The UK's Financial Conduct Authority (FCA) announced a major reform of its enforcement disclosure procedures today (Monday), implementing broader document review standards and enhanced staff training protocols in response to a recent Upper Tribunal recommendation.
FCA Overhauls Enforcement Disclosure Process Following Tribunal Recommendation
The regulatory overhaul comes after the case against three former employees of Julius Baer earlier this year, where the Upper Tribunal highlighted the need for a comprehensive review of the FCA's disclosure practices in enforcement cases.
“Under our new broader approach, we will disclose all material that is relevant to the facts of the matter, save where it is disproportionate, not in the public interest, or otherwise inappropriate to do so,” the FCA commented. “This will include all material that is potentially undermining as well as supportive material.”
Key changes include a more expansive document review methodology, specialized training programs for disclosure management teams, and revised performance metrics that emphasize the importance of thorough disclosure practices. The regulator will now disclose all relevant case materials, except where such disclosure would be disproportionate or against the public interest.
The FCA has also introduced clearer guidelines defining staff roles and responsibilities in the disclosure process, coupled with enhanced quality assurance measures. These reforms aim to provide stronger support for case teams while maintaining regulatory effectiveness.
The regulator plans to evaluate the effectiveness of these changes through a follow-up review in late 2025, demonstrating its commitment to continuous improvement in enforcement procedures.
It’s another adjustment following last week’s sweeping revisions to bond and derivatives market transparency rules, marking the most extensive regulatory overhaul since Brexit. The UK is working to strengthen London’s role as a global financial hub.
“We want UK markets to be efficient and to support economic growth,” said Jon Relleen, Director of Supervision, Policy and Competition at the FCA. “Putting more information in the hands of investors and giving investment firms greater access to research to inform their strategies will bolster UK markets.”
What Was the “Seiler, Whitestone and Raitzin” Case About
The Court of Appeal recently concluded a significant case involving the FCA and three former Julius Baer Group employees: Thomas Seiler, Louise Whitestone, and Gustavo Raitzin. The case originated from the FCA's £18 million fine against Julius Baer International Limited in February 2022, followed by prohibition orders against the three individuals.
At the heart of the dispute were allegations concerning Julius Baer's dealings with a Yukos oil and gas company representative, involving “finder's fees” paid through inflated foreign exchange transaction charges. The FCA claimed the individuals lacked integrity by recklessly disregarding potential fund misappropriation risks. However, the Upper Tribunal disagreed with the FCA's assessment and criticized the regulator's investigation methods.
The FCA faced particular scrutiny for its handling of evidence, specifically its failure to call relevant witnesses and its problematic management of the “Third FX Transaction,” where the regulator had presented incorrect factual information when it initially issued its warning notice to the parties.
The Upper Tribunal's criticism extended to the FCA's press release about the case, which it described as “nothing short of disgraceful.” The Court of Appeal ultimately upheld the Tribunal's costs order against the FCA, marking a significant setback for the regulator's enforcement approach.
