UK FCA consults on changes to its penalty and decision-making policies

The UK Financial Conduct Authority (FCA) has published consultation paper CP26/19, proposing targeted amendments to its Decision Procedure and Penalties Manual (DEPP) to ensure that its penalty framework and decision-making processes remain up-to-date, transparent and effective. The proposals also reflect the introduction of the market abuse regime for cryptoassets.

Key proposals include:

• Market abuse. Increasing the minimum initial disciplinary penalty level for serious market abuse committed by individuals from GBP100,000 to GBP150,000 to account for inflation.
• Deterrence. Making clear that the FCA has the ability to increase penalties for wealthier individuals for deterrence, having regard to income and assets.
• Relevant income. Clarifying how to treat deferred income, including bonuses, pay and shares, in line with recent Upper Tribunal decisions.
• Serious financial hardship thresholds. Increasing income and capital thresholds to reflect living costs and so that the figures automatically adjust to keep pace with inflation over time.
• Settlement decision-makers. Revising the composition for the FCA's settlement decision-making process where cases are referred from Market Oversight for investigation.
• Market abuse regime for cryptoassets (MARC). Minor and consequential amendments following the introduction of MARC and reflecting the FCA's new powers under the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026.

The draft FCA instrument making the proposed changes to DEPP, the Decision Procedure and Penalties Manual (Amendment) Instrument 2026, is set out in Appendix 1 to the consultation paper. The deadline for comments is 10 August. The FCA will consider the consultation feedback before it decides on any changes.

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