Financial Conduct Authority | The FCA’s Powers of Investigation & Enforcement Explained
The Financial Conduct Authority (FCA) regulates the financial services industry in the UK. Part of its remit is to oversee the conduct of institutions engaged in financial activity such as banks, lenders, financial advisers, sales companies, dealers and investors.
The FCA enjoys a wide range of powers in respect of investigation and enforcement which predominantly derive from the Financial Services and Markets Act 2000 (FSMA 2000) and the Financial Services Act 2012 (FSA).
The FCA’s enforcement powers cover criminal, civil and regulatory offences enabling it to impose financial penalties, criminal prosecution, public censure and the prohibition of individuals from carrying out regulated activities. We are experienced in acting for clients in both civil and criminal FCA investigations.
Nazaqat Maqsoom of KANGS comments upon these general powers.
What does the FCA investigate?
Sections 401 and 402 of the FSMA 2000 provide the FCA with a wide range of powers to take enforcement action against both firms and individuals who fail to meet its standards.
Activity that might cause a FCA investigation includes:
- carrying out any regulated activity, or purporting to do so, without being authorised or exempt,
- making false claims to be authorised or exempt,
- breaching restrictions on financial promotion,
- dealing etc. in transferable securities without an approved prospectus being made available to the public/insider trading/dealing,
- falsifying, destroying or disposing etc. of material or otherwise misleading the FCA,
- providing false or misleading information to an auditor or actuary,
- falsely or recklessly inducing another to enter or refrain from entering a relevant agreement,
- creating a false or misleading impression concerning the market, or price or value of relevant markets,
FCA General Enforcement Powers
The FCA, when considering enforcement action, takes into account any potential deterrent impact whilst seeking to:
- put customers’ needs first,
- deliver assertive action on market abuse,
- reduce and prevent financial crime.
When investigating suspected offences, the FCA works closely with other law enforcement agencies and overseas regulators. Interviews, which may involve another enforcement agency, such as the Police, will be in the form of one of:
- voluntary - not under caution,
- voluntary - under caution,
- under arrest and under caution,
- compelled under statutory powers
depending upon which is considered appropriate on a case -by -case basis by the FCA.
The FCA has the power to:
- apply for and execute search warrants,
- monitor and conduct surveillance operations,
- seek Freezing and Restraint Orders,
- seek injunctions,
- impose financial penalties,
- prohibit an individual from operating in financial services,
- prosecute firms and individuals who undertake regulated activities without authorisation.
Criminal Litigation and Convictions
The FCA therefore acts as its own independent with real and enforceable powers under statutory law to investigate and prosecute individuals and business alike.
In 2024/2025 the FCA issued fines of over £186.4 million to firms and individuals and secured several criminal convictions.
Whilst criminal prosecutions as opposed to civil cases are limited, such proceedings should not be understated. In 2024/2025, six confiscation orders pursuant to the Proceeds of Crime Act 2002 valued at £6.88 million were made against convicted defendants by the FCA.
How Can We Help in FCA Investigations?
When the FCA considers that there has been a breach of an FCA rule or requirement, or serious misconduct has occurred, they possess a wide range of powers to draw upon.
The FCA may serve upon an individual or firm a Notice of Appointment of Investigators under section 170 of Financial Services and Markets Act 2000, advising that proceedings are under way to investigate any suspicious activity.
However, such a Notice will not be served where there is a suspicion of criminal activity and any investigations being undertaken may be prejudiced by the service of such Notice.
Should you receive a Notice of Appointment or become aware of any form of investigation against you, it is absolutely essential that you seek immediate legal advice and guidance. Under no circumstances should you engage in any form of interview, whether voluntary or under caution without experienced legal assistance.
The team at KANGS provides extensive experience gained over many years from assisting clients faced with allegations of alleged financial impropriety of every conceivable nature. Our lawyers have established a nationwide reputation for excellence and are ranked Band 1 nationally by Chambers UK for their expertise in Financial Crime and Fraud Investigations.
Should you require our assistance, please do not hesitate to contact a member of our team who will be delighted to hear from you.
Tel: 0333 370 4333
Email: info@kangssolicitors.co.uk
We provide initial no obligation discussion at our three offices in London, Birmingham, and Manchester. Alternatively, discussions can be held through video conferencing or telephone.
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