If a decision is not referred to the Upper Tribunal, a final notice will then be issued to the subject and published on the FCA's website. The FCA can also issue a public statement after a warning notice has been given, although it does not always do so.
What steps the FCA takes to get there
The FCA's investigation process is lengthy, but the subject of the investigation is involved throughout.
The FCA begins by appointing investigators to the case, and the subject may be sent a notice of appointment of these investigations if appropriate – although, whether sent notice or not, the subject will become aware of the investigation at the next stage, the ‘scoping discussion’.
This is instigated by the FCA and is where it sits down with the subject of the investigation and explains the process, why they have appointed investigators, the scope of the investigation and what is likely to happen, and give a rough timeline, which can of course vary depending on the scope.
Then the investigation begins. This involves evidence being collected including interviews, documents, transaction records and communications relevant to the case.
Once the investigation is complete, the subject will receive a summary of the investigators' findings, before the FCA presents the subject with options to resolve the issues. There are financial incentives for early resolution.
Otherwise, if it not resolved, then, as said above, the FCA recommends a warning notice to the RDC who can, where appropriate, decide to submit a warning notice to the subject.
Implications of receiving a warning notice
Receiving a warning notice from the FCA is very serious and is not to be taken lightly.
There are profound implications to receiving a warning notice, which signifies the FCA is prepared to take enforcement action, such as imposing financial public censure, restrictions on business activities, or banning individuals from the industry.
However, it is only an indication of action to be taken and not the final decision. The FCA uses warnings as a pressure point to encourage subjects to resolution, allowing them to deliver quicker regulatory decisions and actions, and reducing the risk of formal appeals against decisions, including judicial review.
The subject of the warning can fully comply with the FCA and work with them to reach a resolution, which will secure a 30 per cent discount to any financial penalty, and has the attraction of speed and certainty.
Or the subject can choose to contest the case partly or wholly within the RDC process, or escalate to the Upper Tribunal.
The FCA's ability to publish information relating to warning notices is a significant part of its enforcement process, resulting in serious reputational consequences as it is likely to attract a considerable amount of media attention.
