The watchdog says it took action because the firms failed to reach its minimum standards.

In its Annual Report & Accounts 2022-2023 published today, the FCA said in the coming year it would continue to work to protect consumers but would also seek to support competition across the financial services sector, now part of its remit. 

The FCA has also published the first set of performance statistics  from the first year of its 3-year strategy (see below for links).  

During the year ended March the FCA:

• Imposed 24 financial penalties on firms and individuals -  double the number in previous years.

• It opened 158 intervention cases and 51 cases using our its own initiative powers.

• Launched criminal proceedings against 16 individuals for offences including insider dealing, money laundering and fraud.

• Outlined a redress package worth up to £235m pounds to over 300,000 investors who lost out when the Woodford Equity Income Fund (WEIF) was suspended because of failures by Link Fund Solutions in its management of the fund.

• As of 1 April, the FCA said it had 589 investigations open covering issues like market abuse and investment scams.

While there was a rise in enforcement, overall there were fewer victims of investment fraud in 2022 compared with 2021 (3.5% fewer), although the value of losses was up by 6.8%. 

The FCA said it had taken a strong stance on appointed representatives (ARs) with the result being a 19% drop in ARs since 2020 from 43,000 to 35,000 now. Between July 2022 and 31 March the FCA said its actions resulted in principals terminating relationships with 153 ARs and 618 IARs (Introduced Appointed Representatives).

Ashley Alder, the new chair of the FCA, said: “Maintaining high standards is key to supporting growth. We are helping firms test their innovative products, guiding firms through the authorisation process and are supporting a range of supply and demand-side market reforms. 

“On the 31 July, the new Consumer Duty will raise the bar for retail financial services and place good consumer outcomes at the heart of everything they do.” 

Nikhil Rathi, chief executive of the FCA, said: “The FCA has evolved into a more proactive, assertive and data-led regulator better equipped to face challenges like the rising cost of living in a more agile and effective way." 

In terms of striving to reduce harm the FCA says it is:  

• Scanning 100,000 websites a day looking for unlawful activity and protecting the public from over 8,500 potentially misleading adverts in 2022, 14 times more than in 2021.   

• Imposing financial penalties of £215.8 million.

• Working with other law enforcement agencies to intervene against illegal crypto activity, including acting against crypto ATMs operating without FCA authorisation. 

The FCA said its new Consumer Duty requirements, coming into force on 31 July, will mean, “firing the starting gun on the most far-reaching consumer protection intervention for decades that places consumers at the heart of retail financial services.”

The FCA says it also plans to introduce stronger rules to help tackle misleading adverts that encourage investing in high-risk products and helping less experienced investors make well-informed decisions and avoid unaffordable risk through its £11 million InvestSmart campaign.  

An achievement over the past year, the FCA said, was bringing down the authorisation caseload by 60% from a peak of 12,500 cases in December 2021 to 5,500 as of the end of March. Applications for regulated status continue to be scrutinised carefully, the regulator said, with 1 in 4 applications rejected or withdrawn for not being good enough. 

FCA documents published today:

Today the FCA has published: 

• Annual Report and Accounts 
• Outcomes and metrics report
• Operating service metrics  
• Enforcement data
• Response to HMT remit letter   
• Updates to our perimeter report  
• Pay gap data and diversity report
• Our Positive Impact report 2023
• Our Positive Impact report 2022 
• Net zero transition plan
• FCA Practitioner Panel survey results
• Modern Slavery and Human Trafficking Statement
• Market cleanliness statistics