On 9th February I joined Philip Allen of the BBA to deliver a webinar (click here to access the recording) entitled ‘‘Enforcement Update: What the Regulator wants and expects in 2017”. Some interesting polling occurred which can be read about in a separate blog.
The main Enforcement themes this year were identified as
• Financial Crime
• Individual accountability and culture
• MiFID II compliance
Secondary themes identified included supply chain risk management, including outsourcing and Market Abuse Regulation compliance (although this could be said to be included within financial crime). An additional area of risk was thought to be compliance with new Fixed Income, Currency and Commodities (FICC) Market Standards Board standards.
The themes were identified by reference to industry knowledge and what the FCA itself has said – in the 2016/17 business plan and, in a recent speech made by Enforcement Head Mark Steward. Reference was also made to the views of other industry participants on risks for 2017, most notably the Institute of Risk Managers, and Deloitte.
The only UK FCA case of the year so far, against Deutsche Bank for AML controls failings (netting them a fine of £163m a couple of weeks ago) was discussed. Further, whilst the webinar was in progress the PRA published their first case of the year. The Bank of Tokyo-Mitsubishi UFJ Limited was fined £17.58m and a fine of £8.925m was also levied on MUFG Securities EMEA plc because they failed to be open and cooperative with the PRA in relation to an enforcement action into BTMU by the New York Department of Financial Services.
Much industry discussion centring around the fall off in fines figures between 2015 and 2016 has speculated on a softening of approach to enforcement on the part of the Regulator. On 19th January Mark Steward forcibly dispelled any views of this nature when he said:
“Has light touch returned? Have we gone soft? For many of you today, the answer may be disappointing because it is a very clear ‘no’. We have not gone soft nor do we intend nor will we. Light touch has not returned”.