Information on enforcement investigations under SMR - June 2022

1. Since March 2016, how many enforcement investigations has the FCA commenced that deal (wholly or in part) with the way in which a firm has implemented some or all of the requirements of the Senior Managers and Certification Regime?
2. Please confirm how many of the investigations referred to in 1. above are current / still ongoing?
3. How many open enforcement cases does the FCA currently have which wholly or in part concern issues relating to non-financial misconduct (by which we mean issues relating to bullying, harassment, sexual misconduct and/or discrimination). Of these open enforcement cases, please specify how many of these investigations are into firms and how many are into individuals.
4. How many breaches of the FCA's Code of Conduct have been reported to the FCA using the FCA's Form H (REP008). Please provide this information broken down by the number of breaches of the FCA's Code of Conduct that were reported by firms to the FCA in (i) 2016, (ii) 2017, (iii) 2018, (iv) 2019, (v) 2020, and (vi) 2021. To be clear, we are not asking the FCA for details of these breaches, just for the number of breaches reported to it.

In considering the information set out below, please note the following:

• The Senior Managers and Certification Regime (SM&CR) has applied to Senior Manager Functions (SMFs) at UK banks, building societies, credit unions, branches of foreign banks operating in the UK and the largest investment firms regulated by the PRA and the FCA since 7 March 2016.
• SMFs at dual-regulated insurers (regulated by both the FCA and PRA) have been subject to the SM&CR since 10 December 2018.
• The SM&CR replaced the Approved Persons Regime (APER) for SMFs from 9 December 2019 for solo-regulated firms regulated by the FCA only.
• For banking firms, the FCA Code of Conduct (COCON) was extended to non-SMF staff from 07 March 2017. For insurance firms, COCON was extended to apply to non-SMF staff from 09 December 2019.  It was extended from 31 March 2021 for solo regulated firms.  The COCON rules apply to those staff that fall under the SM&CR.

Potential misconduct by individuals at firms prior to the dates listed above when the new regimes became effective is largely captured under APER.  In total, the FCA has 375 individuals under investigation for a range of potential breaches, including APER, COCON, Fitness and Propriety (FIT), and criminal misconduct.

1.   Since March 2016, how many enforcement investigations has the FCA commenced that deal (wholly or in part) with the way in which a firm has implemented some or all of the requirements of the Senior Managers and Certification Regime?

None.

2.  Please confirm how many of the investigations referred to in 1. above are current / still ongoing?

Not applicable.

3.   How many open enforcement cases does the FCA currently have which wholly or in part concern issues relating to non-financial misconduct (by which we mean issues relating to bullying, harassment, sexual misconduct and/or discrimination). Of these open enforcement cases, please specify how many of these investigations are into firms and how many are into individuals.

The FCA has opened 4 investigations into individuals, concerning issues of non-financial misconduct, since the SM&CR became effective.  Two of these investigations have closed and 2 are ongoing.

We would like to explain that, where you refer to ‘investigations’, we have taken this to mean investigations in which investigators have been formally appointed under section 168(2)(a) of the Financial Services and Markets Act 2000.  This number therefore does not include threshold conditions cases relating to non-financial misconduct.  The FCA’s Threshold Conditions Team have opened a further 10 investigations into non-financial misconduct, 4 of which are still ongoing.

4.  How many breaches of the FCA's Code of Conduct have been reported to the FCA using the FCA's Form H (REP008).  Please provide this information broken down by the number of breaches of the FCA's Code of Conduct that were reported by firms to the FCA in (i) 2016, (ii) 2017, (iii) 2018, (iv) 2019, (v) 2020, and (vi) 2021.  To be clear, we are not asking the FCA for details of these breaches, just for the number of breaches reported to it.

The data provided for each year is aligned to the reporting period end date of firms’ REP008 returns.  For example, data from a firm’s REP008 return with an annual reporting period ending on 31/08/2017 is reflected in the data provided for ‘2017’.

The data provided in the response to Q4 represents the number of individuals against whom disciplinary action has been taken for breaches of the conduct rules, as reported by FCA regulated firms through GABRIEL/RegData in their REP008 returns.  There are instances where firms have determined that behaviour by an individual constitutes a breach of multiple conduct rules.

We are unable to provide the total number of reported conduct rule breaches for each year as we do not hold the information in the format requested.  In order to comply with this part of your request, we would need to undertake a manual reconciliation and analysis of all the relevant records.  This would result in us creating new information, which we are not required to do under FOIA.