UK Financial Regulator FCA Closes 100 Investigations and Slashes Oversight Activities in 2024
- Why is the FCA Closing So Many Investigations?
- How Does Enforcement Activity Compare to Previous Years?
- What's Driving This Regulatory Shift?
- How Does the FCA's Approach Compare to the SEC's?
- What Does This Mean for Financial Markets?
- What's Next for UK Financial Regulation?
- Frequently Asked Questions
The UK's Financial Conduct Authority (FCA) has significantly scaled back its regulatory activities, closing 100 ongoing investigations and shifting focus to high-impact cases. This strategic pivot mirrors similar moves by the US SEC, as both agencies face political pressure to support economic growth while maintaining selective enforcement. Despite fewer cases, the FCA has increased enforcement actions, issuing 41 penalties in 2024—nearly double its historical average. The regulator now prioritizes clear-cut violations, particularly in anti-money laundering, with notable fines against Nationwide (£44M) and Barclays (£39M). Meanwhile, a new crypto asset regulatory framework looms for 2027, signaling evolving priorities in financial oversight.
Why is the FCA Closing So Many Investigations?
The Financial Conduct Authority has shuttered 100 cases without action since 2023, reducing active investigations from 230 in 2022 to just 124 by October 2024. This dramatic pullback reflects a deliberate strategy shift under co-directors Therese Chambers and Steve Smart, who took leadership of the enforcement division in mid-2023. Rather than casting a wide net, the FCA now targets cases with clear evidence and high potential for impactful outcomes. Between April and November 2023, the agency completed 24 investigations—nine closed without action and 15 resulting in enforcement. The speed of resolution has improved dramatically, with seven cases concluding within 16 months compared to the historical 42-month average.
How Does Enforcement Activity Compare to Previous Years?
While case numbers have dropped, enforcement intensity hasn't. The FCA issued 41 penalties in 2024 and 33 in 2025, surpassing its typical annual range of 20-25 actions. This paradox of fewer but stronger interventions reflects what London financial lawyers describe as a "surgical strike" approach. The regulator opened just 23 new investigations in March 2025—less than half previous years' volumes—but made each count. Anti-money laundering violations dominated the penalty landscape, with Nationwide and Barclays absorbing massive fines totaling £83 million. "They're no longer opening cases just for exploratory purposes," notes Trac Dovaston of Pallas Partners, observing the FCA's more focused strategy.
What's Driving This Regulatory Shift?
Political winds are reshaping financial oversight globally. The UK government has pressured the FCA to ease business restrictions, hoping to stimulate an economy still recovering from post-pandemic challenges. This aligns with trends across the Atlantic, where the SEC under the Biden administration has dropped about 60% of crypto-related cases initiated during the TRUMP era. Both agencies frame these changes as efficiency improvements rather than deregulation. "We're concentrating resources where risks are highest," an FCA spokesperson explained, while the SEC emphasizes targeting "the most serious misconduct." Lorraine Johnston of Ashurst LLP observes that despite maintaining a "strong enforcement culture," the FCA's caseload will likely continue shrinking.
How Does the FCA's Approach Compare to the SEC's?
The transatlantic regulatory sync is striking. Like the FCA, the SEC has reduced audit inspections and enforcement actions after years of aggressive posture. Both agencies now emphasize "quality over quantity," though their public statements stress maintaining robust oversight. The SEC's retreat from crypto enforcement—a sector it once pursued vigorously—parallels the FCA's selective case selection. Interestingly, while scaling back in some areas, both regulators are expanding into new territories: the SEC has intensified climate disclosure requirements, while the FCA prepares to oversee crypto asset providers starting in 2027 and professional services' anti-money laundering compliance.
What Does This Mean for Financial Markets?
The regulatory recalibration creates both opportunities and risks. Businesses face less routine scrutiny but stiffer penalties for violations. The FCA's faster case resolution—now averaging 16 months versus 42—reduces regulatory uncertainty. However, the focus on "clear-cut" cases may let borderline practices flourish temporarily. Crypto firms in particular may benefit from the lighter touch, though the 2027 regulatory framework could bring dramatic changes. As BTCC analysts note, "The enforcement slowdown doesn't mean a free pass—it just changes how companies need to manage compliance risks."
What's Next for UK Financial Regulation?
All eyes are on the FCA's evolving crypto oversight role. The 2027 framework will introduce rules addressing non-financial misconduct like bullying and harassment—an unusual expansion of financial regulators' scope. Meanwhile, the enforcement division's "impact-focused" approach appears entrenched. With just 23 new cases opened in early 2025 versus 50+ in prior years, the FCA seems committed to its quality-over-quantity philosophy. As one City of London lawyer quipped, "They've traded their shotgun for a sniper rifle—fewer shots, but each one counts."
Frequently Asked Questions
How many investigations has the FCA closed recently?
The FCA closed 100 investigations without action between 2023-2024, reducing its active caseload from 230 to 124.
Are enforcement penalties decreasing?
No—while cases have dropped, penalties increased to 41 in 2024, nearly double the historical average of 20-25 annually.
How fast does the FCA resolve cases now?
Seven recent cases concluded within 16 months, compared to the previous 42-month average resolution time.
Is the SEC making similar changes?
Yes—the SEC has dropped about 60% of crypto cases and reduced audit inspections, mirroring the FCA's strategic shift.
When will new crypto regulations take effect?
The FCA's comprehensive crypto asset framework begins in 2027, with some conduct rules starting in 2026.
