The FCA is set to escalate the number of investigations into suspected wrongdoing once the EU's senior managers regime (SMR) has been fully implemented next year, although these will not necessarily lead to enforcement actions, according to the regulator's director of investigations.
In a 15 June speech, Jamie Symington said the FCA needs an approach to investigation which will help embed the culture of the SMR.
"This means that generally where there are grounds for investigating a matter, there will be a need to investigate the role of senior management in the conduct issues that arise," he said.
"It is inevitable that the implementation of this approach will lead to more investigations being opened."
At present, SMR only applies to banks and deposit takers, but it will be extended to all other regulated firms, including financial advisers, in 2018.
But Symington added the increase in the volume of investigations meant there were likely to be proportionately fewer leading to disciplinary enforcement action.
He stressed the FCA's main priority in any investigation was not necessarily to take enforcement action.
"The perception is sometimes this: investigation is what the FCA does when a matter is ‘in enforcement'," said Symington. "People assume that if a matter is ‘referred to enforcement' then the FCA wants to take enforcement action.
"People fear that the investigation process then becomes simply the gathering of evidence to support FCA action.
"The problem with this dynamic is that it helps neither us nor firms to do our jobs properly.
"The point of an investigation is to find out what has happened. This job needs to be done by investigators who will act fairly and impartially without fear or favour in getting to the truth.
"When something has gone wrong, this should be as much a priority for the firm as it is for the regulator."
He added that it is in firms' best interests to help the FCA carry out its investigations quickly.
Commenting on the speech, Monique Melis, managing director and service line head, regulatory consulting at Duff & Phelps, said that the growing number of investigations is likely to lead to "even more intense scrutiny on individuals".
"Though individuals will remain firmly under the spotlight this year, with both the Libor and FX scandals resolved the regulator has softened its approach to enforcement action on big business," he said. "The days of colossal fines are therefore behind us - for the moment at least.
"That said, people should sit up and take notice of Mr Symington's speech as there is little to suggest that there won't be severe consequences for those who don't follow the rules."
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