Blog
Motor finance: FCA drives towards formal redress scheme
Jill Lorimer
We are market-leading advisers who provide intelligent and tactical representation for individuals and companies in the financial services industry under FCA scrutiny for criminal or regulatory matters. In particular, we advise on FCA enforcement matters, supervisory interventions, and contested approvals.
Enforcement: Our contentious financial services team has an outstanding record over many years in defending authorised firms and senior individuals facing FCA action for alleged breaches of rules and Principles. As the FCA increases its focus on non-financial misconduct, increasing numbers of firms are coming under the spotlight. We advise from pre-investigation through to the Regulatory Decisions Committee (RDC) stage and, where appropriate, the Upper Tribunal. Our client base reflects the breadth of the regulated sector, including wealth management, hedge funds, private banking and consumer credit firms.
We also advise individuals caught up in insider dealing and market abuse allegations, both professional traders and private individuals. We have vast experience in advising those who receive pre-investigation enquiry letters from the FCA, and we are one of the few teams in the country with a strong track record in successfully defending these allegations in the criminal courts where necessary.
FCA supervisory intervention: The FCA has a suite of tools at its disposal for mitigating harms arising from non-compliance with its rules, including the ability to unilaterally remove a firm’s permissions and/or to impose requirements such as the freezing of assets and the imposition of wide-ranging restrictions on a firm’s regulated and unregulated activities.
We provide pragmatic and tactical advice to regulated firms and their senior managers on their ongoing regulatory obligations and can respond quickly to the use of intervention powers by the FCA.
Click here to read our Fca supervisory intervention faqs
Contested approvals: We advise firms whose applications for FCA authorisation or registration are not progressing as they wished. We also advise firms and individuals in respect of senior manager applications where the FCA has pushed back. Often our clients have been invited by the FCA to withdraw their applications. Generally we find that close engagement with the regulator is the key to unlocking these applications; sometimes, the best course is to proceed along the contested route. We have established an impressive track record of securing approvals for our clients so that they can move forward with their business or career.
If any issue arises between you or your firm and the FCA, contact us as soon as possible.
How we can help
We are well-placed to help across the entire range of contentious issues you may face as an individual or firm in the regulated financial services sector, including:
- Advising on suspected regulatory breaches including the FCA’s Principles for business (PRIN), statements of principle for approved persons (APER) and conduct rules (COCON), as well as notification requirements and AML rules.
- Advising individuals on their obligations as certified persons or Senior Managers, and acting on all SMCR-related issues including attestations and disclosability of current / previous criminal or regulatory matters, and in relation to internal fitness and propriety investigations.
- Assisting where the FCA has suggested you apply for a voluntary requirement to be imposed on your regulatory permission, including on the scope and consequences of such requirements as well as on alternative solutions.
- Advising how best to respond to requests from the FCA including pre-investigation enquiries and formal information requirements.
- Advising on how to minimise the risk of you or your firm being referred to Enforcement, and where matters do proceed for investigation, we can provide a seamless service in guiding you through the investigative process.
- Attending your premises when the FCA conducts visits, either without notice or with notice, and ensuring that these are conducted appropriately and lawfully.
- Providing representation to those who are requested to attend an interview under caution by the FCA as a suspect and those subject to compelled interviews as a potential witness.
- Assisting with the process of skilled person appointment and overseeing the conduct of any such review.
- Acting on serious cases of market abuse, insider dealing and other financial crime offences.
- Representing those at risk of warning or decision notices facing RDC and Upper Tribunal enforcement proceedings; and help with settlement negotiations and remediation where appropriate.
- Acting in multi-jurisdictional investigations, involving not only the FCA but also the US Department of Justice (DOJ), the Securities and Exchange Commission (SEC) and other international regulators and prosecutors.
Our approach
Our wealth of experience in dealing with investigations by the FCA and other agencies means we are trusted advisers in this area.
Very often we will have worked on similar issues before. However, we will always recommend the best strategy for your unique circumstances.
A number of our team have spent time working at agencies such as the FCA, and so we understand the process and drivers from the other side of the fence. Yet we are equally aware that the financial services industry is ever changing with new products and market trends to consider in applying our judgement of the law.
Sometimes it may be in your interests to cooperate with the regulator, whereas in other cases we may recommend pushing back. Sometimes, the best strategy is to do nothing and to adopt a purely reactive approach. But, in every case, we provide regulatory and criminal law expertise that is both pragmatic and strategic. We have an excellent record of obtaining positive outcomes in challenging situations.
We bring in our employment law and reputation management colleagues as necessary, and work with other equally experienced professionals, including counsel, forensic accountants and compliance consultants as required to ensure that your interests are protected.
what clients and directories say about us
Jill Lorimer is a star. Her no-nonsense, quiet authority is brilliant for dealing with potentially difficult situations. She knows FCA work inside-out and is one of the very best."
Legal 500
Anna Holmes is a dependable and conscientious lawyer, and very diligent in getting the right outcome for her clients."
Legal 500
The best crime team in London as far as I am concerned."
Legal 500 UK
The client service provided was fantastic throughout and I felt that the team went out of its way to ensure that my needs were proactively addressed.”
Chambers UK
The team has a great deal of legal knowledge and expertise - we are very pleased with the service and the advice we have received."
Chambers UK
Great coverage of Financial services from a regulatory and criminal angle."
Legal 500 UK
A premier outfit for individuals under regulatory investigations."
Chambers UK
Caroline Day
Partner
Nicola Finnerty
Partner
Jonathan Grimes
Partner
Louise Hodges
Partner and Head of Department
Julie Matheson
Partner
Gemma Tombs
Legal Director
Anna Holmes
Senior Associate
Latest blogs & news
New UK crypto regime takes a step closer
HM Treasury has published a draft statutory instrument which, when brought into force, will introduce a new regulatory regime for cryptoassets in the UK.
Is the FCA’s name and shame policy now dead in the water?
On 6 February the House of Lords Financial Services Regulation Committee published its response to the latest iteration of the FCA’s proposals to “name and shame” firms under investigation by the regulator.
Finfluencers – in the FCA’s sights
In March 2024 the FCA published a clear warning to those advertising trading and investments on social media about the risks of doing so, making it clear that it will “will take action against those touting financial products illegally.” Just two months later, in May 2024, the regulator announced that it had commenced criminal proceedings against a number of individuals for advertising foreign trading schemes on their social media platforms.
Motor finance: FCA drives towards formal redress scheme
The FCA is conducting a review into whether motor finance customers were overcharged as a result of the widespread use of discretionary commission arrangements in the motor finance industry. It had expected to set out its next steps in light of this review in September 2024. However, it has announced that it will not now do so until May 2025.
Market abuse letters - an increasingly used tool
Maintaining the integrity and cleanliness of the financial markets remains a key FCA priority and, indeed, is a statutory legal obligation on the regulator. Against that, however, is the fact that FCA’s track record in taking enforcement action against insider dealing and other forms of abusive behaviour is relatively poor. Since 2017 it has only achieved three criminal convictions for insider dealing, whilst its record for imposing civil fines on firms and individuals for breaches of the Market Abuse Regulation (“MAR”) is also unimpressive.
FCA's Anti-Greenwashing Rule Takes Effect: What It Means for Compliance and ESG Accountability
The FCA’s long awaited anti-greenwashing rule came into force on 31 May 2024. This rule is part of the wider Sustainability Disclosure Requirements regime and reflects the FCA’s strong commitment to ESG and to supporting the Government’s commitment to achieving net zero by 2050.
FCA’s plan to “name and shame” firms should be urgently reconsidered
The FCA’s recent consultation (CP24/2) on changes to its enforcement process has provoked what appears to be unanimous opposition from government and industry bodies. Of particular concern is the proposal in consultation paper (“the CP”) that the FCA will publish information about its enforcement investigations, including the identity of the subject of the investigation, where it assesses it to be in the public interest to do so.
Immigration issues and the regulatory consequences for financial services firms
For firms regulated by the Financial Conduct Authority (FCA), it is vital that the business – and its relevant employees – ensure that its conduct is without reproach in order to avoid supervisory or regulatory difficulties. This extends to issues of governance and administrative matters, as well as more obvious issues of conduct (such as, for example, financial misconduct) which often receive more press.
Bankers’ bonuses uncapped
This article first featured in Employee Benefits in November 2023.
Three recent cases raise questions over FCA enforcement strategy
A recent sequence of adverse decisions by the Upper Tribunal could have significant implications for future Financial Conduct Authority cases.
The senior managers certification regime (SMCR) – fitness and propriety
Under the Senior Managers and Certification Regime (“SMCR”), which was introduced by the Financial Conduct Authority (“FCA”) to seek to remedy perceived industry wide failings following the 2008 financial crash, regulated staff must meet certain standards of fitness and propriety and will be personally accountable to the FCA for any failure to do so.
Firms covered by the SMCR are required to assess, both at the point of recruitment and on an annual basis, whether SMCR staff are fit and proper to perform their role. In the case of senior managers, firms that are covered by the regime must also seek approval from the FCA prior to appointment and in many cases the FCA may wish to closely scrutinise any such application.
Non-financial misconduct under the Senior Managers and Certification Regime
Non-financial misconduct has been an area of increasing regulatory focus for the Financial Conduct Authority (FCA) over the last five years. To date, published regulatory outcomes have focused on the most egregious end of the spectrum, with the FCA handing out bans and fines for those already convicted in the criminal courts of serious sexual offences. However, these cases provide little guidance for FCA-regulated firms grappling with allegations of more nuanced conduct, such as the inappropriate use of social media on a personal
Deadline looms for previously passported firms to apply for UK authorisation
Pre-Brexit, some 8,000 financial services firms based in the EA or EEA relied on the mutual passporting regime to do business in the UK. Since 1 January 2021, such firms have been able to operate under a transitional temporary permissions regime (TPR). While some of those firms have now exited the UK market, most of those intending to continue to operate here are required to apply for full UK authorisation. The deadline for applications is 31 December 2022.
The FCA’s new regulatory approach to consumer protection
The FCA’s transformation to becoming an assertive, front footed regulator has been accelerated by three recent developments, all of which prioritise the protection of consumers.
FCA Enforcement Half Year Update: H1 2022
This half-year update provides an overview of recent enforcement activity by the Financial Conduct Authority (“FCA”) in the period from January to June 2022.
The FCA and consumer credit: Update
As the cost of living continues to rise, and subsequent demand for credit increases, the FCA has been clear with lenders as to its expectations for their treatment of customers. Indeed, with inflation predicated to reach 14%, consumers will see a significant reduction in disposable income and many may experience financial vulnerability for the first time. In this context, the FCA has clearly identified that a potential increase in dependence on credit poses significant risks to consumers.
Regulatory compliance, trust and confidence in the financial services sector
In a case that attracted national media coverage and emphasises the crucial importance of regulatory compliance and the highest standards of professional conduct in the financial services sector, the High Court dismissed a breach of contract claim brought by an investment manager.
Keeping the crypto market on its toes? The FCA publishes latest cryptoasset consumer research and takes regulatory action against Binance Markets Limited
For the fourth year the FCA has published research on the changing relationship between consumers and cryptoassets. In spite of the pandemic, the strong upward trend in public engagement and media coverage has continued, with the FCA estimating 2.3 million adults now hold cryptoassets.
The discontinuation of LIBOR and phasing in of SONIA in the Sterling Markets, what do we know so far?
Global financial markets are preparing to transition away from the use of the London Interbank Offered Rate (“LIBOR”) and adopt an appropriate alternative risk free rate (“RFR”) by the end of 2021. What are the reasons for the move away from LIBOR, the progress to date in terms of identifying the Sterling Overnight Index Average (“SONIA”) as the most appropriate alternative rate in the Sterling markets, and the steps still required to be taken to ensure such markets are ready for the phasing out of LIBOR by the end of the year
Breach of 2002 banking undertakings - the CMA writes to Danske Bank
At the end of last month, the Competition and Markets Authority (CMA) published a letter written to Danske Bank concerning its breach of the Small and Medium-sized Enterprise (SME) Banking Behavioural Undertakings 2002, following loans it had offered under the ‘Bounce Back Loan Scheme’.
