ENF 11.2 Introduction

Disciplinary measures are one of the regulatory tools available to the FSA. They are not the only tool, and it may be appropriate to address many instances of non-compliance without recourse to disciplinary action. However, the effective and proportionate use of the FSA's powers to enforce the requirements of the Act, the rules and the Statements of Principle will play an important role in buttressing the FSA's pursuit of its regulatory objectives. The imposition of disciplinary measures (that is, financial penalties, public censures and public statements) shows that regulatory standards are being upheld and helps to maintain market confidence, promote public awareness of regulatory standards and deter financial crime. An increased public awareness of regulatory standards also contributes to the protection of consumers.

The disciplinary measures available to the FSA under Part V (Performance of Regulated Activities) and Part XIV (Disciplinary Measures) of the Act are:

1. (1)

   public statements and public censures (described in ENF 12); and

2. (2)

   financial penalties (described in ENF 13).

ENF 11 Annex 1 G and ENF 11 Annex 2 G contain diagrams describing how these disciplinary measures may apply to firms and approved persons respectively.

Other measures are available to the FSA where it considers it is necessary to take protective or remedial action, (rather than disciplinary action) or where a firm's continuing ability to meet the threshold conditions or where an approved person's fitness and propriety to perform the controlled functions to which his approval relates, is called into question. These include:

1. (1)

   the variation or cancellation of permission and the withdrawal of a firm'sauthorisation (described in ENF 3 and ENF 5);

2. (2)

   the withdrawal of an individual's status as an approved person (described in ENF 7); and

3. (3)

   the prohibition of an individual from performing a specified function in relation to a regulated activity (described in ENF 8).

Additional considerations apply in determining whether to take enforcement action for market abuse cases (section 123 of the Act (Power to impose penalties in cases of market abuse)). These are described in ENF 14 (Sanctions for market abuse). The Act also gives the FSA criminal prosecution powers in relation to insider dealing and misleading statements and practices offences. These are described in ENF 15 (Prosecution of criminal offences).