, the FCA now has discretion to refuse a lawyer’s attendance if it is determined that their presence risks prejudice to the investigation.

The FCA has stated that this discretion may apply in circumstances where a lawyer acts for multiple parties and there is a risk of conflict of interest. This is due to concerns of a suspect’s ability to be candid where their lawyer may also represent a co-accused.

The FCA’s policy is still that suspects are generally allowed to have a legal advisor present subject to the above. The new policy is likely to lead to employees of firms under investigations being required to have separate lawyers from their co-accused during interviews.

Accepting reports on limited waiver basis

The FCA will accept firms legally privileged reports on a limited waiver basis but will not agree the fact/the extent to which they are privileged.

Additional decision makers

The FCA has increased the number of senior staff with the discretion to commence enforcement proceedings to include directors (previously only executive directors had this discretion). The decision maker on each case will depend on each case and criminal prosecutions will still be decided by executive directors.

Optional scoping meetings

Scoping meetings carried out at the outset of an investigation are now optional and will be assessed on a case-by-case basis. The Enforcement Guide provides that a scoping meeting will usually take place where the subject of an investigation requests one.

Streamlining of approach

The FCA has removed over 250 pages in order ‘streamline and update’ the Enforcement Guide which had become outdated and frankly too voluminous. It is now more focused and will create greater clarity; it is hoped that this will mean that firms can more easily understand the Enforcement Guide.

The FCA has ceased to issue private warnings, preliminary investigation reports, or preliminary findings letters. These have not been used recently anyway and will not be used in the future. Formal enforcement is now to be the main deterrence.

Furthermore, parts of the Enforcement Guide have been moved into other parts of the FCA Handbook, such as the supervisory intervention powers is now part of Chapter 8 to the Supervision Manual (SUP 6B).

The future

The updated Enforcement Guide indicates that the FCA is taking action to improve transparency and effectiveness. Recent investigation times have shortened significantly with; “five recent investigations closed with a public outcome in less than 16 months, compared to an average length of 42 months in 2023/24”. The FCA has also confirmed that it will continue to consult on further changes going forward which will assist with concerns regarding transparency.

Our expert’s thoughts

Associate Solicitor, James Claughton who works across Olliers’ criminal and regulatory departments commented, “Whilst more succinct and indeed clearer guidance is welcome, as it is in any sector, it is the effective implementation of the same which is key. It does, however, seem as though the FCA has signalled a renewed commitment to working more efficiently and more effectively to protect consumers and take the fight to those they see to be perpetrating financial crime.”

Olliers have a team of experienced criminal and regulatory lawyers with particular expertise in helping defend investigations conducted by the FCA so if you or your organisation is under investigation please contact our team as soon as possible.