Enforcement action
Also called regulatory enforcement, disciplinary action
An enforcement action is a formal step a regulator takes against a firm or individual for breaking its rules. Outcomes include fines, public censure, bans from working in the industry, restrictions on business, restitution to customers and, in some cases, criminal prosecution. Most actions end in a published final notice or order.
How it works
Enforcement usually follows a supervisory finding, a whistleblower report, a suspicious transaction or a firm's own disclosure. The regulator opens an investigation, demands documents and interviews staff. Many cases settle. In the UK, early settlement earns a 30% discount on the financial penalty. Contested cases go to a decision-making committee and then to a tribunal or court.
Enforcement matters beyond the firm fined. Final notices set out the failings in detail and show what regulators expect of systems and controls. Compliance teams study them to test their own controls. Individuals face personal liability. UK senior managers can be fined or banned if they fail to take reasonable steps to prevent breaches in their areas.
The rules
Allows the FCA and PRA to impose financial penalties or public censure on firms and individuals that breach regulatory requirements.
FCA and PRA authorised firms and approved personsGives a 30% discount on the financial penalty for settlement agreed during the first stage of an investigation.
Firms and individuals subject to FCA enforcementRequires member states to give authorities administrative penalties for breaches, including fines of up to 10% of total annual net turnover.
EU credit institutions and their managementAllows the SEC to issue cease-and-desist orders against firms and individuals that violate securities laws, with civil penalties in administrative proceedings.
Persons violating US federal securities lawsCommon questions
What sanctions can financial regulators impose?
Common sanctions include fines, public censure, suspension of permissions, bans on individuals, orders to compensate customers and requirements to appoint independent monitors. Some regulators, including the FCA, can also bring criminal prosecutions for offences such as insider dealing.
How long does an enforcement investigation take?
It varies widely. Simple cases can close within a year. Complex cases involving large firms or contested facts often take several years. The FCA has said it aims to run fewer cases and close them faster.
Does the FCA name firms under investigation?
Usually not. The FCA kept its exceptional circumstances test for announcing investigations after consulting on a broader public interest test in 2024 and 2025. Outcomes are published once a case concludes with a final notice.
What is the difference between a consent order and a final notice?
A consent order is a US term for a settlement in which the firm agrees to sanctions and remedial actions without a contested hearing. A final notice is the UK document in which the FCA or PRA publishes the outcome of a case, settled or not.
