In 2024, the FCA issued fines totalling £176,045,385 as part of its disciplinary actions and enforcement penalties. These fines were issued for various breaches, including Market Abuse Regulations, listing rules, and the FCA’s Principles for Businesses. In the first 10 days of 2025, the FCA has already imposed a fine amounting to £288,962.53 for breaches of the FCA’s Principles 2 and 3 related to the risk of financial crime.
For those familiar with the FCA and its supervision strategy, this is not surprising. The FCA is indeed maintaining its promise, as outlined in their Business Plan for 2024-2025, to crackdown on non-compliance with a pro-active approach to supervision.
The FCA’s financial penalties for 2025 are expected to increase. With a slew of new standards and measures, including the SDR regime, non-financial misconduct and critical third parties, either newly in effect at the end of 2024 or expected to come into effect over the next year, the FCA will remain vigilant and uphold high standards across all the firms it regulates.
Implications of FCA’s Financial Penalties
A quick review of the FCA’s annual fines page highlights the Regulator’s commitment to its Business Plan. The fines have surged from £53.4 million in 2023 to the impressive £176 million figure reported in 2024. This jump indicates far-reaching implications.
The FCA is dedicating substantial resources to the investigation, supervision and probing of all firms under its remit. This encompasses both Small and Medium-sized Enterprises (SMEs) and larger corporations, from its Annex I firms through to the CFD brokers.
The staggering increase in financial penalties demonstrates that the FCA expects compliance regardless of whether a firm has 10 employees or 1,000. Firms under FCA supervision should be questioning their policies and procedures, if they have not already done so. Failing to ensure evidence of compliance, through policies, procedures, logs and oversight, exposes firms to steep regulatory consequences.
How Does this Impact Me and My Firm?
As the FCA intensifies its scrutiny, it is crucial for firms to proactively address their compliance needs. Here are some solutions to help mitigate the risk of FCA penalties and fines:
- Do not wait for an FCA probe before acting – Conduct a comprehensive compliance audit. Firms should conduct annual audits of their compliance frameworks, policies and procedures. This includes assessing adherence to existing regulations and identifying any gaps that may expose the firm to risk.
- Document Everything – Keep detailed records of compliance efforts, including staff training sessions, internal audits and communications with the FCA. This documentation can serve as evidence of your firm’s commitment to compliance in the event of an investigation. Ensure that all documentation is regularly updated to reflect current practices and regulatory requirements.
- Focus on Staff Training and Awareness – Implement tailored and regular training programmes for all employees and ensure that staff understand their specific roles in maintaining compliance.
- Strengthen Governance and Oversight – Ensure that the Board of Directors is actively engaged in compliance oversight. Regularly report compliance status and issues to the Board to maintain accountability. Define clear roles and responsibilities for compliance within the firm.
- Stay Informed – Subscribe to FCA newsletters, attend industry seminars or webinars and participate in relevant forums to stay informed. Update internal policies and procedures to reflect any new regulatory requirements. Ensure that all staff are aware of these changes and understand their implications.
Take initiative and be proactive in order to significantly reduce the risk of incurring FCA penalties and fines, staying out of the line of fire for what is expected to be a high number of fines this year.
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