On Tuesday the UK’s Financial Conduct Authority (FCA) issued an updated version of its Enforcement Guide, which will now be referred to as ‘ENFG’ in the FCA Handbook, to distinguish it from the previous version. The ENFG is now in force and will apply to all FCA enforcement investigations launched on or after 3 June 2025.
Background to the revision
This update aimed to “streamline and update" the ENFG, which was introduced in 2007 and had become increasingly voluminous (if not unwieldy) over time. The FCA has trimmed over 250 pages in the process, removing content that was duplicative, outdated, or insufficiently focused on enforcement. The regulator anticipates that these changes will make it easier for firms to access key information and bring greater clarity and transparency to the investigation and enforcement process.
The update follows a two stage consultation, which began in February 2024 (i.e. CP 24/2 and CP 24/2: Part 2) and was accompanied by a Policy Statement (PS25/5) setting out the FCA’s consultation response.
Key changes of note
1) A rather public ‘publicity policy’ U-turn
The FCA’s policy on publicising investigations has changed in some important ways, but not as much as the FCA had initially hoped. Following widespread concern and significant criticism during the consultation, the FCA has abandoned its proposal to name regulated firms under investigation based on a (wide and arguably subjective) ‘public interest’ test – a reversal first announced in the FCA’s letter to the Treasury Select Committee in March 2025.
This means that the pre-existing ‘exceptional circumstances’ test remains, albeit with three new ‘additional circumstances’ in which investigations may be announced. The FCA reasons that it has “broad support for increased transparency in these three areas”, which will enable the regulator to:
- Announce and name the subjects of investigations into suspected unauthorised activity or criminal offences related to unregulated activity
- This will include investigations into suspected breaches of the financial promotions regime, and will occur when the FCA considers that publicity will either serve to avoid harm by highlighting or warning consumers and investors about the firm in question, or might assist their investigation in some way, including by encouraging witnesses/whistleblowers to make contact.
- Provide reactive announcements/confirmations that it is investigating in specific circumstances
- This will include cases where the fact of the investigation has entered the public domain and the FCA’s response will avoid misunderstanding about the action it is taking. This will include situations where the subject of the investigation, an associated firm, or another regulatory, government, or public body has already publicised the investigation, and the FCA has indicated that it is unlikely to apply in response to general media reports or queries.
- Publish information about investigations on an anonymised basis
- This will enable the FCA to publicise investigations without naming or identifying the subject firm when it considers that doing so would have a deterrent or educational effect, by helping firms to understand areas of active enforcement and promote compliance with FCA rules in those area(s).
The position of individuals remains unchanged – given the specific legal considerations and scope for significant harm involved in sharing information about individuals under investigation, the FCA will not generally announce these.
What impact will this have?
In practice, these publicity policy changes will affect only firms engaging in unauthorised activity: unauthorised firms or authorised firms carrying out unauthorised business may now find themselves in the headlines when investigated.
A broader consequence may be an uptick in anonymised investigation announcements designed to serve a deterrent or educational purpose. Given the FCA’s expectation that firms constantly monitor and use regulatory updates to shape their risk management systems and controls accordingly, it will be important to pay close attention to these announcements and document any assessments and consequential changes.
2) Clarification on lawyers’ attendance at compelled interviews
The FCA has followed through on its proposal to clarify its policy on legal advisers’ attendance at compelled interviews. In short, it has left itself considerable discretion to refuse permission where the FCA determines that a legal adviser's attendance may create potential conflicts of interest or otherwise prejudice any FCA investigation (e.g. by stifling the discussion or rendering interviewees less candid).
Despite acknowledging that legal advisers have their own professional duties to manage conflicts of interest, the FCA is firm in its policy that while interviewees are generally permitted to be accompanied by a legal adviser who acts for them, it may refuse the attendance of legal advisers who are acting for multiple parties (e.g. lawyers acting for the firm as well as the employee being interviewed). The decision will fall to the enforcement case team and take into account “all the relevant circumstances,” which may include information that cannot be disclosed (and thus challenged), such as “who is or who might be placed under investigation.”
What impact will this have?
This revision effectively formalises the FCA’s existing approach – the regulator has increasingly pushed back on joint legal advisers’ attendance at interviews, with the result that many firms are accustomed to providing for employees to have independent legal counsel ahead of compelled interviews and making appropriate arrangements for joint or common interest privilege.
3) Accepting firm-commissioned reports on a limited waiver basis
The FCA has also formalised its general approach to firms’ legally privileged reports. The FCA is clear that it will accept these reports on a limited waiver basis, but without:
- Agreeing the fact or extent to which they are legally privileged, or
- Accepting any condition or stipulation that purports to restrict its ability to use the information in exercising its statutory functions (e.g. a requirement that the report be used only for the purposes of supervision and not enforcement).
What impact will this have?
Again, this effectively formalises the FCA’s current approach – it does not mean that privileged material provided to the FCA is unprotected, and the FCA remains subject to strict statutory restrictions on the disclosure of confidential information. In response to concerns that the ENFG revisions may be interpreted as pressuring firms into disclosing privileged material, or otherwise indicate that the FCA will look dimly on firms who decline to waive privilege, the FCA specifically noted in its Policy Statement that there is no obligation to share legally privileged material with the FCA and that it does not consider that the ENFG undermines a firm’s ability to resist disclosure of a report to a third party.
4) Additional decision-makers and clarification that scoping meetings are optional
The FCA has expanded the population of senior personnel who can decide on whether to start civil and criminal enforcement proceedings – previously this was limited to Executive Directors, but now Directors in Enforcement will also have that power. The FCA notes that the identity of the decision-maker will depend on the nature of the case, and it expects decisions on criminal prosecutions will be taken at Executive Director level. The FCA has also expressly stated in the ENFG that it will decide whether to hold scoping meetings at the start of an investigation on a case-by-case basis, rather than by default or as a starting presumption. The ENFG is clear that it is (and was always) the FCA’s intention to have a scoping meeting where the subjects request or indicate that they would like to have one.
What impact will this have?
These provisions will have little discernible impact; the extension of powers to Directors in Enforcement may lead to speedier, more agile decision-making, while ensuring that criminal prosecutions are decided at appropriate levels of seniority. Practitioners will no doubt also welcome the clarity around what has become an increasingly flexible approach to scoping discussions at the start of investigations.
5) No more private warnings, preliminary investigation reports, or preliminary findings letters
The FCA has deleted references to private warnings in the ENFG and confirmed that, having not used them for some time, they will not be used as an enforcement tool in the future. The FCA reasoned that they lack the transparency of other tools and – despite not being (or having been intended as) a determination of whether the recipient had actually breached FCA rules – they could have significant reputational impact. Instead, the FCA will raise the issues with the firm or individual in direct communications. The FCA similarly deleted outdated references to what they used to call preliminary findings letters and preliminary investigation reports, since it has changed the form in which appointed investigators make investigation reports to the FCA.
What impact will this have?
This is a worthwhile clarification, which will have no impact in practice.
6) Moving detail to other parts of the FCA Handbook
Some of the content of the previous Enforcement Guide has been transplanted into other parts of the FCA Handbook. By way of example, detail concerning the FCA’s powers to impose a variation, cancel a permission, impose requirements on its own initiative, and intervene against incoming firms has moved from what was Chapter 8 to the Supervision Manual (SUP 6B), which also contained information about those powers. The regulator pointed out that although they may use these powers in an enforcement investigation, they are generally supervisory powers (i.e. they do not require opening an investigation) and it is thus best to have all guidance on how they use the powers in one place, in SUP. Other transplants have gone to the Decision Procedure and Penalties Manual (DEPP), including as regards Regulatory Decisions Committee (RDC) processes (from Chapter 14) and settlement processes and discounts (from Chapter 5). The FCA cites these as examples of avoiding duplication and refocusing the ENFG on key enforcement-related policy points.
What impact will this have?
This is a logical simplification and re-organisation of the ENFG, in particular, and FCA guidance more generally, and will have no practical impact.
Final thoughts
The revision to the ENFG is further evidence of the FCA working to meet its strategic objectives in supporting and driving economic growth by being ‘smarter’ (i.e. more efficient and effective) in the way it goes about protecting consumers, fighting financial crime, and upholding market integrity through regulation and enforcement, while reducing barriers to UK markets’ competitiveness, as recently set out in its 2025-30 Strategy, published on 25 March 2025.
The FCA used the Policy Statement (PS25/5) accompanying ENFG to underscore its ‘smarter’ approach and highlight that it has significantly increased the pace and focus of its enforcement efforts, noting, for example, that:
- Five of its recent investigations closed with a public outcome in under 16 months, is significantly faster than the average length of 42 months in 2023/24;
- The number of open operations has fallen by over 35% since 1 April 2023; and
- None of the investigations opened into regulated firms since April 2023 has closed without further action.
The Enforcement Guide is available in the FCA Handbook, here.
