ENF 11.8 Action involving other regulatory authorities
Some types of breach committed by firms and approved persons may potentially result not only in disciplinary action by the FSA, but also action by other regulatory authorities. These authorities could include, for example, the RIEs, the designated professional bodies, and the Society, as well as overseas authorities (action concerning criminal offences and liaison with other prosecuting authorities is dealt with separately in ENF 15).
A firm's breach on a prescribed market, for example, could lead to the FSA considering whether the firm has engaged in behaviour which falls within the market abuse provisions of the Act (section 123); the same breach could also constitute a breach by the firm of a rule of the relevant RIE. The FSA would also consider whether to take disciplinary action against an approved person for an act of misconduct if he was knowingly concerned in a breach of a rule by the firm, or if he had failed to comply with one of the Statements of Principle (see ENF 11.5). ENF 14 contains further guidance on market abuse cases which may involve not only potential action by the FSA, but also potential action by other regulatory authorities.
The FSA is developing operating arrangements with each of the relevant UK authorities concerning cases where more than one regulatory authority may have an interest. These arrangements will ensure that the FSA and the other authorities approach the cases in a co-ordinated, effective and efficient manner, and that those who are the subject of investigations or potential disciplinary action are treated fairly. Similarly, the FSA is involved in contributing to a number of international initiatives to enhance effective enforcement action where overseas authorities also have an interest.
- (1)
The FSA will examine the circumstances of each case, and consider, in the light of the relevant investigation, disciplinary and enforcement powers, whether it is appropriate for the FSA or another authority to take action to address the breach.
- (2)
It may be appropriate for both the FSA and the other authority or authorities to be involved, and for both to take action, in a particular case arising from the same facts. For example, it may be appropriate for the FSA to take disciplinary action against an approved person, and for another authority to take separate action against the firm.
- (3)
In other cases, it may be appropriate for both the FSA and another authority to take action against a firm or an approved person in relation to the same conduct. For example, a breach of RIE rules may be so serious as to justify the FSA varying or cancelling the firm'sPart IV permission, or withdrawing approval from approved persons, as well as action taken by the RIE.
Similar considerations will apply where an overseas authority is involved. If the conduct constitutes a breach of the relevant UK provisions, as well as constituting a breach of the laws of the overseas jurisdiction, both the FSA and the overseas authority will have an interest in taking action to protect their regulatory standards.