Information on enforcement on SMCR - June 2022

I am looking for information about matters which have been referred to enforcement which concern potential breaches of the SMCR generally and non-financial misconduct specifically. I would be grateful if I could receive information in relation to the following:

1. How many current enforcement investigations are open under the SMCR?

2. Of those how many concern non-financial misconduct which is unconnected to the provision of financial services or the operation of the business of the regulated firm (non-financial misconduct which took place outside of the workplace)?

3. How many concern non-financial misconduct which took place within or connected to the operation of the business?

4. How many investigations are linked to wholesale and how many to retail firms?

5. How many cases of non-financial misconduct are currently being considered by the Threshold Conditions Team?

1. How many current enforcement investigations are open under the SMCR?

We have taken ‘investigations’ to mean enforcement cases in which investigators have been formally appointed under section 168(2)(a) of the Financial Services and Markets Act 2000 (FSMA):

There are currently 63 open enforcement investigations under the SMCR.

2.  Of those how many concern non-financial misconduct which is unconnected to the provision of financial services or the operation of the business of the regulated firm (non-financial misconduct which took place outside of the workplace)?

Four enforcement investigations have been opened into non-financial misconduct (NFM).  Of these, 2 remain open.

Please note, where you refer to ‘investigations’, we have taken this to mean investigations in which investigators have been formally appointed under section 168(2)(a) of FSMA.  This number therefore does not include threshold conditions cases relating to non-financial misconduct.

The Threshold Conditions Team (TCT) have opened a further 10 investigations into non-financial misconduct. Of those, 4 are ongoing. 

All 4 non-TCT cases relate to NFM connected to the workplace.  All TCT prohibition cases relate to conduct outside of the office, for which approved individuals have been prosecuted and sanctioned by other authorities.

3.  How many concern non-financial misconduct which took place within or connected to the operation of the business?

Please see answer to Q2 above.

4.  How many investigations are linked to wholesale and how many to retail firms?

Of the 63 open SMCR investigations, 39 are into individuals linked to retail firms and 24 into individuals linked to wholesale firms.  Of the 2 open enforcement investigations concerning non-financial misconduct, 1 is into an individual linked to a wholesale firm and 1 is into an individual linked to a retail firm. 

5.  How many cases of non-financial misconduct are currently being considered by the Threshold Conditions Team (TCT)?

See answer to Question 2. We have interpreted ‘being considered’ as open investigations. The Threshold Conditions Team currently have 4 active investigations relating to non-financial misconduct.