FCA drive to reduce its investigation costs likely to add to compliance burden for smaller firms, warn experts

The U.K. financial regulator’s move towards “impactful deterrence” could see smaller and mid-size firms come increasingly under the spotlight as the watchdog aims to tackle market-wide concerns instead of primarily focusing on large players capable of doing the most harm.

Experts also warn that while the change in policy is likely to result in a rise in lower-level fines, more firms are likely to experience an uptick in compliance costs as the Financial Conduct Authority (FCA) raises its expectations about the level of disclosure and co-operation necessary to offset an investigation or sanction.