The FCA is giving its penalty rulebook a much-needed edit.

CP26/19, published on 15 June 2026, proposes changes to the FCA's Decision Procedure and Penalties Manual (DEPP) that would raise the minimum initial disciplinary penalty for serious individual market abuse cases from £100,000 to £150,000; clarify when income and net assets can justify a deterrence uplift; and extend the penalty framework to cryptoasset market abuse. The FCA is looking for comments on it by 10 August 2026.

DEPP is the mechanism by which the FCA calculates financial penalties. Parts of this mechanism have been running on settings that were last updated in 2010, while inflation, Upper Tribunal decisions and new cryptoasset powers have moved on. The result is a consultation that looks modest, but matters. 

Inflation reaches the penalty notice

The most eye-catching change is the proposed rise in the minimum initial disciplinary penalty for serious market abuse by individuals. For cases assessed at seriousness levels 4 or 5, the FCA proposes lifting the floor from £100,000 to £150,000.

The FCA's reasoning is plain. Market abuse can damage trust in UK markets, undermining market confidence. The regulator says serious market abuse needs focused deterrence and that the minimum penalty helps preserve that deterrent effect, even though reductions can still apply for proportionality, mitigation, settlement and serious financial hardship. The proposed £150,000 figure is therefore less a headline grab than an attempt to stop a sanction from 2010 from shrinking in real terms.

Wealth is part of the calculation

The second change concerns wealth. DEPP already allows the FCA to increase penalties where the figure may not deter an individual in light of income or net assets in market abuse cases, but there were some who interpreted, eg, DEPP 6.5B.4 in a limited way. The FCA wants to clarify that it may increase a penalty in all cases where it doesn't act as a deterrent given an individual's income or net assets.

A fixed penalty can sting one person and merely irritate another. By referring to income and net assets, the FCA is saying that deterrence must survive contact with personal balance sheets. For senior managers, directors and employees with complex remuneration, this point is designed to have a material impact.

Deferred pay gets its day in DEPP

The FCA also proposes to clarify how it treats deferred bonuses, pay and shares when calculating an individual's relevant income. The immediate spur is the Upper Tribunal's 2025 decisions in Staley v FCA and Gonzalez v FCA, which considered the treatment of deferred, unvested and other share awards when applying DEPP 6.

The proposed approach draws a line between income earned during the misconduct period and income that belongs elsewhere. Benefits received after the misconduct period may count if they were earned during it; benefits earned before that period should not count merely because they were received during it. The FCA also proposes to exclude benefits that it knows, when calculating the penalty, will never be received. This is the sort of clarification that only sounds dry until a bonus pool, a share award and an enforcement notice enter the same room.

Hardship thresholds catch up with living costs

There is a softer edge to the package. The FCA proposes to raise its serious financial hardship (SFH) thresholds for individuals from £14,000 to £21,000 in net annual income and from £16,000 to £24,000 in capital. It also proposes automatic CPIH-linked adjustments every two years from 1 May 2028. 

This change cuts in the other direction from the market abuse floor. It recognises that punishment still has to coexist with subsistence. The FCA's starting point is that serious financial hardship arises only where paying the penalty over a reasonable period, normally no more than three years, would push both income and capital below the relevant thresholds. Updating those numbers makes the policy more credible. A hardship test frozen in 2010 tells us more about the calendar than about hardship in 2026.

Crypto moves into the enforcement frame

Cryptoasset market abuse is the other reason this consultation matters. The FCA proposes consequential amendments so that its DEPP penalty framework covers crypto market abuse and reflects powers under the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026. That fits into a wider regulatory build-out: Parliament made the Cryptoassets Regulations in February 2026 to bring new cryptoasset activities within the FCA's remit.

These changes are about making sure that market abuse concepts do not stop at the edge of the traditional securities market. If inside information can move a cryptoasset price, the penalty book needs to reflect this.

A small consultation with sharp edges

The FCA also wants more flexibility in who makes settlement decisions in some cases, particularly where matters come from Market Oversight for investigation. That sits with the regulator's stated aim of acting faster and using expertise more efficiently. Speed matters in enforcement, but so does predictability. The regulator is trying to improve both without rewriting the whole manual.

For firms, senior managers, traders and advisers, the consultation deserves more than a polite skim through. It tells us how the FCA wants penalties to work in practice and ensure that it is ready for cryptoasset markets as the new regime comes into view. 

The message is plain enough. Fines should be predictable, but not comfortable. And the penalty book, like the markets it polices, has to keep moving.