The Financial Conduct Authority is likely to open more investigations into believed wrongdoing when the senior managers regime has been fully extended, its director of investigations has said.
In a speech in London yesterday (15 June) Jamie Symington said the FCA needs an approach to investigation which will help embed the culture of the senior managers regime.
He said: “This means that generally where there are grounds for investigating a matter, there will be a need to investigate the role of senior management in the conduct issues that arise.
“It is inevitable that the implementation of this approach will lead to more investigations being opened.”
The senior managers regime currently applies to banks and deposit takers but will be extended to all other regulated firms, including financial advisers, in 2018.
Mr Symington said the increase in the number of investigations meant there were likely to be proportionately fewer which will progress to disciplinary enforcement action.
He said it was important for the regulated community to understand that investigations are not carried out because the FCA necessarily wants to take enforcement action.
Mr Symington said: “The perception is sometimes this: Investigation is what the FCA does when a matter is ‘in enforcement’. People assume that if a matter is ‘referred to enforcement’ then the FCA wants to take enforcement action.
“People fear that the investigation process then becomes simply the gathering of evidence to support FCA action.
“The problem with this dynamic is that it helps neither us nor firms to do our jobs properly.
“The point of an investigation is to find out what has happened. This job needs to be done by investigators who will act fairly and impartially without fear or favour in getting to the truth.
“When something has gone wrong, this should be as much a priority for the firm as it is for the regulator.”
He added that it is in firms’ best interests to help the FCA carry out its investigations quickly.
