A firm has unsuccessfully challenged the FCA's application of its "exceptional circumstances" test for publicly naming a firm at the outset of an enforcement investigation

In a judgment handed down on 23 October (which may be supplemented once an outstanding application for permission to appeal has been decided), Fordham J has dismissed a firm's judicial review of an FCA decision to publicise an investigation into a firm (including naming the firm). For the time being, the name of the firm involved remains confidential pending the determination of the firm's application for permission to appeal.

What was the basis of the firm's challenge to the FCA's decision to issue an announcement publicising the commencement of its investigation and naming it?

The case, R (CIT) v Financial Conduct Authority [2025] EWHC 2614 Admin, marks the first publicised challenge to the FCA's use of its "exceptional circumstances" test since the FCA backed down on its controversial proposal to replace this with a broader public interest test, and revised its policy on publication in 4.1.1 to 4.1.9 of its Enforcement Guide. Changes introduced as part of this policy shift included the introduction of an express ability to make anonymised announcements in certain circumstances. See our previous blogs on these changes here and here.

Fordham J rejected the firm's arguments that the FCA decision-maker had materially misinterpreted the relevant parts of the Enforcement Guide, or that it had reached a decision which was unreasonable as to its outcome or reasoning process.

"What does the case tell us about the scope of the "exceptional circumstances" test?

Three key points emerge from the judgment about the correct interpretation of 4.1.1 to 4.1.9 of the Enforcement Guide:

• First, "exceptional" in the context of the "exceptional circumstances" test, means "an exceptional investigation" rather than exceptional when compared with the circumstances of regulated firms in general.
• Second, the desirability of making an announcement which names a firm ("Naming Announcement") is to be judged against the two alternatives open to the FCA. These are: to make no announcement which is the usual baseline position pursuant to 4.1.1G; or to make an announcement without identifying the firm ("Anonymised Announcement") pursuant to 4.1.8G.
• Third, the FCA's consideration of "exceptionality" in this context requires the FCA to consider reasons relevant specifically to naming, in addition to reasons relevant to announcing.

Fordham J also identified that there are four main issues necessary to address when considering a Naming Announcement:

• exceptionality, seen in the phrase "in exceptional circumstances".
• desirability, seen in the phrase "such an announcement is desirable to".
• one or more of the five specified objectives (1) to (5) in 4.1.4, each of which is linked to desirability.
• potential prejudice to a person who is an actual or likely subject of the investigation.

In relation to the firm's first review ground, Fordham J ultimately found that the FCA had not materially misdirected itself to the correct meaning of the Enforcement Guide as it had interpreted it consistently with the above principles.

Interestingly, Fordham J suggested that FCA could potentially be criticised for not having taken a sequenced 'route to verdict' type approach which would have separated out and considered first the question of whether to make any announcement at all and, only thereafter, considered the question of whether to make a Naming Announcement or an Anonymised Announcement. Instead, the memorandum setting out the FCA's reasoning had taken a "composite" approach which addressed the relevant factors in the round. This is an interesting criticism because there is nothing in the relevant parts of the Enforcement Guide which expressly requires a sequential approach. The criteria for making a Naming Announcement (as set out in 4.1.4G) are distinct from the criteria for making an Anonymised Announcement (as set out in 4.1.8G).

Fordham J raised a potentially related question of whether there was any "independent route" to an Anonymised Announcement, given that an Anonymised Announcement would always be a less intrusive measure than a Naming Announcement. Instead, the memorandum setting out the FCA's reasoning had taken a "composite" approach which addressed the relevant factors in the round. This is an interesting criticism because there is nothing in the relevant parts of the Enforcement Guide which expressly requires a sequential approach. The criteria for making a Naming Announcement (as set out in 4.1.4G) are distinct from the criteria for making an Anonymised Announcement (as set out in 4.1.8G). However, unfortunately this was left unaddressed in the judgment (at least for the time being – further detail may emerge if the initial judgment is supplemented by more detailed reasoning once any further appeal has been determined).

Fordham J also rejected the firm's second and third review grounds based on unreasonableness in the FCA's outcome or reasoning process. A key theme of the FCA's reasoning (which the Court found was "fatal" to a challenge of unreasonableness) was the importance that the FCA had placed on alerting the firm's customers of the investigation, including "that they may wish to consider their options by reference to aspects of the way in which they may have come to be the Claimant's customers".

In reaching its decision on this issue, the FCA had considered potential counter arguments, and the potential alternative ways of communicating a similar message to the firm's customers (such as leaving the firm to write to its customers), but ultimately concluded that an announcement which specifically named the firm would be the most effective regulatory response to protect consumers, as per the objective at 4.1.4(2) of the Enforcement Guide. The judgment acknowledged and endorsed the FCA's arguments that, in this particular case, the FCA was entitled to view the interest in protecting consumers by communicating about the investigation as outweighing the potential detriment in the firm. It accepted the FCA's position that communicating in other ways, for example through an Anonymised Announcement would not achieve that objective because "it would not inform the Claimant's customers of the position or enable them to consider theirs".

How should firms approach bringing challenges to proposed announcements?

The majority of the hearing was held in private, as the Court held that full publicity of the hearing (or the Court's judgment) would identify the firm and thereby defeat the object of the hearing.

Although some aspects of this case were expedited, the process of challenging regulatory decisions by way of judicial review is not quick or straightforward. Such challenges are rarely successful. The process of challenging the FCA's decision to make a Naming Announcement has necessitated multiple applications over a period of months – the Claimant firm had previously had to apply urgently for an anonymity order preventing the release of details of the identity of that firm (which was made by Chamberlain J on 10 September).

It remains to be seen whether this case is illustrative of an increased appetite on the FCA's part to seek to use its "exceptional circumstances" test more frequently to achieve the ambition it clearly set out in its CP24/2 consultation to provide greater transparency about its investigations and faster deterrence to the market. While the market firmly objected to such an approach, this case illustrates that the FCA already had considerable scope for announcing investigations under its existing guidance, which we predict will often be difficult for firms to challenge.

However, the potential consequences of naming announcements for firms are substantial, so if this does represent a concerted shift by the FCA to deploy this test more frequently, this is unlikely to be an isolated example of a challenge pursued by a firm to such announcements.

Another curious aspect of the decision is the indication that the FCA only provided the firm with 24 hours' notice of the proposed publication. This is in contrast to the stance the FCA had publicly taken in November 2024 in Part 2 of its CP 24/2 Consultation, in which it indicated that in most cases (other than extreme cases such as when serious fraud appears to be happening) the FCA could provide firms with at least 10 business days’ notice of a proposed publication. It is unclear why this longer notice period was not adopted with the firm (when notifying it in September 2025) in this case and whether this was because the FCA considers that the longer proposed notice period does not apply in “exceptional circumstances” cases, or because there were particular circumstances in this case justifying a shorter period of notice. In any event, challenges to Naming Announcements will need to be initiated promptly, so in cases where there is a potential for the FCA to deem it desirable to make such announcements, early engagement with the Enforcement team (perhaps at or soon after scoping meeting stage) may be useful in order to try to obtain a clear indication of their intentions and the reasons for any proposed announcement and to enable firms to take steps to evaluate the merits of any challenges they may wish to pursue.