FCA’s Enforcement Watch 1 and what it means for the financial services industry

The FCA has recently released its newsletter ‘Enforcement Watch 1’ (‘EW1’) – a new online publication providing legal practitioners and others involved in the financial services industry an invaluable insight into the regulatory body’s enforcement priorities, aims and policies.

The FCA’s regulatory scope is broad and complex, encompassing a wide range of activities and different markets, although as an organisation it is often criticised for a lack of transparency. The recent publication of EW1 signals a positive step toward the FCA achieving greater clarity regarding its enforcement appetite and regime.

The FCA’s enforcement focus

The first edition of EW1, published on 28 January 2026, covers (i) the FCA’s updated enforcement policy; (ii) the regulator’s case priorities; and (iii) its international partnerships.

With respect to the FCA’s enforcement priorities, EW1 reveals that, between June and December 2025, the FCA opened 23 new cases. Of those 23 cases, 18 are regulatory investigations, four are dual track criminal and regulatory investigations, and one is a pure criminal investigation. This portfolio of new case work spans a multitude of alleged misconduct across the sector, including:

• suspected fraud, misappropriation of funds, and the provision of false information to the FCA;
• market disclosure issues;
• suspected unauthorised business, with a particular focus on the cryptoasset sector and the Money Laundering Regulations 2017 (for more detail about the regulation of cryptoassets, please see our previous article here);
• Consumer Duty breaches by companies, with a particular focus on fair value for consumers;
• inadequate oversight at authorised firms – EW1 notes that these new cases involved suspected system and controls failings where authorised firms may have caused harm through inadequate system oversight or by relying on third party providers;
• the adequacy of firms’ financial crime controls; and
• investigations into the consumer investment and asset management sectors, with a focus on misleading consumers and failing to recognise conflicts of interest.

As anticipated, EW1 stresses the importance of proactivity on the part of both individuals and firms to deal with problems quickly and effectively and to be transparent with the regulator. This is unsurprising given the FCA’s increasingly assertive supervisory approach and clear supervisory expectation that firms properly manage and mitigate risk and maintain an open and constructive relationship with the FCA.

The FCA also reiterated the factors that would support a decision to open a formal investigation, including: (i) repeated failures to be open about concerns; (ii) failing to address issues promptly; (iii) deliberately misleading the regulator, consumers or markets; and (iv) causing significant harm to consumers.

The FCA’s international partnerships

The FCA’s membership to the International Organisation of Securities Commissions (‘IOSCO’), as highlighted in the first edition of EW1, may signal a more prominent enforcement focus on cross-border information sharing and investigations. Notably, EW1 reveals that the FCA sent and received 476 requests for information via IOSCO. The FCA also highlighted its ability to receive electronic data from the U.S. more effectively, through leveraging the Crime (Overseas Production Orders) Act 2019.

The FCA has clearly indicated its aim to strengthen international partnerships with law enforcement agencies and other regulators through multiple channels – these moves take place in the context of the increasingly cross-border nature of financial crime, for example, growing cases of international online financial fraud schemes as reported by Europol’s Internet Organised Crime Threat Assessment (2024). Indeed, the FCA’s EW1 highlighted online frauds and scams, noting that ‘bad actors and platform providers are often based outside the UK.’ For more information about the FCA’s recent crackdown on illegal ‘finfluencers’, please see our previous article here.

What can we take from this?

It is particularly interesting to see that the FCA now has six investigations open in relation to potential breaches of the Consumer Duty. When this came into force in 2023, the FCA was very clear that it considered it to be a significant regulatory development that would drive improvements across the industry and it would not be shy about enforcing against firms that fell short of its – admittedly – high standards. This approach now appears to be bearing fruit. In addition, it also appears that the FCA remains interested in criminal or quasi-criminal issues and is certainly willing to use its full suite of powers to tackle such behaviours when required.

More generally, in the six-month period from June to December 2025, the FCA opened 23 new enforcement operations across its wide-ranging criminal and regulatory remit compared to 23 across the whole 12-month period from March 2024 – March 2025. After a significant downturn in new case openings between 2023 – 2025, whilst it attempted to clear the backlog of cases that had built up under enforcement’s previous leadership, it appears that the division is once again open for new business. EW1 may well be the FCA’s way of signalling that fact to the wider market.

Please contact Jill Lorimer and James Alleyne in our Financial Services group if you have questions about the topic raised in this blog. Our team of expert lawyers has an impressive track record of successfully advising regulated firms on supervisory issues as well defending both individuals and institutions facing regulatory or criminal investigations conducted by the FCA.