The FCA has outlined how it plans to address serious failings of standards in firms and detailed its new approach called 'Enhanced Supervision'.
The regulator has published a statement which it said applies to all firms and should be read in conjunction with the FCA's supervisory approach documents.
Enhanced Supervision is a formalisation of how the FCA supervises in practice.
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It said: "Our supervisory approach is focused on the root causes of failings in firms.
"Where a serious failure of standards poses a risk to our objectives, and our normal approach may not enable us to tackle these issues in a timely way, the firm will be made formally subject to Enhanced Supervision.
"We expect this to occur only in exceptional cases."
Key features of the approach will be:
• a review of the supervisory strategy
• where necessary, the FCA will require formal commitments from the firm's board to address underlying issues
• consideration of the use of other tools and powers, including the imposition of requirements under s55L of FSMA (OIREQ)

The FCA said in its report: "We set clear expectations that firms are required to not only to comply with the letter of our rules but run their businesses in a manner consistent with our operational objectives.
"We expect firms to have a culture that places customers and market integrity at the heart of their business. Culture is evidenced through the way firms conduct their business, what firms expect of staff, and their attitude towards customers.
"It is for firms to determine what culture is appropriate for them and to demonstrate that culture from the top down.
"We want firms to be commercially successful. But business models and strategies should not aim to maximise profit at the expense of customers, who should get products and services that meet their needs."

The regulator added: "It is for firms to decide what business model and strategy is appropriate for them. We expect firms to demonstrate how they identify, assess and mitigate strategic risks.
"The governance of firms, through senior management and boards, plays a key role in determining business models, strategies and business practices, and ensuring appropriate systems and controls are in place.
"We expect boards to clearly explain to us the conduct risks within their strategies, and we pay close attention to the way they implement consumer and market-focused values."

The statement, which can be read in full HERE, also explains how the recommendations of the Parliamentary Commission on Banking Standards in respect of 'Special Measures' are achieved through the FCA's supervisory approach.