As the global COVID-19 emergency rapidly unfolded around the world in the first quarter of 2020, financial enforcement penalties continued to rise. Corlytics tracked a 50% increase in global regulatory enforcement fines compared to the same period the year before. During the first quarter of 2020, global regulators levied more than $3.1 billion in monetary fines, compared to $2bn in the first quarter of 2019, with no signs of levels reducing into Q2.
ENFORCEMENT DATA 2019 AND Q.1 2020 (cumulative)
“Risk-based supervision and enforcement activity more critical than ever”
FATF (Financial Action Task Force)
DECLINING ENFORCEMENT ACTIVITY
In parallel with the swift response from regulators around the world to reorganise work programs and help manage the impact of COVID 19 on the industry, the overall levels of enforcement activity declined from a quarterly average of 143 in 2019. The number of enforcement actions in Q1 2020 fell by nearly two-thirds from 172 in Q1 2019 to 65 in Q1 2020 with the trend continuing through April.
ENFORCEMENT ACTIVITY 2019 & Q.1 2020 (cumulative)
Regulators in Asia were the first to scale back enforcement activity and the trend is expected to follow in other jurisdictions as regulators reprioritize plans and re-focus their resources. The FCA was clear in its business plan for the year ahead that it expects its work to be fundamentally reshaped by the impact of the pandemic. In practice operational restrictions will also impact logistical aspects of enforcement for all regulators including face-to-face interviews and on-site inspections. ASIC has said that “Enforcement action will continue. However, it is recognised that there may be some changes to the timing and process of investigations to take into account the impact of COVID-19. There will also be changes due to, among other things, constraints created by variations to usual court procedures.”
ENFORCEMENT ACTIVITY 2019 & Q.1 2020