Partner Richard Cannon comments on the FCA’s disclosure processes in Law360

Partner Richard Cannon comments on the FCA’s recent announcement that it will be reviewing its disclosure processes in regulatory enforcement cases, and explores what this will mean for the future of the regulator.

Richard’s comments were published in Law360, 12 November 2024, and can be found here.

“With the FCA broadening its disclosure process in enforcement cases, it appears that the primary test for disclosure will now be subject relevance – not the impact of the material in undermining the regulator’s case or assisting that of those accused.

“This shift marks a key divergence from the practice of law enforcement agencies in criminal investigations, which is governed by the test in the Criminal Procedure and Investigations Act 1996 (CPIA) where material will only be disclosed if it assists the Defence or undermines the Prosecution. The FCA’s strategy is commonly known as the “keys to the warehouse approach” and arguably represents a dumbing down of the disclosure exercise from their side, as opposed to upskilling of disclosure teams.

“There are two potential side effects which can stem from this approach. The first of these is that the accused in regulatory enforcement cases now risk being swamped with case material which does not assist them, or undermine the FCA’s case. Moreover, in cases where the FCA are conducting regulatory enforcement action in parallel with a criminal investigation by a law enforcement agency, the FCA may disclose material which would not be disclosable in any criminal prosecution under the CPIA rules. This is where the exceptions of public interest or simply the principle of “inappropriate to do so” may come in.”