The FCA has published a speech given by Jamie Symington (Director of Enforcement (Wholesale, Unauthorised Business and Intelligence), FCA). The speech is entitled Internal investigations by firms (i.e. investigations undertaken by firms of their own affairs when things have gone wrong, either at their own initiative or through agreement with the FCA).
Key points in Mr Symington’s speech include:
- if internal investigations are to play a useful role, clearly the regulator cannot – and cannot be seen – naively to accept firms’ reports and conclusions. This is not how the FCA works;
- it is imperative that the FCA’s ability to take enforcement action is not prejudiced. Whether and how a firm investigates internally must now be looked at from the point of view of whether doing so will assist or inhibit the FCA’s investigation;
- the bottom line is that the FCA encourages firms to be alive to the possibility that their own investigation could prejudice or hinder a subsequent FCA investigation. It’s crucial that the firm discusses this with the FCA before taking action;
- where there are conduct concerns that a firm expects the FCA to investigate, it should engage with the regulator at an early stage. That way some ground rules can be discussed and agreed if the firm is considering doing or commissioning an internal investigation; and
- transparency is important. The methodology of the investigation is critical. If the FCA cannot gain proper access to and records of the firm’s investigation, then it is of little use to it, and indeed may be of little use to the firm. The FCA may have to reinvestigate the matter itself. The process takes longer and the firm cannot expect credit for that.
View Internal investigations by firms, 5 November 2015