Regulatory investigations and enforcement: Key developments

This article was originally published in Insurance Day on September 10, 2025.

The past six months have seen a number of key changes in the regulatory investigations and enforcement space. Whilst many of the themes from the published enforcement outcomes are continuations from previous years, the approach to enforcement is evolving and there are some significant new requirements to be aware of - we set out our top five takeaways from recent developments below.

1. Continued streamlining of the FCA enforcement portfolio and use of supervisory powers

The Financial Conduct Authority (FCA) is continuing to focus on speeding up its investigations, doing fewer investigations faster, with 130 open enforcement investigations as at 31 March 2025 - down from 188 as at 31 March 2024. It is also continuing to use formal supervisory tools in response to misconduct concerns. Firms have received large fines for breaching requirements imposed as a result, demonstrating the importance of devoting adequate resources to compliance with regulatory requirements and ensuring good governance arrangements are in place to deliver on regulator expectations. 

2. FCA ‘name and shame’ proposals dropped

In June 2025, the FCA published the updated version of its Enforcement Guide. Of particular note from this, in what many see as a rare success story for industry push-back, the FCA dropped its original proposal to adopt a public interest test for naming firms when opening an enforcement investigation. Instead, the FCA opted to retain the “exceptional circumstances” test for announcing an investigation but has added three additional instances where announcements could be made. These will enable the FCA, in limited circumstances, to announce and name the subjects of investigations into suspected unauthorised activity or criminal offences related to unregulated activity, reactively confirm that it is investigating in specific circumstances and share information on an anonymised basis. 

3. New failure to prevent fraud offence in force

Fraud is high on the regulatory agenda and the FCA commented in April 2025 that it had record levels of fraud prosecutions underway. The key recent change in this area is that the UK’s new failure to prevent fraud offence came into force on 1 September 2025 under the Economic Crime and Corporate Transparency Act 2023. Under the offence, large organisations may be held criminally liable where an employee, agent, subsidiary, or other “associated person”, commits a fraud intending to benefit the organisation. In the event of prosecution, an organisation would have to demonstrate that it had reasonable fraud prevention measures in place at the time that the fraud was committed. The offence is designed to make it easier to hold large organisations to account if they profit from fraud and The Serious Fraud Office has made it clear that it is “ready to act if corporates fail to comply with their new responsibilities”. 

4. Non-financial misconduct in the spotlight

Recent enforcement action has demonstrated that the FCA is prepared to tackle non-financial misconduct which it considers demonstrates a lack of integrity and to impose serious sanctions on those that break the rules and ignore good governance.  

In July 2025 the FCA issued its latest paper in this area, which includes both a Policy Statement regarding a change to its Code of Conduct (COCON) and a Consultation on additional guidance in the COCON and the Fit and Proper Test for Employees and Senior Personnel (FIT) sourcebooks. Key takeaways include that the FCA is expanding the scope of COCON in non-banks with effect from 1 September 2026. It is also consulting on new guidance for banks and non-banks to assist in applying COCON and FIT in relation to non-financial misconduct. Firms should keep a close eye on developments as we expect to see further enforcement action in this area. 

Separately, Lloyd’s of London is proposing to implement changes to streamline its approach to dealing with poor conduct in the market, which includes dealing with non-financial misconduct.

5. Continuing focus on anti-money laundering

Finally, keeping dirty money out of the financial ecosystem remains high on the FCA’s agenda and the FCA has emphasised that firms have a crucial role to play through their anti-money laundering systems and controls. We continue to see enforcement action where firms have failed to manage the risk of financial crime effectively and firms should ensure that they are keeping on top of anti-money laundering developments, including the planned changes to the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.

According to Therese Chambers, joint executive director of enforcement and market oversight at the FCA, enforcement should be “loud and in your face”. We have seen this with some large fines over the summer months. The FCA has emphasised that enforcement action isn’t just about firms, it’s also about individual accountability and responsibility. Consequently, both firms and senior individuals should be mindful of the areas we have highlighted here and more broadly learning lessons from published enforcement outcomes, with a view to ensuring that they are meeting regulatory expectations.