The FCA’s inaugural Enforcement Watch newsletter signals a shift toward a more transparent and assertive enforcement posture, giving firms earlier visibility into investigations, sharper scrutiny of Consumer Duty outcomes, and a more deliberate focus on individual accountability. It also provides insight into a closer alignment between enforcement work and the regulator’s strategic priorities.
A Clearer Window into the FCA’s Enforcement Agenda
The newsletter marks a new phase in how the regulator communicates its enforcement activity and priorities. The publication is designed to provide closer to real-time insights into the types of cases the FCA is opening, especially so where those cases support consumer protection, reinforce market confidence, or help the wider industry understand areas of regulatory concern.
This move operationalises the 2025 update to the Enforcement Guide, which expanded the FCA’s ability to publicise enforcement investigations in “exceptional circumstances”, giving firms a clearer, near real-time view of where and why the regulator is intervening.
Between June and December 2025, the FCA opened 23 enforcement operations, spanning regulatory breaches, criminal and regulatory offences, and a smaller number of criminal-only matters. Notably, the regulator confirmed investigations into three listed issuers, opened two investigations into unauthorised firms (without naming them), and publicly identified one authorised firm after a high “exceptional circumstances” test.
Most importantly, the newsletter also highlights the FCA’s seven thematic enforcement priorities:
- Individual accountability
- Market disclosure failures
- Unauthorised business (including crypto assets)
- Fair value under Consumer Duty
- Inadequate oversight
- Weak systems and controls, and
- Conflicts of interest in the consumer investment and asset management segments
These priorities provide firms with a clear signal of where the FCA is likely to focus its resources and where enforcement scrutiny will be most intense. The regulator expects firms to not only identify and remediate issues early, but to demonstrate these improvements with precision and pace. Where issues persist, particularly in areas previously highlighted through supervisory engagement, enforcement action will follow.
For buy-side firms, this matters. Enforcement trends are increasingly aligned to systemic themes: operational resilience, governance clarity, quality of disclosures, and fair value delivery. The newsletter confirms that the FCA intends to use transparency as a behavioural lever, reinforcing to the industry the areas where it sees persistent harm or repeated failures and setting expectations that firms should learn from industry-wide failings, not just their own. Firms operating in this environment must be ready for greater public accountability, more assertive regulatory enquiry, and swifter consequences for slow or inadequate remediation.
Raise The Bar on Governance, Remediation, and Oversight
The publication is a deliberate attempt to help firms “read the signals” and adjust their oversight frameworks accordingly. The FCA now expects firms not only to just comply, but to actively learn from others’ mistakes. Greater transparency means firms will have less room to claim ignorance of regulatory expectations.
Enforcement themes highlighted in the first edition of the newsletter are likely to shape supervisory discussions, thematic reviews, and future policy choices. In a market where reputational risk is acute and public announcements can have significant commercial impact, firms should see Enforcement Watch as both an educational resource and an early warning system.
Firms should take steps to:
- Strengthen governance and individual accountability: Clarify senior management function (SMF) role boundaries, decision-making pathways and evidence of “reasonable steps”. These are areas that the FCA continues to place significant weight on, underscoring the importance of effective challenge, well-documented decisions and clear ownership. Make sure governance frameworks and associated documentation are current, auditable, and easy to navigate.
- Accelerate and evidence remediation: Shift from informal “to do” lists to structured remediation plans with accountable owners, dated milestones, and measurable criteria. Evidence must show how processes, behaviours, or controls have changed in practice, not merely just updated on paper.
- Deliver Consumer Duty “fair value” with proof: Ensure Consumer Duty frameworks are sufficiently robust to withstand scrutiny. Firms should revisit value assessments, management information (MI), product governance, and distribution oversight to confirm that fair value is demonstrable, not assumed. Evidence of board challenge and the rationale underpinning key decisions should be explicit and retrievable.
- Tighten market disclosure and issuer controls: Market abuse prevention remains central to the regulator’s enforcement agenda. Firms should retest inside-information processes, including identification, governance escalation, recordkeeping, and cleansing protocols. Clear, repeatable procedures reduce the risk of disclosure failures and strengthen Market Abuse Regulation (MAR) compliance.
- Reinforce systems and controls, particularly around unauthorised business and crypto: Given the FCA’s firm stance on unauthorised activity, especially involving crypto assets, firms should validate perimeter assessments, refresh distributor due diligence, and enhance ongoing permissions monitoring. For crypto-related exposure, financial crime controls must be fully aligned with current risk statements and operationalised consistently.
- Manage conflicts of interest with demonstrable effectiveness: Maintain a live, accurate conflicts register supported by mapped mitigations and MI that highlights emerging risks. Governance should drive behavioural change. This should be tested, for example, through allocation decisions, best execution monitoring, and personal dealing reviews. Evidence of oversight and challenge is critical.
A New Enforcement Environment Demands Stronger Evidence
The FCA’s Enforcement Watch newsletter is a regulatory signalling device that provides firms with a clear view of where enforcement energy is directed and what behaviours the regulator expects to see corrected.
With a more transparent enforcement environment comes greater scrutiny and less tolerance for slow remediation or poorly evidenced compliance efforts. In this landscape, firms benefit from structured, independent challenge and support to ensure their frameworks withstand both supervisory attention and public exposure.
A specialist compliance partner can equip firms with rigorous regulatory insight, targeted risk assessments, and hands-on implementation support to address the very issues highlighted in the FCA’s Enforcement Watch. This includes strengthening governance arrangements, enhancing financial crime controls, optimising Consumer Duty frameworks and ensuring robust, timely remediation. Connect with us today to learn how ACA can help you meet rising FCA expectations.
ACA Helps Firms Stay Ahead of Regulatory Risk
ACA gives firms expert insight, independent challenge, and practical support needed to respond confidently to regulatory scrutiny. We help strengthen governance, sharpen oversight, and build evidence-ready frameworks that stand up to an increasingly transparent enforcement environment.
Our services include:
- Governance and accountability reviews to clarify SMF responsibilities and evidence “reasonable steps.”
- Structured remediation support, from root-cause analysis to milestone-based delivery and testing.
- Dedicated inspection support to manage and respond effectively to regulator enquiries under pressure.
- Consumer Duty programme enhancements, including value assessments, MI frameworks, and product governance oversight arrangements.
- Market abuse and issuer controls strengthening, covering inside information governance, escalation, and surveillance.
- Conflicts of interest frameworks, supported by clear mitigations, monitoring, and robust MI.
- Technology-enabled oversight through ACA’s ComplianceAlpha® RegTech and managed services to evidence effective, repeatable control.
- Comprehensive FCA-focused training addressing senior manager responsibilities, market abuse requirements, financial crime standards and conflicts of interest, enabling staff to stay fully informed and aligned with regulatory expectations.
If you’d like to discuss how these themes affect your firm, or how our services can help address them, our team is ready to talk through your priorities and next steps.