FCA Launches Bold Five-Year Enforcement Strategy to Combat Market Abuse
The UK Financial Conduct Authority (FCA) has recently introduced a comprehensive five-year strategy aimed at tackling market abuse, enhancing financial crime enforcement, and bolstering economic resilience. This ambitious plan, revealed on April 29, 2025, by Therese Chambers, the joint executive director of enforcement and market oversight, seeks to position the FCA as a more transparent and effective regulator.
Key Objectives of the FCA’s Strategy
Therese Chambers emphasized that addressing market abuse is central to the FCA’s overall mission. In her address, she stated, “Our work on market abuse is a critical part of all areas of that strategy.” The FCA’s approach will be guided by a framework known as the ‘three Ps’: predictable, proportionate, and purposeful, ensuring that enforcement processes are fair, targeted, and impactful.
Streamlining Compliance and Surveillance
A significant aspect of the FCA’s initiative is to reduce compliance burdens for financial firms while maintaining market integrity. Key plans include:
- Simplifying transaction reporting processes.
- Balancing robust surveillance with practical implementation strategies.
This dual focus aims to facilitate easier compliance for firms while ensuring that market integrity is not compromised.
Addressing Organised Crime and Market Abuse
Chambers identified organised crime groups (OCGs) as a substantial threat, contributing to approximately 25% of suspicious activity reports submitted to the FCA. The regulator plans to enhance its efforts by:
- Increasing the use of data analytics.
- Fostering multi-agency cooperation.
- Executing targeted arrests to dismantle insider dealing networks.
The Role of Financial Firms
Firms have a crucial role as the first line of defence against market abuse. Chambers highlighted the importance of collaboration with the FCA, stating, “We cannot complete the market integrity jigsaw without you.” Open communication and proactive engagement with the FCA will be vital for firms to uphold market integrity.
Consequences of Non-Compliance
The FCA has issued a clear warning: failing to meet regulatory expectations will lead to serious repercussions. The agency is prepared to utilize its full enforcement powers, which may include:
- Issuing significant fines.
- Imposing bans on individuals or firms.
- Restricting business activities to deter wrongdoing.
Combatting Deliberate Leaks in M&A Activity
Chambers also addressed the rising issue of deliberate leaks, particularly related to mergers and acquisitions (M&A). Sharing confidential deal information with the media prior to official announcements is viewed as a severe violation of market conduct. Such actions not only distort competition but also pose substantial reputational and regulatory risks for firms. To combat this, the FCA and the Takeover Panel are intensifying their joint investigations into these practices.
Encouraging Stronger Internal Controls
To support the FCA’s agenda, firms are urged to bolster their internal controls and surveillance mechanisms. Essential steps include:
- Timely submission of Suspicious Transaction and Order Reports (STORs).
- Active participation in upcoming FCA consultations.
- Commitment to the three Ps framework for compliance.
Chambers’ address serves both as a call to action and a warning: firms must take decisive action to avoid being held accountable for failures that could jeopardize the integrity of UK financial markets.
For further details on the FCA’s strategy, visit RegTech Analyst.
