FCA Enforcement Notice: Responding to a Decision Notice and Tribunal Reference

Last updated: 5 May 2026

Quick answer

If the Financial Conduct Authority issues you a Warning Notice or Decision Notice, you have 28 days to respond. A Warning Notice gives you the chance to make representations to the Regulatory Decisions Committee (RDC) before any decision is finalised. A Decision Notice signals the FCA's settled view; you then have 28 days to refer the matter to the Upper Tribunal (Tax and Chancery Chamber). The Tribunal hears the case afresh, on the merits — it is not judicial review. The Tribunal can confirm, vary, or quash the FCA's decision and substitute its own. The FCA's enforcement powers under FSMA 2000 include unlimited fines, public censure, prohibition from regulated activity, withdrawal of authorisation, and (for individuals) a ban from working in financial services. Regulatory enforcement at this level is high-stakes — instruct specialist counsel from the moment a Warning Notice arrives.

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How an FCA enforcement case develops

FCA enforcement cases pass through a defined sequence. Knowing where you are in the sequence determines the procedural rights available.

1. Investigation under section 168 FSMA

The FCA appoints investigators under section 168 of the Financial Services and Markets Act 2000. The notice of appointment sets out the matter under investigation and the powers the investigators have — typically the powers under sections 171-173 to require interviews, documents, and information.

This is not yet enforcement. It is information-gathering. But what is said and provided here is used in later stages.

2. Interview under caution / compelled interview

The FCA can compel interviews. Section 171 FSMA empowers investigators appointed under section 168 to require attendance, the answering of questions, and the production of documents. Section 174 FSMA restricts the use of such compelled statements: they cannot be used in evidence against the interviewee in criminal proceedings (or proceedings for the imposition of penalties under section 123 FSMA on market abuse), unless the interviewee adduces evidence inconsistent with the statement or refers to it. Statements remain admissible in regulatory proceedings before the RDC and the Upper Tribunal.

Three points worth knowing:

• The interviewee has the right to be accompanied by a legal adviser
• The interviewee can be forced to answer (refusal is an offence)
• The privilege against self-incrimination operates in a limited form — it does not entitle the interviewee to refuse to answer
• The transcript can be used in disciplinary proceedings before the RDC and the Upper Tribunal

3. Settlement discussions

Many FCA cases settle. The FCA has formal published settlement discount levels: up to 30% for early settlement (Stage 1, before the Warning Notice is issued); up to 20% (Stage 2); up to 10% (Stage 3, before tribunal reference). After Stage 3, no discount is available.

Settlement involves a Settlement Agreement and a Final Notice. The Final Notice is published. The agreement is binding.

4. Warning Notice

If settlement is not reached, the FCA issues a Warning Notice under section 387 FSMA. The Warning Notice sets out:

• The action the FCA proposes to take
• The reasons (the alleged conduct, the relevant rules, the FCA's view of the seriousness)
• The right to make written and oral representations to the RDC

The Warning Notice is the moment to take stock. It is the first formal indication that the FCA has decided what it intends to do.

5. Representations to the RDC

The recipient has 28 days (extendable on application) to respond to the Warning Notice. The response — usually written, with an option for oral hearing — is the only formal opportunity to challenge the case before the Decision Notice is issued.

A good RDC response engages with:

• Each pleaded factual finding
• Each alleged breach of the FCA's rules or Principles
• The proposed sanction
• Mitigation
• Public-interest considerations

The RDC is a panel separate from the investigators. It is composed of senior FCA personnel and external (non-FCA) members. Hearings are private.

6. Decision Notice

After considering representations, the RDC issues a Decision Notice under section 388 FSMA. The Decision Notice sets out the action the FCA will take and the reasons.

The Decision Notice is the trigger for the Upper Tribunal route.

7. Reference to the Upper Tribunal

Within 28 days of the Decision Notice, the recipient can refer the matter to the Upper Tribunal (Tax and Chancery Chamber) under section 133 FSMA, governed by the Tribunal Procedure (Upper Tribunal) Rules 2008 — particularly Part 4 (financial services).

The Tribunal hears the case afresh on the merits. It is not judicial review. The Tribunal can:

• Confirm the FCA's decision
• Vary it (reduce the fine, narrow the prohibition, change the conditions)
• Quash it
• Substitute its own decision
• Remit the matter back to the FCA with directions

8. Final Notice

If no reference is made within 28 days, or after the Tribunal's decision, the FCA issues a Final Notice under section 390 FSMA. The Final Notice is published.

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The Tribunal — a fresh hearing on the merits

The Upper Tribunal is composed of senior judges and specialist non-legal members. A reference under section 133 FSMA gives the Tribunal full power to redetermine the matter.

What that means in practice:

• The Tribunal is not bound by any of the FCA's findings of fact
• The Tribunal is not bound by the FCA's view of seriousness or sanction
• The Tribunal hears live evidence from witnesses
• Both parties can call expert evidence
• Cross-examination of the FCA's investigators and witnesses is normal

This makes the Tribunal a substantive forum, not a paper review. It is also why Tribunal references are taken seriously by the FCA and lead to settlement in many cases.

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Sanctions the FCA can impose

The FCA's enforcement powers under FSMA 2000:

The Penalties Policy (DEPP 6) sets out a five-step framework:

1. Disgorgement (removal of any benefit)
2. Seriousness (a starting point linked to relevant revenue or income)
3. Aggravating and mitigating factors
4. Adjustment for deterrence
5. Settlement discount (where applicable)

A financial penalty calculation can run to many pages of analysis. Senior counsel will dissect each step in any RDC response and Tribunal reference.

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Section 56 prohibition and the senior managers regime

For individuals working in regulated firms, section 56 prohibition is the most career-defining sanction. A prohibition order means the person cannot perform any function in relation to any regulated activity carried on by any authorised person.

Prohibition is about fitness and propriety — typically engaged where:

• Dishonesty or lack of integrity is found
• Financial crime concerns are made out
• Repeated or serious failures to follow regulatory requirements
• The conduct shows the individual is not fit to operate in the industry

Under the Senior Managers and Certification Regime, senior managers carry personal accountability for the areas of the firm under their control. Conduct breaches by junior staff can lead to prohibition action against the senior manager who failed to oversee them.

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Costs

In FCA enforcement, the regulator does not normally seek costs from the firm or individual it has investigated. The FCA's investigation costs are funded from its supervisory levy.

But the costs you incur defending the case are substantial:

• RDC representation: £100,000-£500,000+ depending on complexity
• Tribunal reference: £200,000-£2 million+
• Expert evidence: variable; often £50,000-£250,000 for forensic accounting or specialist financial-services evidence

A firm's professional indemnity insurance often excludes regulatory penalties (which would be against public policy) but may cover defence costs. Check the policy early.

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Strategic considerations

Three points that recur in real cases.

1. Settle early or fight properly — the middle is expensive. A 30% Stage 1 settlement discount on a £5 million fine is £1.5 million. A late settlement at Stage 3 is only £500,000 of discount. Tribunal litigation costs can dwarf the marginal discount difference. Firms that decide to fight should commit to it; firms that decide to settle should settle early.

2. Public-interest narrative matters. The FCA's Final Notice is published and read by journalists, regulators in other jurisdictions, and counterparties. The narrative of the misconduct is as important as the fine. RDC representations and Tribunal references that change the narrative — even where they do not eliminate it — have lasting value.

3. Do not let regulatory and criminal strategy diverge. Many FCA cases run alongside SFO criminal investigations. Statements made in compelled FCA interviews are inadmissible in criminal proceedings against the interviewee, but the underlying documents and other witnesses' evidence are not. Co-ordination between regulatory counsel and criminal-defence counsel is essential from day one.

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Bundle preparation for the Upper Tribunal

A reference to the Upper Tribunal generates a substantial bundle. The Tribunal Procedure (Upper Tribunal) Rules 2008 prescribe pagination, indexing, and electronic format. A typical bundle:

• Section A: Pleadings (Reference Notice, Statement of Case, Reply)
• Section B: Witness statements
• Section C: Decision Notice and underlying FCA documents
• Section D: Compelled interview transcripts
• Section E: Trading records, internal audit reports, board minutes (firm cases)
• Section F: Expert reports
• Section G: Authorities

Bundles in FCA Tribunal references commonly run to 5,000-15,000 pages across multiple sub-bundles. The Tribunal expects:

• Continuous pagination throughout the e-bundle (in line with the Upper Tribunal's PDF e-bundle guidance)
• Hyperlinked index
• OCR for full searchability
• Bookmarks at section and document level

BundleCreator's Regulatory Law template handles the structure and produces a Tribunal-ready bundle in around 15 minutes per sub-bundle.

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Frequently asked questions

Can I appeal a Tribunal decision?

Yes — to the Court of Appeal, on a point of law only, with permission. The Court of Appeal does not redetermine facts. Tribunal findings of fact are protected.

What if the FCA refers me to the SDT or another regulator?

Cross-regulator referrals happen — for example, an FCA finding against a solicitor working in a regulated firm can lead to an SRA referral. Each regulator runs its own process; outcomes from one regulator are evidence (not proof) before another.

Will the Tribunal hearing be in public?

Generally yes. Privacy applications are decided case by case under the Tribunal Rules and are granted only where there is a clear public-interest reason.

How long does a Tribunal reference take?

12-24 months from reference to decision is typical for a complex case. Some references are settled before hearing; the FCA frequently revises its position once a substantive challenge is mounted.

Do I have to give evidence at the Tribunal?

No witness can be compelled to give evidence against themselves. But choosing not to give evidence in your own defence can be commented on by the Tribunal in its decision. Take careful tactical advice — this is a major strategic call.

Can I keep working while the case is pending?

Depends on the FCA's interim measures. The FCA can impose interim restrictions during investigation and can vary or restrict permission while the substantive case proceeds. If no interim restriction is in place, you can continue normal regulated activity until the Final Notice or substituted Tribunal decision.

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Further reading

• Financial Services and Markets Act 2000 — particularly Parts XI and XIV
• FCA Decision Procedure and Penalties Manual (DEPP) — the rulebook on enforcement procedure
• FCA Enforcement Guide (EG) — practice and approach
• Upper Tribunal (Tax and Chancery Chamber)
• Senior Managers and Certification Regime
• SRA Disciplinary Tribunal: Defending a Solicitor Against an SRA Referral
• Fitness to Practise: How GMC, NMC, and HCPC Hearings Differ