RDC cases fall by two thirds
The specialist financial services regulatory consultancy found that the number of such breaches had fallen from 56 in 2013 to just 23 in 2014.
Bovill said that in recent years the FCA has been forced to focus its efforts on major lengthy and complex investigations, such as those relating to the manipulation of foreign exchange markets and the LIBOR benchmark, reducing the time and resources available to devote to initiating and investigating smaller cases.
If an FCA disciplinary investigation or its findings are contested by the firm concerned, the Regulatory Decisions Committee – as a committee of the FCA – has the responsibility to make the final decision on whether a breach occurred and, if so, decide on an appropriate penalty.
Bovill explains that while the RDC makes evidence-based decisions on a case by case basis, it is not an independent tribunal.
Rebecca Thorpe, principal at Bovill, said: “The FCA is focussing the majority of its resources on high profile, but very time-consuming and labour intensive cases, such as Forex and LIBOR manipulation, many of those investigations involve multiple organisations which takes away resources from other essential FCA work.”
“Where once, the regulator would concentrate mostly on investigating the specific, factual details of a breach, the high profile scandals of the last few years have prompted a concerted effort to uncover the root causes behind each offence.
“There is now greater emphasis towards a more exhaustive review of whether wider practices or systems within a firm played a part.”
“The Forex probe is still in the pipeline, so it appears that this log-jam may well continue in the short term.
“However, there is always the chance that a lull will give the FCA the opportunity to cast a wider net and re-focus its attention on smaller cases – this will then have an impact on the number and make-up of cases put before the RDC.”