DEPP 6.6 Financial penalties for late and incomplete submission of reports

1. (1)

   The FSA attaches considerable importance to the timely submission by firms of reports. This is because the information that they contain is essential to the FSA's assessment of whether a firm is complying with the requirements and standards of the regulatory system and to the FSA's understanding of that firm's business.

2. (2)

   DEPP 6.6.1 G to DEPP 6.6.5 G set out the FSA's policy in relation to financial penalties for late submission of reports and is in addition to the FSA's policy relating to financial penalties as set out in DEPP 6.5 to DEPP 6.5D.1

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In addition to the factors considered in Step 2 for cases against firms (DEPP 6.5A) and cases against individuals (DEPP 6.5B),1 the following considerations are relevant.

1. (1)

   In general, the FSA's approach to disciplinary action arising from the late submission of a report will depend upon the length of time after the due date that the report in question is submitted.

2. (2)

   If the person concerned is an individual, it is open to him to make representations to the FSA as to why he should not be the subject of a financial penalty, or why a lower penalty should be imposed. If he does so, the matters to which the FSA will have regard will include the matters set out in DEPP 6.5B1. It should be noted that an administrative difficulty such as pressure of work does not, in itself, constitute a relevant circumstance for this purpose.

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3. (3)

   The FSA will have regard to repeated failures to submit reports on time. In the majority of cases involving such repeated failure, the FSA considers that it will be appropriate to seek more serious disciplinary sanctions or other enforcement action, including seeking to apply for the cancellation of the firm's permission.

4. (4)

   The FSA will also have regard to the submission frequency of the late report when assessing the seriousness of the contravention. For example, a short delay in submitting a weekly or monthly report can have serious implications for the supervision of the firm in question. Such a delay may therefore be subject to a higher penalty than might otherwise be the case.

[Note: For the purposes of DEPP 6.6.2 G, “firm” has the special meaning given to it in DEPP 6.5.1.]1

In addition, in appropriate cases, the FSA may bring disciplinary action against the approved persons within the firm's management who are ultimately responsible for ensuring that the firm's reports are completed and returned to the FSA.

In applying the guidance in this section, the FSA may treat a report which is materially incomplete or inaccurate as not received until it has been submitted in a form which is materially complete and accurate. For the purposes of the guidance, the FSA may also treat a report as not received where the method by which it is submitted to the FSA does not comply with the prescribed method of submission.

In most late reporting cases, it will not be necessary for the FSA to appoint an investigator since the fact of the breach will be clear. It follows that the FSA will not usually send the firm concerned a preliminary findings letter for late-reporting disciplinary action.