The UK Financial Conduct Authority is consulting on significant proposed changes to its Decisions Procedure and Penalties Manual, known as DEPP, which governs how financial penalties are calculated and imposed.
The consultation, which closes on 10 August 2026, covers a range of technical but potentially far-reaching amendments that signal a more assertive enforcement posture from the regulator.
Taken together, the proposals suggest the FCA is seeking to sharpen individual accountability and ensure its penalty regime retains meaningful deterrent force over time.
One of the most notable changes is a proposed increase to the minimum initial disciplinary penalty for serious market abuse committed by individuals, which has remained at £100,000 since 2010.
The FCA is proposing to raise that floor to £150,000 to account for inflation, with an automatic inflation-linked adjustment to follow on 1 May every two years thereafter.
The regulator is also seeking to clarify when it can increase penalties by reference to an individual’s personal wealth, addressing what it describes as a perceived ambiguity in the current wording of DEPP.
Under the proposed changes, the FCA would align its approach to non-market abuse cases with the broader standard already applied in market abuse cases, allowing penalties to be increased where they may not act as a deterrent in light of an individual’s income or net assets.
The consultation also proposes updates to how deferred and contingent remuneration is treated when calculating penalties, following two Upper Tribunal decisions in 2025, Staley v FCA and Gonzalez v FCA, which addressed precisely this issue.
Under the codified approach, benefits received after a misconduct period but earned during it would count as relevant income, while benefits known to be unreceivable at the time of calculation would not.
The FCA is additionally proposing to increase the income and capital thresholds used to assess whether paying a penalty would cause an individual serious financial hardship, raising those thresholds by 50% to £21,000 for income and £24,000 for capital.
The regulator has also confirmed that the disgorgement element of any penalty, representing the financial benefit derived from misconduct, would not be reduced on serious financial hardship grounds.
Further proposed changes would introduce greater flexibility around who makes settlement decisions in cases referred from the Market Oversight Directorate, which handles matters such as market abuse and listings misconduct.
The consultation also includes amendments to bring cryptoasset market abuse within the existing DEPP penalty framework, reflecting the FCA’s expanding regulatory remit over digital assets.
These proposals align with what the FCA has described internally as a credo of “impactful deterrence,” and firms subject to FCA supervision may need to reconsider how remuneration structures and settlement strategies affect their penalty exposure.