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The FCA Annual Report for 2021/22: Enforcement highlights

With over 50 references to enforcement activity in the FCA’s latest Annual Report, there is no shortage of enforcement messages and statistics for us to analyse.

A more assertive regulator

Although enforcement is never the dominant theme that runs through the FCA’s Annual Reports, the references to enforcement in this year’s report were noticeably more assertive. 

For example, in the 2020/21 Annual Report, the FCA described its approach to enforcement as aiming to “achieve fair and just outcomes where we identify serious misconduct by firms or individuals in our remit in failing to act according to our rules and principles or other applicable requirements”. Fast-forward to this year’s Annual Report, and the tone is much more assertive with the FCA introducing its Enforcement function as “mak[ing] it clear that there are real and meaningful consequences for firms and individuals” with an “aim… to detect serious misconduct early so that we can intervene and prevent harm from happening or continuing”. 

The FCA has made no secret of the fact that it intends to become a bolder and more assertive regulator, and clearly this objective extends to how it sees its enforcement work as well. 

Enforcement cases and investigations

As at 31 March 2022, the FCA had 603 open cases (ie firms or individuals under investigation) relating to 230 separate investigations. The majority of these open investigations concern suspected unauthorised business (35%), but leaving that aside the FCA’s enforcement case portfolio is primarily focused on retail conduct (14%), insider dealing (12%), pension advice (10%), wholesale conduct (9%) and financial crime (8%). This is broadly consistent with where things stood at the end of the previous financial year, although the proportion of the FCA’s enforcement portfolio dedicated to wholesale conduct has increased slightly (+3%), whereas the proportion dedicated to financial crime has decreased slightly (-2%). 

The FCA opened 194 new enforcement cases in the last year, an increase of 55% compared with the previous financial year. Most of these new cases concerned suspected unauthorised business, but other areas where the FCA opened significant numbers of new enforcement cases include insider dealing, retail conduct, pensions advice, wholesale conduct and financial crime. 

This significant number of live cases and investigations are continuing against the backdrop of a shrinking Enforcement function. On average during the last financial year, the FCA had 625 staff, a drop of 11% in comparison to the previous financial year. Enforcement investigations are still lasting for an average of just short of 2.5 years, with 76 of the FCA’s current enforcement cases having been open for 800 or more days (or just over two years). 

The FCA’s Regulatory Decisions Committee

The FCA’s Regulatory Decisions Committee (RDC) has seen a significant 64% drop in the number of cases referred to it in the last financial year. This comes as no surprise as, following the FCA’s changes to its decision-making processes that came into force late last year, the RDC now deals with fewer categories of cases than it used to. The time it takes the RDC to consider cases has increased to an average of 10.6 months (up by 60%), reflecting the RDC’s focus on the more complex and time-consuming cases that it now considers. 

In the FCA’s Annual Report, the Chair of the RDC stated that he anticipates the RDC to be considering complex cases relating to pension advice, market abuse and firms’ anti-money laundering controls in the coming year. 

Skilled person reviews

Although not an enforcement tool, skilled person reviews can (in some cases) be precursors to enforcement activity, or at least provide a further indication of the key areas of supervisory and potential enforcement focus for the FCA. 

During the last financial year, the FCA commissioned 38 skilled person reviews, costing the firms subject to those reviews a total of £37.7 million. This represents a 44% drop in the number of skilled person reviews commissioned by the FCA in comparison with the previous financial year (and a drop of 36% in comparison to the year before that). 

The investment management sector topped the FCA’s list of the sectors required to commission skilled person reviews, with 11 reviews being commissioned in this sector during the last financial year. Financial crime and controls / risk management were the most popular areas scrutinised by skilled persons, with 11 skilled person reviews commissioned to look into each of those areas, followed by conduct of business (8) and governance and individual accountability (6). 


During the last financial year, the FCA received 1031 whistleblowing reports (15 less than the previous year) which raised 2114 separate allegations. However, only three of these whistleblowing reports resulted in what the FCA describes as “significant action to manage harm” including enforcement action, a skilled person review or the imposition of restrictions on a firm’s or individual’s authorisation. 

What next

Although the FCA’s Annual Report is not intended to focus on crystal ball gazing or horizon-scanning (unlike the FCA’s Business Plan), it does contain some hints about future areas of enforcement activity including: market conduct (specifically insider dealing and market manipulation), ESG disclosures, pension advice and firms’ financial crime systems and controls.