What consequence do firms face for repeated non-compliance under FCA rules?

Firms that repeatedly fail to comply with Financial Conduct Authority (FCA) rules face serious consequences, which can include undergoing investigations and potentially facing restrictions. The FCA takes non-compliance seriously, particularly when it occurs repeatedly. This indicates a systemic issue within the firm’s operations or governance, prompting the FCA to step in to protect consumers and maintain market integrity.

Investigations may involve a deep dive into the firm’s practices, and if non-compliance is substantiated, the firm might be subjected to additional regulatory scrutiny, regulatory actions, or restrictions on their operations. This could manifest as limitations on the products or services they can offer, or in more severe cases, a revocation of their permissions to operate.

This approach serves as a deterrent against repeat offenses and encourages firms to establish robust compliance measures. Unlike a small fine, which might not sufficiently incentivize a change in behavior, investigations and restrictions have a more significant impact on a firm's ability to operate in the market, thereby emphasizing the importance the FCA places on adherence to regulations and stakeholder protection.