DEPP 6A.2 Deciding whether to take action

The FCA1 will consider the full circumstances of each case and determine whether it is appropriate to impose a suspension, restriction, condition,3 limitation or disciplinary prohibition3.2 The FCA1 will usually make this decision at the same time as it determines whether or not to impose a financial penalty or a public censure.

The FCA1 will take into account relevant factors in deciding whether it is appropriate to impose a suspension, restriction, condition,3 limitation or disciplinary prohibition3.2 These may include factors listed in DEPP 6.2. There may also be other factors, not listed in DEPP 6.2, that are relevant.

The FCA1 will consider it appropriate to impose a suspension, restriction, condition,3 limitation3 or disciplinary prohibition3 where it believes that such action will be a more effective and persuasive deterrent than the imposition of a financial penalty alone. This is likely to be the case where the FCA1 considers that direct and visible action in relation to a particular breach is necessary. Examples of circumstances where the FCA1 may consider it appropriate to take such action2 include:

1. (1)

   where the FCA1 (or any previous regulator) has taken any previous disciplinary action resulting in adverse findings against the person;

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2. (2)

   where the FCA1 has previously taken action in respect of similar breaches and has failed to improve industry standards;

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3. (3)

   where the person has failed properly to carry out an agreed redress package or other agreed remedial measures;

4. (4)

   where the misconduct appears to be widespread across a number of individuals across a particular business area (suggesting a poor compliance culture);

5. (5)

   where the person's competitive position in the market has improved as a result of the breach;

6. (6)

   if, in accordance with DEPP 6.5D, the FCA1 considers that a proposed penalty would cause the subject of enforcement action serious financial hardship and that it is appropriate to reduce the proposed penalty;4

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7. (7)

   where, in view of the nature and seriousness of an approved person’s misconduct, the FCA considers it appropriate to impose a limitation on part or all of their approval; and3

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8. (8)

   3where, in view of the nature and seriousness of an individual’s misconduct, the FCA considers it appropriate to impose a disciplinary prohibition.

The FCA1 expects usually to impose a suspension, restriction, condition or limitation in relation to4 activities directly linked to the breach. However, in certain circumstances the FCA1 may also impose a suspension, restriction, condition or limitation in relation to4 activities that are not directly linked to the breach, for example, where an authorised person's relevant business area no longer exists or has been restructured.

1For the purposes of section 89S(1)(d) of the Act, the FCA expects usually to suspend the approval of a primary information provider.

1. (1)

   5For the purposes of section 312T of the Act, the FCA will apply its usual supervisory and enforcement approaches and respond to compliance issues as they arise. The FCA may take enforcement action against critical third parties in respect of the services that they provide to firms and financial market infrastructure firms (FMIs), when appropriate and proportionate.

2. (2)

   The FCA may take enforcement action if a critical third party has:

   1. (a)

      ignored a direction;

   2. (b)

      contravened a requirement imposed upon it; or

   3. (c)

      breached any rules which may be in force imposing duties on critical third parties in connection with the provision of services to authorised persons.

3. (3)

   When taking enforcement action, the FCA will apply its existing approach to enforcement as set out in DEPP, EG and on its website.