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Tuesday, 25 March 2014 11:23
FCA fines in regulator's first year 'truly staggering'
Analysts looking at what the FCA has done in its first year say the amount of fines issued by the regulator are " truly staggering".
Since its inception last April, the body, which took over from the Financial Services Authority, has handed out £409m in penalties.
Mary Stevens, manager Regulatory Analysis Europe at Wolters Kluwer Financial Services said: "The £409 million of fines issued by the FCA is a truly staggering figure in such a short space of time and the fact the same principles are continuously breached suggests that firms are not adapting to the change in initiative exemplified by the workings of the new regulator.
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"If the industry is to avoid making the same mistakes, firms must place the highest priority on developing a clearer understanding of what the FCA requires of them and monitor existing and new products and services on an ongoing basis."
Richard Pike, market manager for Non-Financial Risk at Wolters Kluwer Financial Services, said: "Unless firms put in place a process to systemically identify potential conduct risks and risks of unfair treatments of customers across all products and business units, we can certainly expect the FCA to continue to make example of those firms who step out of line."
Wolters Kluwer Financial listed six key findings from the first year.
It said:
1. The FCA appears most concerned with enforcement actions against larger institutions through its substantial penalties rather than the masses, such as hedge funds, asset managers and IFAs.
2. "Tick box" compliance culture has been removed as the regulator now expects full transparency on transactions, internal processes and governance on demand.
3. The FCA's expectations have evolved over the past 12 months, moving away from regular routine compliance visits to more focused thematic reviews of which it has published 15.
4. The FCA is paying less attention to discussion papers, having only issued one so far and more on taking decisive and definitive action at an earlier stage.
5. The regulator has come good on its word to intervene earlier in institutions' product development, addressing root causes of problems for consumers, scrutinizing an institution's governance and how it designs, operates and sells products.
6. Despite the hard-line stance demonstrated by the FCA, institutions are still allowing breaches of its Principles of Business.
Today's release of research also showed the following key findings over the 12-month period:
• 45 financial penalties handed out in total by the FCA, less than the FSA in 2012.
• 135 enforcement actions of note issued by the FCA.
• 7,620 combined FCA/PRA Handbook pages updated.
• £310 million in fines handed to banks alone.
- 13 financial penalties issued for mis-selling, the most of any reason.
Since its inception last April, the body, which took over from the Financial Services Authority, has handed out £409m in penalties.
Mary Stevens, manager Regulatory Analysis Europe at Wolters Kluwer Financial Services said: "The £409 million of fines issued by the FCA is a truly staggering figure in such a short space of time and the fact the same principles are continuously breached suggests that firms are not adapting to the change in initiative exemplified by the workings of the new regulator.
{desktop}{/desktop}{mobile}{/mobile}
"If the industry is to avoid making the same mistakes, firms must place the highest priority on developing a clearer understanding of what the FCA requires of them and monitor existing and new products and services on an ongoing basis."
Richard Pike, market manager for Non-Financial Risk at Wolters Kluwer Financial Services, said: "Unless firms put in place a process to systemically identify potential conduct risks and risks of unfair treatments of customers across all products and business units, we can certainly expect the FCA to continue to make example of those firms who step out of line."
Wolters Kluwer Financial listed six key findings from the first year.
It said:
1. The FCA appears most concerned with enforcement actions against larger institutions through its substantial penalties rather than the masses, such as hedge funds, asset managers and IFAs.
2. "Tick box" compliance culture has been removed as the regulator now expects full transparency on transactions, internal processes and governance on demand.
3. The FCA's expectations have evolved over the past 12 months, moving away from regular routine compliance visits to more focused thematic reviews of which it has published 15.
4. The FCA is paying less attention to discussion papers, having only issued one so far and more on taking decisive and definitive action at an earlier stage.
5. The regulator has come good on its word to intervene earlier in institutions' product development, addressing root causes of problems for consumers, scrutinizing an institution's governance and how it designs, operates and sells products.
6. Despite the hard-line stance demonstrated by the FCA, institutions are still allowing breaches of its Principles of Business.
Today's release of research also showed the following key findings over the 12-month period:
• 45 financial penalties handed out in total by the FCA, less than the FSA in 2012.
• 135 enforcement actions of note issued by the FCA.
• 7,620 combined FCA/PRA Handbook pages updated.
• £310 million in fines handed to banks alone.
- 13 financial penalties issued for mis-selling, the most of any reason.
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