The UK’s
Financial Conduct Authority (FCA) announced a major reform of its enforcement
disclosure procedures today (Monday), implementing broader document review
standards and enhanced staff training protocols in response to a recent Upper
Tribunal recommendation.
FCA Overhauls Enforcement
Disclosure Process Following Tribunal Recommendation
The
regulatory overhaul comes after the case against three former employees of
Julius Baer earlier this year, where the Upper Tribunal highlighted the need
for a comprehensive review of the FCA’s disclosure practices in enforcement
cases.
“Under
our new broader approach, we will disclose all material that is relevant to the
facts of the matter, save where it is disproportionate, not in the public
interest, or otherwise inappropriate to do so,” the FCA commented. “This will
include all material that is potentially undermining as well as supportive
material.”
Key changes
include a more expansive document review methodology, specialized training
programs for disclosure management teams, and revised performance metrics that
emphasize the importance of thorough disclosure practices. The regulator will
now disclose all relevant case materials, except where such disclosure would be
disproportionate or against public interest.
The FCA has
also introduced clearer guidelines defining staff roles and responsibilities in
the disclosure process, coupled with enhanced quality assurance measures. These
reforms aim to provide stronger support for case teams while maintaining
regulatory effectiveness.
The
regulator plans to evaluate the effectiveness of these changes through a
follow-up review in late 2025, demonstrating its commitment to continuous
improvement in enforcement procedures.
It’s another adjustment following last week’s sweeping revisions to bond and derivatives market transparency rules, marking the most extensive regulatory overhaul since Brexit. The UK is working to strengthen London’s role as a global financial hub.
“We want UK markets to be efficient and to support economic growth,” said Jon Relleen, director of supervision, policy and competition at the FCA. “Putting more information in the hands of investors and giving investment firms greater access to research to inform their strategies will bolster UK markets.”
What Was the “Seiler,
Whitestone and Raitzin” Case About
The Court
of Appeal recently concluded a significant case involving the FCA and three
former Julius Baer Group employees: Thomas Seiler, Louise Whitestone, and
Gustavo Raitzin. The case originated from the FCA’s
£18 million fine against Julius Baer International Limited in February 2022,
followed by prohibition orders against the three individuals.
At the
heart of the dispute were allegations concerning Julius Baer’s dealings with a
Yukos oil and gas company representative, involving “finder’s fees”
paid through inflated foreign exchange transaction charges. The FCA claimed the
individuals lacked integrity by recklessly disregarding potential fund
misappropriation risks. However, the Upper Tribunal disagreed with the FCA’s
assessment and criticized the regulator’s investigation methods.
The FCA
faced particular scrutiny for its handling of evidence, specifically its
failure to call relevant witnesses and its problematic management of the
“Third FX Transaction,” where the regulator had presented incorrect
factual information when it initially issued its warning notice to the parties.
The Upper
Tribunal’s criticism extended to the FCA’s press release about the case, which
it described as “nothing short of disgraceful.” The Court of Appeal
ultimately upheld the Tribunal’s costs order against the FCA, marking a
significant setback for the regulator’s enforcement approach.
The UK’s
Financial Conduct Authority (FCA) announced a major reform of its enforcement
disclosure procedures today (Monday), implementing broader document review
standards and enhanced staff training protocols in response to a recent Upper
Tribunal recommendation.
FCA Overhauls Enforcement
Disclosure Process Following Tribunal Recommendation
The
regulatory overhaul comes after the case against three former employees of
Julius Baer earlier this year, where the Upper Tribunal highlighted the need
for a comprehensive review of the FCA’s disclosure practices in enforcement
cases.
“Under
our new broader approach, we will disclose all material that is relevant to the
facts of the matter, save where it is disproportionate, not in the public
interest, or otherwise inappropriate to do so,” the FCA commented. “This will
include all material that is potentially undermining as well as supportive
material.”
Key changes
include a more expansive document review methodology, specialized training
programs for disclosure management teams, and revised performance metrics that
emphasize the importance of thorough disclosure practices. The regulator will
now disclose all relevant case materials, except where such disclosure would be
disproportionate or against public interest.
The FCA has
also introduced clearer guidelines defining staff roles and responsibilities in
the disclosure process, coupled with enhanced quality assurance measures. These
reforms aim to provide stronger support for case teams while maintaining
regulatory effectiveness.
The
regulator plans to evaluate the effectiveness of these changes through a
follow-up review in late 2025, demonstrating its commitment to continuous
improvement in enforcement procedures.
It’s another adjustment following last week’s sweeping revisions to bond and derivatives market transparency rules, marking the most extensive regulatory overhaul since Brexit. The UK is working to strengthen London’s role as a global financial hub.
“We want UK markets to be efficient and to support economic growth,” said Jon Relleen, director of supervision, policy and competition at the FCA. “Putting more information in the hands of investors and giving investment firms greater access to research to inform their strategies will bolster UK markets.”
What Was the “Seiler,
Whitestone and Raitzin” Case About
The Court
of Appeal recently concluded a significant case involving the FCA and three
former Julius Baer Group employees: Thomas Seiler, Louise Whitestone, and
Gustavo Raitzin. The case originated from the FCA’s
£18 million fine against Julius Baer International Limited in February 2022,
followed by prohibition orders against the three individuals.
At the
heart of the dispute were allegations concerning Julius Baer’s dealings with a
Yukos oil and gas company representative, involving “finder’s fees”
paid through inflated foreign exchange transaction charges. The FCA claimed the
individuals lacked integrity by recklessly disregarding potential fund
misappropriation risks. However, the Upper Tribunal disagreed with the FCA’s
assessment and criticized the regulator’s investigation methods.
The FCA
faced particular scrutiny for its handling of evidence, specifically its
failure to call relevant witnesses and its problematic management of the
“Third FX Transaction,” where the regulator had presented incorrect
factual information when it initially issued its warning notice to the parties.
The Upper
Tribunal’s criticism extended to the FCA’s press release about the case, which
it described as “nothing short of disgraceful.” The Court of Appeal
ultimately upheld the Tribunal’s costs order against the FCA, marking a
significant setback for the regulator’s enforcement approach.
This post is originally published on FINANCEMAGNATES.
