The FCA’s new Enforcement Guide has landed – including its new investigations publicity policy

The FCA has a shiny new Enforcement Guide (ENFG) replacing its old EG (last updated in January 2021) with immediate effect.

All of the details of the changes are discussed here … except for the new investigations publicity policy, which deserves this post all to itself. 

The FCA's investigations publicity proposals garnered substantial and widespread criticism.  Its approach here rows back from most of these, but important strategic implications remain.

The new publicity policy will apply to all investigations started on or after 3 June 2025 (rather than applying retrospectively, as initially proposed). 

Exceptional circumstances remains

To date, EG permitted the FCA to publicise the existence of an investigation in “exceptional circumstances” for example, to maintain market confidence or protect consumers.

The new ENFG retains the "exceptional circumstances" test as the principal threshold for publicising investigations into regulated firms.  This is in response to widespread industry concerns about the FCA's proposed "public interest" test; these concerns primarily related to potential reputational harm to firms under investigation, market disruption, and unfairness - particularly where investigations are discontinued with no action.

The ENFG makes clear that the FCA will not generally announce investigations into individuals (save in limited circumstances such as where an individual holds themselves out as a firm).

Further, the FCA will consider potential prejudice to the relevant subject of the investigation before making announcements.

Some new exceptions

On top of this, though, the FCA has introduced three new categories where the FCA may publicise investigations more readily:

1. Investigations into suspected unauthorised activity or criminal offences relating to unregulated activity  

ENFG now allows the FCA to proactively announce and name the subjects of investigations into suspected unauthorised financial services activity (including breaches of the financial promotion regime) or criminal offences linked to unregulated activity. This is permitted where the FCA considers an announcement desirable to warn or alert consumers or investors, or to assist the investigation (for example, by encouraging witnesses to come forward). This is a notable shift, reflecting the FCA’s concern about consumer harm in the unauthorised sector and its limited supervisory powers in this area (ENFG 4.1.6).   It is worth noting that this will cover suspected criminal offences involving the unregulated part of an authorised firm’s business, but not misconduct in its regulated activities. 

2. Reactive confirmation of investigations

ENFG now allows the FCA to confirm the existence of an investigation if the fact has already been made public by the subject, an affiliated company, or a regulatory, government, or public body. The FCA’s announcement may also confirm the subject matter of the investigation to the extent it is already public (ENFG 4.1.7). This addresses previous criticism that the FCA would not confirm investigations even when they were already widely known, leading to confusion and speculation.

3. Anonymised announcements

The FCA may make public that it is investigating a particular matter without naming or otherwise identifying the subject, where it is desirable for educational purposes or to encourage compliance with FCA rules or requirements (ENFG 4.1.8). This is intended to have an educational and deterrent effect, helping regulated firms understand the types of conduct under scrutiny.  This opens the door to publication of an ‘Enforcement Watch’, although the FCA states that it is ‘still considering’ how and when it might use this power. 

The implications

This policy change will likely most directly affect firms engaging in unauthorised activity. 

For regulated firms, the shift is incremental, and we expect there to be more reactive confirmations and anonymised announcements going forward. 

The FCA’s  confirmation of  its view that sharing anonymised information about investigations would be beneficial in appropriate circumstances, including "to help firms to identify areas to address in their own businesses and promote better compliance with our requirements"; and for consumers, to educate them about areas of concern in order to "support better-informed decisions, helping to reduce or avoid harm".

So although the FCA is still guarding its hand, it looks like an "Enforcement Watch" style publication may be on the horizon.

Should this materialise, firms should carefully consider such a publication to prioritise their own compliance efforts.  We'll be watching it too, lest it slip into the territory of guidance-making without formal consultation.

Back to the future

The FCA observed in its response that none of the investigations into regulated firms opened by the FCA since April 2023 (when Therese Chambers and Steve Smart took over) have closed with no further action.  This reflects our experience that the FCA is pursuing cases more selectively, often where there has already been extensive supervisory engagement.

Indeed, the FCA has committed to reporting annually the number of cases in which it shares information about an investigation and then takes no further action.

This is no doubt to counter criticism it received about this whilst consulting on its investigations publicity proposals.

But there's a balance to be struck.  The FCA has attracted the opposite criticism in the past - that it only pursues cases it believes it can "win".  There's a concern here that the FCA, upon publicising an investigation, might feel itself committed to taking action (risking opprobrium from external stakeholders if it does not).