UK: FCA updates its Enforcement Guide

Why should I read this?

In 2024, the FCA consulted on changes to its Enforcement Guide (CP24/2 and CP24/2: Part 2). The proposals included a new publicity policy to increase transparency by introducing a ‘public interest’ test to determine whether to announce an investigation. This represented a major departure from the FCA’s existing approach, under which investigations are only announced in ‘exceptional circumstances’, and was widely criticised. 

Earlier this year, in view of industry concerns and a lack of consensus, the FCA confirmed that it would not be shifting to a public interest test but would take forward other proposals relating to publicity. The FCA has now published PS25/2: Our Enforcement Guide and greater transparency of our enforcement investigations, which confirms its revised investigation publicity policy. The policy statement also sets out other changes to the Enforcement Guide (ENFG) which are intended to streamline content and reduce duplication. 

Revised publicity policy

Retention of exceptional circumstances test

The FCA is retaining its existing approach to publicity for investigations into regulated and listed firms, i.e. the ‘exceptional circumstances’ test. 

The FCA does not generally announce investigations into individuals.

Other circumstances in which the FCA may make announcements

The publicity policy now provides for three additional circumstances in which the FCA may make announcements.

1. The FCA may name a subject it is investigating for:

• suspected unauthorised financial services, including communicating a financial promotion without appropriate approval; or
• a suspected offence linked to unregulated activity,
  
  if it considers an announcement is desirable to warn or alert consumers or investors, or to help the investigation itself, e.g. by bringing forward witnesses.

2. The FCA may publicly confirm that it is investigating a subject if that fact has already been made public by the investigation subject, an affiliated company, or a regulatory body, government or public body. The announcement may also confirm the nature of the investigation as far as that has already been made public.
3. The FCA may make public that it is investigating a particular matter on an anonymised basis without naming or identifying the subject of the investigation. The FCA may do this for the purposes of education and to encourage compliance with regulatory requirements. 

Decision-making and process

Decisions on publicising investigations will be taken by an FCA Enforcement Executive Director. Where appropriate, the FCA will consider the potential prejudice that publicity may cause to the investigation subject. The FCA may discuss a proposed announcement with the investigation subject to inform its considerations. 

Implementation date

The revised publicity policy applies to investigations opened on or after 3 June 2025.

Other changes to the Enforcement Guide

The FCA is implementing most of the other changes on which it consulted in CP24/2 and has made further changes in light of feedback received. The main changes are summarised below.

Moving content to the FCA website

The FCA is moving content about its broader strategic approach to enforcement from ENFG to its website. This includes information on case selection, cases where other authorities have an interest, sources of cases and cooperation, and senior management responsibility.

Deletion of content

The FCA is deleting duplicative wording on its investigation policies from ENFG. This includes duplicated statements of policy that are in its Decision Procedure and Penalties Manual (DEPP) and wording that repeats legislation. 

Proposals to delete other content from ENFG are not being taken forward. This includes wording relating to legal review of cases, the role of the Regulatory Decisions Committee (RDC) in approving press releases where the RDC made the decision to take action, and extensions of time for responding to information requirements. 

Acceptance of firm-commissioned reports on a limited waiver basis

The FCA had proposed to amend content in ENFG relating to its acceptance of firm-commissioned reports on a limited waiver basis. In response to feedback, the FCA has clarified the relevant wording.

Attendance of legal advisers at compelled interviews

The FCA has amended ENFG to clarify its existing approach to the attendance of legal advisers at compelled interviews. Under this approach, an interviewee may generally be accompanied by a legal adviser who acts for them. However, the FCA may refuse attendance of a particular legal adviser where it thinks their attendance may prejudice the investigation. This may happen where the adviser acts for multiple parties in the investigation and the FCA has concerns that their attendance may make the interviewee feel less able to give candid answers or the FCA sees the potential for the interests of the parties to diverge.

Commencement of civil and criminal proceedings

Decisions on whether to commence civil and criminal proceedings currently rest with FCA Executive Directors. The FCA is extending this to include Directors in Enforcement. The FCA expects that decisions to commence criminal prosecutions will continue to be made at Executive Director level. 

Scoping meetings

The FCA will determine on a case-by-case basis whether to hold a scoping meeting. The FCA will generally hold a scoping meeting where the investigation subject wants or requests one, while being flexible where the investigation subject expresses no such need or agrees that one is unnecessary. This has been explicitly clarified in ENFG. 

Private warnings

The FCA has not used private warnings for some time and has now clarified that it will no longer use them as an enforcement tool. References to private warnings have been deleted from ENFG. 

Moving content to the Supervision Manual (SUP)

Content on FCA powers to impose a variation, cancel a permission, impose requirements on its own initiative, and intervene against incoming firms has been moved from ENFG to SUP.

Future changes to the Enforcement Guide

The FCA has confirmed that it will consult on all future changes to the Enforcement Guide. 

Implementation date

The new Enforcement Guide came into force on 3 June 2025. 

What does this mean for firms?

Financial services firms will welcome the FCA’s decision to retain the exceptional circumstances test for announcing investigations. The introduction of additional, limited circumstances in which the FCA may announce investigations will increase transparency and help to better inform the sector about areas of regulatory concern. The more streamlined Enforcement Guide should be more user-friendly for firms, individuals, and their advisers. 

The FCA’s decision not to proceed with its proposal to introduce a public interest test for publicity was driven primarily by the feedback it received. It is unusual for the FCA to perform what amounts to a U-turn. Perhaps the main insight from this episode is the potential benefit to be gained from robustly challenging regulators when they make proposals that are misconceived and damaging to the sector. This is particularly relevant now that the UK financial services regulators have a secondary objective to facilitate the competitiveness and growth of the UK economy. 

Further reading on financial services investigations and enforcement

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UK: FCA’s approach to money laundering through markets

UK’s FCA consults again on enforcement transparency proposals

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