FCA Enforcement is hammering the reset button. What happens next?

When announcing the FCA's controversial proposals about publicising investigations, Enforcement co-head Therese Chambers said also that the FCA must "tackle the delay between misconduct occurring and penalty being imposed".  And that the FCA "will focus on a streamlined portfolio of cases through [which] we can deliver the greatest deterrent impact".

A message that FCA chair Ashley Alder repeated to the Treasury Select Committee. According to Alder, there's a "broader piece of work that we are currently developing" and haven't yet formally announced, around ensuring early preventative interventions coupled with enforcement investigations that are fewer in number but "targeted at the greatest harms". 

Something, by the way, that they've been working on since at least October 2023.  In any event, it looks like Mark Steward's use of investigations early and often as a diagnostic tool is over.

And lest you think this is all talk, the data shows the FCA walking the walk. 

In 2022-23 the FCA took stock: it opened fewer investigations but closed fewer as well. 

But the weather really changed in 2023-24: the FCA opened even fewer investigations but closed substantially more.

The net result: the number of open FCA investigations is declining significantly.

Presumably all this clearing of the decks will help to mitigate the risk of further stinging defeats for the FCA in the Upper Tribunal perhaps in part due to case theories adopted in response to investigations delays and limitation period issues.

And once the dust settles, the FCA will be looking to demonstrate its "impactful deterrence" approach in action.  It will progress its next crop of investigations more quickly and assertively.  Which means that firms now need to be both more nimble and more considered in their regulatory relationship management and in their engagement with pre-enforcement and enforcement investigation processes.

It's the calm before the storm.