FCA Disclosure Obligations: Avoid a Costly £99,600 Fine

FCA disclosure obligations are firmly back in the spotlight. The regulator has proposed a fine of £99,600 for Carlos Fuenmayor, CEO of BancTrust, over a failure to disclose information it considers material. The case is a timely reminder that, under the FCA’s rules, what you tell the regulator and when you tell them can matter just as much as the underlying issue itself.

Because the matter has been referred to the Upper Tribunal, the findings are provisional and may be challenged. The points below reflect the FCA’s position as it stands.

What the FCA has proposed

According to the FCA, three separate matters were not disclosed when they should have been: a US regulatory investigation and subsequent sanction, and the freezing of the individual’s Venezuelan bank accounts and those linked to his businesses. The regulator considers each of these material to his regulatory profile and to information provided on his application forms, yet says none were disclosed until much later.

For the FCA, the central problem is not only the events themselves but the fact that they were not reported at the time, which it says left the regulator making supervisory decisions without the full picture. The breaches were treated as negligent, with the FCA citing failures under APER Principle 4 and Senior Manager Conduct Rule 4.

What FCA disclosure obligations require

The case illustrates a principle that firms and senior managers are reminded of regularly. FCA disclosure obligations call for proactive, timely disclosure of anything the regulator would reasonably expect to know. Waiting until something surfaces elsewhere, or hoping it will not, rarely ends well.

Two points stand out. First, the obligation is ongoing and sits squarely with the individual, not only the firm. Second, it is not limited to UK matters. Overseas investigations, sanctions and financial issues are very much in scope where they could affect a person’s fitness and propriety.

The bar is deliberately broad. The test is not whether a matter feels comfortable to share, but whether the FCA would reasonably expect to know about it. Where there is any doubt, the safer course is almost always to disclose and let the regulator decide what is relevant.

What it means for firms and senior managers

For senior managers in particular, disclosure is not a “wait and see” exercise. The risk in cases like this is often not the original issue, but the decision not to raise it promptly. By the time the regulator finds out another way, a manageable disclosure can become a conduct concern.

In practice, meeting FCA disclosure obligations means making disclosure easy and hard to forget. That points to clear internal escalation routes, regular fitness and propriety attestations, and prompts that capture overseas and personal matters, not just UK regulatory ones. Senior managers should treat anything that could reasonably affect their regulatory standing as disclosable, and raise it early, clearly and in writing.

Embedding FCA disclosure obligations into everyday processes also means keeping a clear record of what was disclosed, when and to whom, so the firm can evidence its approach if questions arise later. Bringing disclosure into induction and ongoing training, and reflecting it in senior managers’ responsibilities, helps make timely reporting the default rather than an afterthought.

A provisional case, a clear message

As the matter is before the Upper Tribunal, the outcome is not yet settled and the proposed penalty may change. Even so, the regulatory message is consistent with everything the FCA has said about transparency: disclose promptly, disclose fully, and do not assume an issue will stay out of view.

If you would like to review how your firm captures and evidences disclosures under the Senior Managers and Certification Regime, speak to our team. You can read the FCA’s full announcement in its press release on the decision.