FCA’s Growing Use of VREQs: Why They’re No ‘Soft Option’ – Of Counsel, Priya Dave quoted in Global Investigations Review

New data from the Financial Conduct Authority shows a notable shift in how the regulator intervenes. While FCA enforcement operations have fallen by 45% over the past five years, the use of enforcement-backed voluntary requirements (VREQs) has grown by 48%, suggesting this tool is playing an increasingly prominent role.

However, experts have raised concerns about the impact of this shift on businesses. Although VREQs are intended as a supervisory tool, they can impose significant operational constraints while businesses work to address the FCA’s concerns. The resultant costs and time-constraints are considerable, which can make it difficult for firms to satisfy the regulator’s requirements and secure the lifting of a VREQ. And for some companies, the process could even be business-ending.

Priya Dave, Of Counsel at Corker Binning, explores the implications of this shift in regulatory enforcement activity, warning that VREQs are far from a “soft option” in Global Investigations Review.

As Priya explains, “VREQs and own initiative requirements…can have really significant consequences for companies, sometimes just as fatal, if not more fatal, than enforcement action.”

Read the full article here.