June 4, 2025

FCA Publishes Final Policy Position on Announcing Enforcement Investigations

Charlotte Collins, Anna James, Andrea Monks, Rob Moulton, Nell Perks

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Latham & Watkins LLP

The regulator has dropped its proposed “public interest” test, but will take certain aspects of its proposals forwards.

On 3 June 2025, the FCA published its final policy (PS25/5) on announcing enforcement investigations, along with its updated Enforcement Guide, ending a rather turbulent consultation process.

The FCA issued two consultations on these proposals — in February 2024 and November 2024 — after the reaction to the first consultation showed that the FCA could not go ahead with its original proposals (see these Latham blog posts on the first and second consultations for further detail). Following almost unprecedented pushback from industry and government, the FCA announced in March 2025 that it would not be taking forward the main proposal to introduce a public interest test for announcing enforcement investigations (see this Latham blog post). However, it is taking forward some aspects of the proposals, including publicising investigations in certain limited circumstances and wider changes to the Enforcement Guide. The new Enforcement Guide applies from 3 June 2025, and the changes to announcing investigations apply to investigations launched on or after 3 June 2025.

Announcing Enforcement Investigations

The FCA confirms that it will retain the existing “exceptional circumstances” test rather than introducing a new public interest test. Its proposals proved untenable following harsh criticism from the government, culminating in the House of Lords Financial Services Regulation Committee publishing its report “Naming and shaming: how not to regulate”. Many respondents indicated that the exceptional circumstances test ought to give the FCA sufficient powers to announce in the situations it was looking to address. It is hard to say that the FCA is gracious in its defeat here; the Policy Statement reads as surprisingly defensive and the FCA sounds like it still supports its original proposals.

Despite its climb down on the public interest test, the FCA plans to pursue a policy of increased transparency in the following situations, for which it stresses there is “broad support”:

Reactively confirming investigations that are officially announced by a firm, an affiliated company, or a regulatory body, government, or public body (whether in the UK or overseas). The FCA would also be able to confirm the nature of the investigation, to the extent this has also been made public. The FCA explains that such announcements are likely to take the form of a confirmatory statement on its website, by its press office, or in response to a parliamentary request for information.
Making public announcements in relation to the potentially unlawful activities of unregulated firms, including unlawful financial promotions, and regulated firms operating outside the regulatory perimeter. The FCA might make an announcement when considered desirable to warn or alert consumers or investors, or to help the investigation.
Publishing greater detail of issues under investigation anonymously to educate the industry about the types of conduct under investigation, or to encourage compliance with regulatory requirements. The FCA seems to be considering options for the form this might take.

The FCA explains that the stage of an investigation at which it decides to announce information will depend on the investigation in question. It will look to take a decision at the start, and then will keep this under review if it decides not to announce straight away. The form in which it shares information may also vary, and the FCA is considering that it might show any announcements on the Financial Services Register, Warning List, or the new Firm Checker tool. Although the FCA has not produced a mark-up of the whole Enforcement Guide, it has helpfully produced a mark-up of its investigation publicity policy, which we have replicated below for ease of reference.

Other Changes to the Enforcement Guide

This element of the consultation was rather overshadowed by the strength of reaction to the proposed new approach to announcing investigations. Nevertheless, the FCA proposed some significant changes to the Enforcement Guide more generally, aiming to streamline and update the content. The Guide ran to over 300 pages, and so the FCA wanted to remove duplicative content and make it more concise and accessible. Key changes include the following:

Moving certain information about its broader strategic approach to enforcement to the FCA website
Deleting wording that repeats legislation
Deleting aspects that are duplicated in the Decision Procedure and Penalties Manual (DEPP)
Moving or reducing content that is more about supervision than enforcement

While the FCA reports that it received general support for these changes, many respondents did not agree with the FCA’s proposal that it would not consult on future changes to the Enforcement Guide. Although the FCA is technically not required to do so, it has historically consulted on all changes to the Guide. In light of this feedback, the FCA confirmed that it will continue its practice of consulting on changes to the Enforcement Guide. Some respondents also opposed the FCA putting more information on its website, as they considered it would be helpful to have all of the relevant information on enforcement in one place. However, the FCA is keeping these changes. Notably, any website material would not be subject to consultation if changed in the future.

The original proposals contained some specific important amendments, including the following:

The FCA indicated that it may refuse the attendance of a particular legal advisor when interviewing a person, if the advisor’s attendance may reasonably be assessed as potentially prejudicing the investigation or any other ongoing investigation. Despite respondents’ concerns that this might unjustly restrict witnesses from using the same advisor as the firm under investigation, the FCA has kept this change. The industry is likely to keep a close eye on the FCA’s approach to exercising this power.
The FCA proposed to clarify the basis on which it will accept reports provided on a limited waiver basis, stating, “The FCA will accept reports over which legal privilege is asserted without agreeing the fact or extent to which it is legally privileged”. In light of concerns that this could encourage firms to waive privilege or suggest the FCA takes a negative view of firms that do not waive privilege, the FCA states that it has clarified the drafting. However, it seems that the FCA has simply removed the sentence “In those circumstances, the firm may choose to provide the report on a limited waiver basis to the FCA – ie, on the basis that it may assert legal privilege as grounds for non-disclosure to a party other than the FCA”.
The regulator proposed that a Director in Enforcement or an Executive Director could decide to apply to the court to commence civil proceedings. The FCA rebuffs suggestions this would dilute its processes and has kept this change, but stresses that decisions to commence criminal prosecutions will continue to be made at Executive Director level.
The FCA suggested it would move to deciding whether to hold scoping meetings on a case-by-case basis, and respondents were concerned this meant it planned to hold scoping discussions less often. The FCA has kept this change to the wording, but expressly confirms that it would generally have a scoping meeting when investigation subjects specifically request one.
The FCA proposed to delete the content on private warnings, as it considers that it should not use private warnings as an enforcement tool in circumstances in which it cannot be more publicly transparent about the issues concerned. Although some respondents argued that private warnings are a useful tool, the FCA highlights that it has not used them for some time and uses other ways of communicating with firms and individuals when it has concerns. Therefore, it has maintained this change.

Unhelpfully, the original consultation did not provide a mark-up of the Guide, and some respondents commented that it was difficult to comment without seeing the detail of what was changing. Although the FCA has not produced a mark-up of the whole Enforcement Guide, Annex 3 to the Policy Statement includes a table setting out which content has been moved or deleted, to aid readers with understanding the changes.

Annex — Mark-up of the FCA’s Enforcement Investigation Publicity Policy

ENFG 4.1 Publicity during FCA investigations

ENFG 4.1.1	The FCA will not normally make public the fact that it is or is not investigating a particular matter, or any of the findings or conclusions of an investigation except as described in other sections of this chapter. The following paragraphs deal with the ~~exceptional~~ circumstances in which the FCA may make a public announcement that it is or is not investigating a particular matter.
ENFG 4.1.2	The principal test is that described in ENFG 4.1.4 to ENFG 4.1.5 (the exceptional circumstances test). Notwithstanding this, the FCA may also make announcements concerning suspected unauthorised activity or a suspected criminal offence in relation to unregulated activity as set out in ENFG 4.1.6, reactive announcements as set out in ENFG 4.1.7 and anonymous announcements as set out in ENFG 4.1.8. Any announcement will be subject to the restriction on disclosure of confidential information in section 348 of the Act and restrictions imposed by data protection legislation and other applicable statutory restrictions.
ENFG 4.1.3	Where the matter in question has occurred in the context of a takeover bid, and the following circumstances apply, the FCA may make a public announcement that it is not investigating, and does not propose to investigate, the matter. Those circumstances are where the FCA: (1) has not appointed, and does not propose to appoint, investigators; and (2) considers (following discussion with the Takeover Panel) that such an announcement is appropriate in the interests of preventing or eliminating public uncertainty, speculation or rumour.
ENFG 4.1.4	Where it is investigating any matter, the FCA will, in exceptional circumstances, make a public announcement that it is doing so if it considers such an announcement is desirable to: (1) maintain public confidence in the financial system or the market; or (2) protect consumers or investors; or (3) prevent widespread malpractice; or (4) help the investigation itself, for example by bringing forward witnesses; or (5) maintain the smooth operation of the market. In deciding whether to make an announcement, the FCA will consider the potential prejudice that it believes may be caused to any persons who are, or who are likely to be, a subject of the investigation.
ENFG 4.1.5	The exceptional circumstances referred to above may arise where the matters under investigation have become the subject of public concern, speculation or rumour. In this case it may be desirable for the FCA to make public the fact of its investigation in order to allay concern, or contain the speculation or rumour. Where the matter in question relates to a takeover bid, the FCA will discuss any announcement beforehand with the Takeover Panel. ~~Any announcement will be subject to the restriction on disclosure of confidential information in section 348 of the Act.~~
ENFG 4.1.6	Where the FCA is investigating suspected unauthorised activity or a suspected criminal offence in relation to an unregulated activity there are often concerns around consumer harm and the FCA generally has no supervisory, intervention or oversight powers to protect relevant consumers. The FCA may make public that it is investigating a named person for suspected unauthorised activity or for a suspected criminal offence in relation to an unregulated activity if it considers such an announcement is desirable for the purpose of warning or alerting consumers or investors, or to help the investigation itself, for example by bringing forward witnesses. In deciding whether to make an announcement, the FCA will consider the potential prejudice that it believes may be caused to any persons who are, or who are likely to be, a subject of the investigation. [New Glossary definition of “unauthorised activity” is as follows: “Any activity in breach of section 21 of the Act or carried out in breach of a statutory requirement for authorisation by, or registration with, the FCA or PRA.”]
ENFG 4.1.7	The FCA may make a public announcement confirming that it is investigating a named person if that fact has already been made public by that person, an affiliated company or a regulatory body, government or public body. The FCA’s announcement may also confirm the subject matter of the investigation to the extent that it has already been made public in that manner.
ENFG 4.1.8	The FCA may make public that it is investigating a particular matter without naming or otherwise identifying the subject of the investigation, where it is desirable for the purpose of educating persons generally as to the types of conduct that the FCA is investigating or to encourage compliance with the FCA’s rules or other requirements.
ENFG 4.1.9	The FCA will not normally publish details of the information found or conclusions reached during its investigations. In many cases, statutory restrictions on the disclosure of information obtained by the FCA in the course of exercising its functions are likely to prevent publication (see section 348 of the Act). In exceptional circumstances, and where it is not prevented from doing so, the FCA may publish details. Circumstances in which it may do so include those where the fact that the FCA is investigating has been made public, by the FCA or otherwise, and the FCA subsequently concludes that the concerns that prompted the investigation were unwarranted. This is particularly so if the firm under investigation wishes the FCA to clarify the matter.

Source: FCA

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