UK financial regulator plans bigger fines after court setbacks

The Financial Conduct Authority is preparing to change how it sets fines after court rulings exposed limits in its current penalty framework, according to a report published on June 15, 2026.

The regulator is weighing a series of rule changes that would let it impose larger penalties on some wealthy individuals and serious market abuse respondents. The proposals include an explicit ability to increase fines for deterrence when other punishments, such as employer action, have already reduced the income base used in a case.

It is also considering treating net wealth more heavily when setting penalties for people whose annual income may understate their real resources. Another proposal would stop the FCA from counting bonuses earned in earlier periods as income during the misconduct period.

Why the FCA is moving

The reported changes come after a tribunal reduced the FCA fine imposed on former Barclays chief Jes Staley from £1.8 million to £1.1 million, while upholding his ban.

The tribunal said the regulator should not have included deferred share payments later cancelled by Barclays in its income calculation. That ruling matters because it showed how compensation and clawbacks can leave the FCA with a lower income base than it intended when it designed the penalty.

For the FCA, the problem is not just one case. The regulator appears to believe that its current rules can understate deterrence when pay is cancelled, clawed back or otherwise excluded from the income calculation, even where the misconduct finding remains in place.

What may change

One of the key options under discussion is an increase for deterrence provision. That would give the FCA a clearer basis to lift a fine when the normal formula produces a penalty it regards as too low to achieve its enforcement aims.

The regulator is also looking at whether annual income should carry less weight when a respondent has substantial assets. The aim would be to avoid the mismatch that can arise when a person with a low salary but high net wealth receives a comparatively modest fine.

The FCA is separately considering a rule to stop counting bonuses earned in prior periods as income during the misconduct period. In practice, that would narrow the room for respondents to argue that money paid for earlier work should reduce the penalty calculation for later misconduct.

For serious market abuse cases, the FCA is proposing to raise the minimum fine from £100,000 to £150,000. It also wants that floor to rise with inflation every two years.

The regulator is likewise planning to update financial-hardship thresholds so they reflect inflation. That suggests the FCA is trying to tighten penalties at the top end while also refreshing the rules it uses to judge when a fine would be unduly burdensome.

The Staley backdrop

Staley’s case is the clearest public example of the problem the FCA is trying to address. He was found to have misled the watchdog about his ties to Jeffrey Epstein, and the tribunal upheld the ban imposed on him.

But the financial penalty was reduced after the tribunal rejected part of the FCA’s income calculation. In particular, it found the regulator should not have included deferred share payments that Barclays later cancelled.

That outcome gave the FCA a high-profile setback even though the underlying misconduct finding was not overturned. It also showed how enforcement cases against senior executives can be reshaped by the details of pay, bonuses and clawbacks.

Who would be affected

The most direct impact would be on wealthy individuals, senior executives and others facing FCA enforcement action where income-based calculations now produce lower penalties than the regulator wants.

Market abuse respondents could also face higher minimum fines if the proposed floor is adopted. That would be especially relevant in serious cases where the FCA wants to signal deterrence beyond any firm-specific or compensation-based consequences.

The policy shift also has reputational importance for the regulator itself. After losing part of a headline penalty calculation, the FCA has a clear incentive to show that its framework can still produce meaningful deterrent fines.

What happens next

The research packet does not show a formal consultation being published yet, so the exact wording and timing of any rule change remain unclear.

The next milestone to watch is whether the FCA publishes a consultation or other formal proposal setting out the new penalty framework in more detail. At that point, the regulator would have to explain how the new deterrence power, wealth-based treatment and revised market abuse floor would work in practice.

Market participants, lawmakers and respondents in future enforcement cases are likely to scrutinize any move that raises the minimum market abuse fine or changes how net wealth is treated. The central question is whether the FCA is making a targeted fix after the Staley setback or a broader overhaul of how it calibrates punishment.

For now, the report suggests the FCA is trying to close a gap exposed by the courts: a fine can still be cut even when the regulator wins the wider case. The proposed changes are meant to make the remaining penalty harder to reduce.