FCA Director Outlines Regulator’s New Approach to Investigations in Post-Crisis Era

As the financial meltdown of 2008 recedes further into the past, the necessity of retaining and acting upon the lessons of that debacle remains undiminished. The Financial Conduct Authority (FCA), which is responsible for the orderly and stable functioning of the U.K.’s financial markets – and by extension plays a crucial role in maintaining global economic stability – cannot accomplish its tasks if investment funds and other financial firms misconstrue the regulator’s role. One of the most common misperceptions is that any inquiry made by the FCA’s investigators is either part of, or a prelude to, an enforcement action and protracted litigation. As the FCA’s role evolves from crisis-response mode into that of a risk monitor with as vast a responsibility as it has ever had, carrying out highly selective enforcement actions where appropriate, fund managers and other market participants must grasp what the FCA currently does and understand the purpose and tenor of FCA investigations. All these points came across in a recent speech delivered by Jamie Symington, the FCA’s Director of Investigations, at the Legal Week Banking Litigation and Regulation Forum. This article summarizes Symington’s remarks. For a summary of a recent FCA discussion paper, see “FCA Outlines Priorities of Liquidity and Fair Practices for Open-End Funds Investing in Illiquid Assets” (Mar. 16, 2017). See also “FCA Details Three of Its 2017 Priorities: Competition in the Asset Management Market, Liquidity Management and Custodians” (May 4, 2017).

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