Clifford Chance

On 10 July 2025, the Financial Conduct Authority (FCA) published its Annual Report and Accounts for 2024-2025 (the "Annual Report"), marking the culmination of its 2022–2025 strategy. This Annual Report measures the FCA's progress against its three stated core priorities: (i) reducing and preventing serious harm; (ii) setting and testing higher standards; and (iii) promoting competition and positive change. This period has been characterised by an extensive programme of regulatory reform, digital innovation and international collaboration. 

Key takeaways

The Annual Report highlights a number of significant achievements over the past three years in delivering the FCA's 2022-2025 strategy. We set out below five key areas in which the FCA has pointed to significant progress made during this period:

1. Consumer Duty: Since the introduction of the Consumer Duty in July 2023, the FCA has driven firms to raise standards and strengthen board oversight of consumer outcomes. There have not yet been any significant enforcement outcomes concerning the still relatively new Principle 12 or cross-cutting rules inserted into the FCA's Handbook. However, the FCA has pointed to data such as 73% of consumers in vulnerable circumstances reporting positive interactions with their firms in 2024-2025, and the rate of upheld complaints about unsuitable advice or mis-sold products falling from 39% in 2022 to 26% in 2024, as indicators of tangible positive changes in this area.

2. Digital Transformation: The FCA has made significant investments in data and technology – over £170 million in 2024-2025 alone – to enhance regulatory efficiency and market oversight. Among other initiatives, the FCA has:

• launched its AI Lab, jointly operated with the Bank of England since September 2024, inviting innovators to co-develop and test AI models for regulatory use and market surveillance;
• opened the Digital Securities Sandbox, accepting eight firms to pilot AI-driven digital securities solutions and tokenisation in a controlled environment; and
• developed PISCES (Private Intermittent Share and Capital Exchange Service), an innovative platform enabling intermittent trading of private company shares.

3. Intelligence-Led Supervision: The FCA has adopted a data-led approach, using advanced analytics and intelligence tools to detect misconduct and intervene more rapidly. The FCA reports that this has enabled it to cut the average time to assess market abuse from three days to a few hours, to issue 2,240 alerts about unauthorised firms and individuals in 2024 and to increase the number of cancelled authorisations by 121% over three years.

4. Operational and Financial Resilience: In response to ongoing economic and geopolitical volatility, the FCA has increased its scrutiny of firms' capital adequacy, liquidity, and stress testing. It reports that the introduction of updated Listing Rules has already enabled 21 transactions to proceed without shareholder approval, streamlining capital raising. Consultations on new public offer and transmission rules and a public offer platforms framework are also underway, aiming to lower costs and improve efficiency for companies seeking to list.

5. Sustainability: The FCA continues to integrate environmental, social and governance (ESG) priorities into its regulatory framework. The FCA has taken several measures on this front, including the introduction of its anti-greenwashing rule in November 2023, as part of its new Sustainability Disclosure Requirements (SDR), to ensure firms' sustainability-related claims are fair, clear and not misleading. Final guidance was published on 23 April 2024 and came into force on 31 May 2024, with many firms having since updated their marketing and promotional materials.

Enforcement and supervision

The statistics reported by the FCA are consistent with the approach experienced by firms during the period covered by the Annual Report – the FCA has become considerably more selective in which enforcement cases it pursues, but continues to take an assertive approach to supervision. Unsurprisingly, the FCA has underlined its commitment to reducing and preventing financial crime, and enforcement cases and supervisory actions in support of this feature prominently in the Annual Report.

Headline figures in the Annual Report indicate that 2024-2025 saw:

1. the issuance of 37 Final Notices, charging of 19 suspected individuals/ entities and securing of five convictions, aimed at disrupting illegal financial promotions and scams, including in relation to cryptoassets;
2. a significant increase in penalties collected by the FCA (£180.1 million) – this represents an increase of more than 500% against 2023 – 2024 when the penalties collected were in the amount of £35.3 million (although the previous year's figure was unusually low);
3. a significant increase in cancelled authorisations for problematic firms (1,516 cancellations) up 20% against 2023-2024 and 121% against 2021, which has been attributed to the use of improved technology and data;
4. a significant increasing in the number of non-compliant financial promotions removed or amended (19,766), up 97.5% against 2023 and approximately 3,500% against 2021;
5. a decrease in upheld complaints about unsuitable or mis-sold products, from 30% in 2022 to 26% in 2024.

Combating scams and unauthorised services

The Annual Report notes the incidence of increasingly sophisticated fraud threats and the increase in financial influence scams on social media, both of which pose challenges to the FCA's commitments to reduce and prevent crime and to enable consumers to help themselves. The implementation of these commitments hinges on the FCA identifying and disrupting potential scams and illegal promotions and the Annual Report indicates the FCA has been able to leverage data and technology to do so.

In 2024-2025, the FCA:

• identified and assessed 480,000 new websites that had the potential to be used to promote financial services or products without authorisation. Over 3,000 domains were suspended or blocked, and 2,240 alerts were issued to unauthorised firms and individuals, while 1,600 alerts were issued to UK customers.
• interviewed under caution, 20 finfluencers illegally promoting financial services and issued 38 alerts against finfluencer social media accounts.
• used data to intervene on non-compliant financial promotions, resulting in the amendment or withdrawal of 19,766 financial promotions; and
• worked with tech platforms to remove more than 50 fraudulent and unauthorised apps from app stores.

Financial crime

The Annual Report confirms that in 2024-2025, the FCA opened 965 financial crime supervision cases, a 15% increase since 2023-2024 and a 164% increase from 2021. This has included three multi-firm reviews.

The FCA has also reported that it has carried out 546 anti-money laundering assessments, up 25% from 435 assessments in 2023-2024. Two banks have been fined for anti-money laundering systems and controls failings.

In the context of market abuse, the Annual Report notes the expansion of the FCA's monitoring and detection capabilities in Fixed Income, Currencies and Commodities markets which it states has enabled the completion of preliminary market abuse assessments within a few hours instead of the previous timeline of three days, allowing almost real-time visibility of the gilt market which has improved the detection and prevention of market abuse.

The FCA has pursued enforcement action concerning market abuse (mostly predating the period reviewed in the Annual Report) in a number of well-publicised enforcement cases (including multiple prosecutions leading to convictions). It has indicated that more such cases will conclude. Notwithstanding these cases and its concerns on various aspects of market practice which have led it to issue guidance in recent editions of MarketWatch, the FCA has indicated that it has not seen an increase in the incidence of market abuse over the last three years.

Use of Skilled Person Reports

In 2024-2025, the FCA used its power to appoint a skilled person under section 166 of the Financial Services and Markets Act 2000 in 47 cases. This is a reduction of 39% in skilled persons reviews commissioned against 2023-2024, but is no different to the number of reviews commissioned in 2022-2023 (also 47).

Of the 47 cases, it appointed the skilled person in only 6 cases, with the regulated firm appointing the skilled person in the remaining 41 cases. Of the 47 reports, approximately 25% concerned each of financial crime, conduct of business and controls and risk management frameworks.

Looking Ahead

The FCA now has some new strategic priorities, which are set out in its 2025-2030 strategy.

Over the next five years, the FCA has committed to focusing on four interconnected objectives: (i) being a "smarter regulator", improving processes and embracing technology to become more efficient and effective; (ii) supporting growth by enabling investment, innovation and continued competitiveness; (iii) helping consumers to navigate their financial lives and make informed decisions; and (iv) intensifying the fight against financial crime.

The FCA’s focus on the Consumer Duty and financial crime prevention will remain front and centre. Firms must ensure these principles are embedded across all operations, with robust systems in place to deliver positive customer outcomes and guard against misconduct.

However, firms may be able to expect a more "proportionate" and "predictable" regulatory approach, with reduced reporting requirements, digitised authorisation processes, and lighter-touch supervision for those demonstrating strong compliance. The FCA’s increasing use of AI and digital platforms is intended to support further regulatory efficiency and increased and streamlined intelligence gathering.

On the same day as the Annual Report looked back over initiatives pursued over the past few years, a separate press release from the FCA provided a timely reminder of how it has revisited and reshaped its priorities to conspicuously streamline regulation and support growth. The latest initiative it has announced in support of this is its intention to review client categorisation rules, aiming to unlock more opportunities for wealthy investors and support capital markets. The press release does not contain any formal proposals at this stage – those will follow.

This press release provides some clues as to how the FCA's next Annual Report may look quite different to the one just published. It refers to the FCA's commitment to introducing 50 initiatives to simplify regulatory requirements and help to create the conditions for economic growth by the end of 2025. It suggests that it is making good progress in this priority area by delivering 10 such initiatives in this area since January 2025. When the next Annual Report is published, a key yardstick will be how many of these 50 initiatives have been delivered by the FCA, and how it has done so as it seeks to balance key regulatory priorities with maximising efficiency and supporting growth.

Furthermore, several significant regulatory developments announced yesterday will shape the landscape for firms over the coming years and reinforce the FCA's continuing commitment to supporting the Government's growth agenda. HM Treasury, the FCA and the Prudential Regulation Authority (PRA) have each published consultation papers[1] proposing substantial changes to the Senior Managers and Certification Regime (SMCR), including removing the Certification Regime from legislation, streamlining pre-approval and reporting processes for Senior Managers, and reducing duplication and administrative burdens. In parallel, HM Treasury and the FCA/Financial Ombudsman Service (FOS) are consulting on reforms to the redress system,[2] such as adapting the FOS “fair and reasonable” test in resolving consumer complaints, introducing a 10-year time limit for bringing cases, and clarifying referral arrangements between the FOS and FCA. Both sets of consultations close in early October 2025 and are aimed at making the regulatory and redress frameworks more proportionate and efficient.

In addition, the FCA has previewed further market reforms for later this year, including the introduction of a consolidated tape for bonds, a review of securitisation rules, and measures to improve data quality, with final rules expected in 2026. The FCA has also announced that it intends to introduce new, faster targets for authorisation processes, including shorter statutory deadlines and voluntary targets for various application types, effective from January 2026.

Taken together, these developments underscore the FCA’s ongoing drive to modernise the regulatory framework, reduce unnecessary burdens on firms, and support innovation and market growth. Firms should closely monitor these consultations and prepare for the forthcoming changes, ensuring that their systems and processes remain aligned with evolving regulatory expectations.

¹ See the respective consultation papers dated 15 July 2025: (1) HM Treasury, (2) the FCA and (3) the PRA.

² See the respective consultation papers dated 15 July 2025: (1) HM Treasury and (2) FCA/FOS (joint consultation paper).