One of the UK’s most senior financial regulators has insisted on the importance of timely and transparent enforcement action to prevent financial misconduct and protect customers and markets.

Therese Chambers, joint executive director of enforcement and market oversight at the FCA has said the UK regulator “will act with pace to stop harm, disrupt criminals, and back firms to be an effective line of defence.”

In a speech at the at the Spring Conference of NYU’s Program on Corporate Compliance and Enforcement, she called for international cooperation, especially between the UK and the US, to stop bad actors from undermining the integrity of the financial markets.

Chambers insisted that the UK regulator was completing investigations at a faster speed than ever before. “Enforcement needs to be loud and in your face,” she went on to say.

“Many, if not all, of the US firms you represent have a London footprint. Some will have entities that are directly authorized and regulated by us. Others will have trading operations that participate in UK markets. The way we regulate and enforce in London matters to all of you,” she said.

The FCA boss referred to the LIBOR and FX rate-rigging scandals a decade ago and used them as examples of how international cooperation and coordination enabled regulators on both sides of the Atlantic to penalize financial misconduct of unprecedented scale.

She added that fighting and preventing financial crime was a key pillar of the FCA’s new five-year strategy, and that the watchdog’s enforcement team was committed to that responsibility.

Areas of focus

Within the context of that strategy, Chambers highlighted some of the key areas the enforcement team wanted to focus on, including:

• “keeping dirty money out of the financial ecosystem;
• “taking swift action where we see regulated firms being used as vehicles for fraud;
• “keeping our markets clean; and
• “developing a safe crypto regime that protects consumers.”

On the first point, Chambers referred to the prosecution of NatWest in 2021, for what she called “a catalogue of failings in the way it monitored and scrutinized a series of transactions.”

“We cannot progress some of our cases without your help, and you cannot progress some of yours without ours. So, it’s in all our interests for us to offer and accept help in pursuit of our common goals.”

Therese Chambers, joint executive director of enforcement and market oversight at the FCA

She also mentioned the fining of Santander in 20222 “for failing to adequately manage the money laundering risks posed by its business banking customers.”

“Keeping dirty money out of the financial ecosystem means maintaining high standards, proactive monitoring, and relying on international collaboration and digital tools,” she added.

On the second point of preventing fraud, she insisted that using regulated firms to carry out financial misconduct will simply not be tolerated.

“Through our fraud practice, we close firms down, hold to account those who have betrayed their customers’ trust, secure long prison sentences and ensure that criminals do not retain one cent of their ill-gotten gains.”

Market integrity vital

Chambers highlighted the importance of market integrity across equity markets, fixed Income, currencies and commodities in order for the UK to safeguard its current global position.

She referred to the growing threat from organized crime groups (OCGs) and called on firms to “be vigilant in detecting signs of criminality” and keeping markets clean. “Firms need to have the right systems and controls in place to catch those transactions that raise suspicions or warrant further analysis,” Chambers told the audience.

And on the final point of digital assets regulation, she insisted that the regulator wanted to create a “safe, competitive and sustainable crypto sector in the UK.” She said the aim was to establish a digital assets regulatory frame work “that allows for innovation and is underpinned by market integrity and consumer trust.”

She accepted that the current scale and scope of crypto regulation in the UK was “limited” but insisted that the FCA was using “our existing powers to encourage the industry to develop strong consumer standards that better protect people.”

In conclusion, Chambers highlighted the global nature and scale of financial misconduct, especial online fraud and scams, and insisted that international cooperation was needed more than ever before to tackle those challenges.

“We cannot progress some of our cases without your help, and you cannot progress some of yours without ours. So, it’s in all our interests for us to offer and accept help in pursuit of our common goals,” she said.