EG 19.26 1OTC Derivatives, Central Counterparties and Trade Repositories Regulations 2013

1The FCA has information gathering and sanctioning powers under the Act which are applicable to breaches of EMIR requirements by authorised persons or recognised bodies. The OTC derivatives, CCPs and trade repositories regulation adds to the powers available to the FCA for dealing with breaches of EMIR requirements and sets out information gathering and sanctioning powers enabling the FCA to investigate and take action for breaches of the EMIR requirements by non- authorised counterparties and for certain breaches of the OTC derivatives, CCPs and trade repositories regulation by authorised persons. Such powers under the OTC derivatives, CCPs and trade repositories regulation or the Act do not extend to breaches of article 11(3) and (4) of EMIR by PRA-authorised financial counterparties. The FCA has additional powers in relation to trade repositories under the Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc., and Transitional Provision) (EU Exit) Regulations 2018 (see EG 19.40). 2

1The FCA may require a non-authorised counterparty that is subject to obligations under EMIR to provide specified information or specified documents so that it can verify whether the non-authorised counterparty has complied with EMIR. The FCA also has the power to require a person to provide specified information or specified documents so that it can verify whether the person is subject to EMIR. The FCA may require the above information to be provided in such form, or to be verified or authenticated in such manner, as is reasonably required in connection with the exercise of the FCA's functions under EMIR.

1. (1)

   1The FCA has the power to publish a statement or impose a financial penalty of such amount as it considers appropriate on:

   1. (a)

      a financial counterparty who is not an authorised person, a non- financial counterparty or any other person who has breached an EMIR requirement or regulation 7 or 8 of the OTC derivatives, CCPs and trade repositories regulation;

   2. (b)

      a financial counterparty who is an authorised person who has breached regulation 8 of the OTC derivatives, CCPs and trade repositories regulation.

2. (2)

   Where the FCA exercises its power to impose a financial penalty under the OTC derivatives, CCPs and trade repositories regulation or the Act for breaches in relation to EMIR a penalty, it must publish a statement to that effect unless such disclosure would seriously jeopardise the financial markets or cause disproportionate damage to the parties involved.

[Note: article 12(2) of EMIR and regulation 9(3) of the OTC derivatives, CCPs and trade repositories regulation]

1As the power to impose penalties for contravention of an EMIR requirement or regulations 7 or 8 of the OTC derivatives, CCPs and trade repositories regulation mirrors similar powers to that the FCA has under the Act, the FCA will adopt procedures and policies in relation to the use of those powers akin to those it has adopted under the Act, subject to EG 19.26.3(2).

1The FCA will use the sanctioning powers where it is appropriate to do so and with regard to the relevant factors listed in DEPP 6.2.1G and DEPP 6.4. In determining the appropriate level of financial penalty, the FCA will have regard to the principles set out in DEPP 6.5, DEPP 6.5A, DEPP 6.5B, DEPP 6.5D and DEPP 6.7.

1Where the FCA proposes or decides to take action to publish a statement or impose a financial penalty referred to in EG 19.26.3, it will give the person concerned a warning notice or a decision notice respectively. In the case of a public statement, the warning notice or decision notice will also set out the terms of the statement. In the case of a financial penalty, the warning notice or decision notice will also state the amount of the penalty. On receiving a warning notice, the person concerned has a right to make representations regarding the FCA's proposed decision. A person that receives a decision notice may refer the matter to the Tribunal.

1If it is proposing to publish a statement or impose a penalty under the OTC derivatives, CCPs and trade repositories regulation, the FCA's decision maker will be the RDC. The RDC will make its decisions following the procedure set out in DEPP 3.2 or where appropriate, DEPP 3.3.

1Sections 393 and 394 of the Act apply to notices referred to in this section. See DEPP 2.4 (Third party rights and access to FCA material).

1In relation to the notices in this section, the FCA will, subject to EG 19.26.3(2), apply the approach to publicity that is outlined in EG 6.

1In relation to authorised persons and recognised bodies which are subject to obligations under EMIR, other information gathering powers and sanctions may also be applicable under the Act.