Beyond The Headlines: FCA Sets Out Its Full-spectrum Approach To Fighting Financial Crime

As the lines between enforcement and supervision blur, interactions with the FCA require even more care. 

Therese Chambers, Joint Executive Director of Enforcement and Market Oversight, delivered a speech at the 22nd Annual IBA Anti-Corruption Conference on 17 June 2026, setting out how the FCA's approach to combating financial crime is evolving beyond traditional enforcement. 

Using every tool available 

Emphasising that enforcement extends beyond headline-grabbing fines and prosecutions, Chambers explained that the FCA is increasingly resorting to its wider toolkit. Reflecting on an approach that has developed over the last 2 to 3 years,  she explained the FCA’s aim is to intervene early to stop harm before it escalates, imposing or agreeing requirements with firms, deploying skilled persons to conduct reviews, and also using its market oversight tool kit. She gave examples, including: 

• In one case, the FCA paused approval of a prospectus it suspected was designed to facilitate a pump-and-dump scheme, prompting the company to abandon its fundraising entirely within two weeks and without any press release.
• In a second example, the FCA imposed own-initiative requirements (an OIREQ) on an authorised e-money firm which was found to have inadequate client files, improperly downgraded high-risk clients and admitted a client subject to a multi-million dollar fine. The firm did not challenge the decision, which Chambers claimed meant the harm was stopped quietly, without a fine or prosecution. 

The speech also highlighted the global dimension of financial crime. Chambers referred to  the FCA working closely with BaFin, the US Department of Justice and the Monetary Authority of Singapore, and noted the FCA's active contribution to IOSCO's Committee on Enforcement and the Exchange of Information. Domestically, the FCA is running a joint taskforce with the Information Commissioner's Office, the Advertising Standards Authority and the Solicitors Regulation Authority focused on motor finance and claims management company conduct, with two firms currently confirmed to be under investigation.

Firms need to evolve to meet the FCA’s approach 

FCA data releases over the past few years back-up Chambers’ comments about the use of supervisory tools as an alternative to full enforcement. She referred to firms having recourse to legal or procedural protections, but ‘in many cases’ acquiesce to the FCA’s request to ‘voluntarily’ co-operate. This almost throwaway line in the speech does not reflect the stark choice firms face when faced with the FCA inviting them to ‘voluntarily’ request, for example, requirements on or a variation of its permissions. 

If a firm refuses, the FCA will inevitably impose an OIREQ, with a referral to the Upper Tribunal a firm’s only ability to challenge potentially severe restrictions on its business. Prior to reforms brought in by the FCA in 2021 (see FCA PS21/16), any decision to impose an OIREQ required approval from the FCA’s Regulatory Decisions Committee, which provided firms an opportunity to advocate against (or for alternative measures) in a private forum. In contrast, a referral to the Upper Tribunal will usually mean there is a public hearing, which means firms need to weigh up whether they are prepared to have often sensitive issues aired in public as part of any challenge to the FCA’s decision.  

Certainly, firms that have regular engagement with the FCA (sometimes called ‘fixed portfolio firms’) tend to approach supervisory engagement with a different mindset to enforcement engagement. When engaging with supervisory teams, maintaining and improving relationship capital for the long term is typically prioritised.  Almost as a matter of practice, firms may be reluctant to challenge the deployment of what are broadly understood as ‘supervisory tools’.  However, given the changing approach which the FCA is taking, it is time for firms to really scrutinise how they respond to supervisory interventions. 

In the last financial year, the FCA saw a total of 369 voluntary outcomes across its regulated community of circa 40,000 firms and around 1,720 listed issuers; the FCA only had to exercise formal powers in 13 cases (some 3% of the proposed voluntary outcomes) where firms declined to accept the outcome proposed.  According to Chambers, the support of the FCA’s Interventions Team was required for those 13 cases and about one third of the rest, typically the more complex cases. With this very low level of challenge from firms, it is unsurprising that the FCA is looking to the deployment of supervisory tools (backed by the credible threat of enforcement) rather than immediately launching full-scale (expensive) enforcement investigations against authorised firms. 

Chambers also mentioned the use of what could be called soft tools such as ‘a conversation, letter or targeted visit’. In general, the use of tools which require less public disclosure raises questions, for example, about regulatory accountability and how consistency of decision-making within the FCA is established and maintained. 

It is undeniable that financial crime is becoming increasingly complex, frequently technology-facilitated, which risks widespread harm, and that the FCA faces a considerable challenge in responding effectively and timeously to those circumstances. Whilst it is welcomed that the regulator is proactively seeking to meet this challenge, its significant powers (or the threat to use such powers) should only be used where appropriate and the FCA should be prepared to engage reasonably with firms where there may be alternative ways to achieve this outcome. As a result, firms must also consider how they need to change in response to the FCA’s evolution. 

Overall, firms need to carefully consider both the immediate and the longer-term strategic implications the FCA’s changing approach, including the potential for the pendulum to swing back away from formal and soft supervisory tools at some point in the future.  Some may recall use of ‘private warnings’, which arose out of practice rather than being a statutory enforcement tool. Use of these as an enforcement tool effectively ceased in 2017 following responses to the FCA's Our Mission 2017 which raised issues of transparency and fairness.¹ Their aim, the FCA said, had been to make the firm or individual aware that the issues were sufficiently serious for FCA to consider a disciplinary sanction such as a public censure or fine, even though it had not made a formal decision to do so.  

Firms may find it sensible to update their internal policies, governance arrangements and procedures in response to the potential for more FCA supervisory interventions, including accounting for both the use of formal tools such as requirements or soft tools such as letters and conversations. In the case of soft tools, firms should maintain good records to support any actions which has been taken in response.

Footnote

1 Private Warnings were formally removed from the Enforcement Guide in 2025 (see PS25/5).