FCA announces it has elevated Financial Crime to key status

FCA announces it has elevated Financial Crime to key status


Author: Jeremy Bouch

Applies to: UK wide

The FCA published its Business Plan which sets out to Parliament, consumers and regulated firms the areas where the FCA resources will be focussed. The main development is that Financial Crime has now become one of the seven important areas of FCA focus.

Financial Crime has always been high on the FCA agenda as evidenced by sanctions imposed for failures to take reasonable care to establish and maintain effective systems and controls for countering the risks of bribery and corruption through to failings in respect of G10 spot FX voice trading and LIBOR.

However over the last year we have heard regular press reports asserting a clear lack of financial crime compliance culture and standards of due diligence both nationally and internationally by firms regulated by the FCA.

Crucially negative commentary has not been limited to a handful of firms but instead it has been levelled at the industry as a whole and the fact that firms supervised by the FCA now face multi-jurisdictional investigations suggesting that they have been used as conduits for drug kingpins, rogue nations, fraudsters and those embarked on the wholesale avoidance of tax clearly undermines confidence in the UK financial system and put its integrity at risk.

This lies behind Financial Crime now appearing firmly in the FCA sights as previous enforcement action has not acted as a sufficient enough deterrent.

The FCA has recently made it abundantly clear that whilst they will continue to take action against firms that fail to implement the necessary systems and controls to prevent financial crime in all its guises now more than ever they will hold senior management to account for failure to guard against it and as seen in the Bank of Beirut Final Notice the FCA will take decisive action against those who mislead them in relation to financial crime systems and controls.

Firms and those in significant influence roles should act now to analyse gaps in compliance and take appropriate remedial action.