Information on 10% depreciation notifications from February 2020 - January 2022

I am writing in connection with the recent note on 10% depreciation notifications: further extension of temporary measures for firms[1].

Please provide the following information:

1. From 20 February 2020 until the date this request is answered, the number of investigations opened by the FCA into potential breaches of COBS 16A.4.3 UK.
2. The results of any of these investigations.
3. Any estimates as to the number of individual investors affected by these breaches. If possible please break this figure down into retail and professional investors.
4. Over the same period, any further information on the volume of 10% drop reports set to investors by firms, or any other aggregate data that can be obtained on COBS 16A.4.3 UK compliance from the FCA's supervision.

Part A, B and C

We cannot identify any investigations responsive to this request but please note that our systems primarily record breaches of the FCA’s Principles (the primary focus of most enforcement investigations) as opposed to more granular breaches such as COBS 16A.4.3.

Part D

Over the period specified, other than the initial market volatility in March 2020 when supervisory flexibility was applied, market conditions have not necessitated requirements for further 10% drop notifications.

The FCA does not collect aggregate data on COBS 16A.4.3 UK compliance and it is not an FCA requirement for firms to inform the FCA of reports sent to investors. Firms must still pay due regards to the interests of their customers and treat them fairly (Principle 6), pay due regard to the information needs of their clients, and communicate information to them in a way which is clear, fair and not misleading (Principle 7).  

If we have concerns that potential serious misconduct may cause (or has caused) significant harm to consumers, then we will consider the appropriate response, which may include opening an investigation.