On 20 December 2019, the FCA published a press release providing an update on its Financial Services Regulatory Partners Phoenixing Group.

The group, established in April 2019, aims to tackle the ongoing issue of ‘phoenixing’ in the financial services sector. Phoenixing in this context involves firms and individuals deliberately seeking to avoid their liabilities to consumers or poor conduct history by closing down firms – or resigning senior positions – only to re-emerge in a different legal entity.

Members of the group provided updates regarding their recent work using data analytics and machine learning to identify and predict phoenixing. The group intends to focus on these practices in the coming months, alongside improving processes for alerting one another to early indicators of firms that could be phoenixing.

In the last two months, the FCA reported that it had prevented phoenixing when two notices were issued warning firms that their applications would be refused because of concerns, leading to the withdrawal of their applications. In five other cases, one financial adviser and four financial advice firms withdrew their applications once the FCA discussed phoenixing concerns with them.

The group will next meet in May 2020.