This chapter applies to firms, appointed representatives, approved persons, and other persons who may be subject to the FSA's investigations or who may be required to provide information to the FSA.

1The FSA's policy on how it will use its powers to investigate in support of its enforcement functions, when acting in the capacity of the competent authority under Part VI of the Act, are set out in ENF 21.2 to ENF 21.4. That guidance contains cross references to material in this Chapter, where relevant.

This chapter explains the FSA's policy on how it will use its powers to gather information and investigate in support of its enforcement functions. The FSA may also use some of these powers to support its supervision functions and the Supervision manual explains how it will use the powers in those circumstances (see SUP 2 (Information gathering by the FSA on its own initiative) andSUP 5 (Reports by skilled persons).

This chapter is divided into two parts. The first part of the chapter, ENF 2.3 to ENF 2.9, relates to the main provisions of the Act on information gathering and investigations. It outlines:

1. (1)

   the FSA's powers to gather information, and to appoint investigators;

2. (2)

   the powers of investigators appointed by the FSA; and

3. (3)

   the FSA's policy on the use of its powers in each of the following circumstances:

   1. (a)

      to gather information from firms and unauthorised incoming ECA providers and to conduct investigations of firms, approved persons, individuals involved in firms, appointed representatives, small e-money issuers and unauthorised incoming ECA providers, including issuing preliminary findings letters;21

   2. (b)

      to investigate suspected market misconduct;

   3. (c)

      to investigate unauthorised business;

   4. (d)

      to conduct investigations to assist overseas authorities; and

   5. (e)

      to investigate collective investment schemes.

The second part of the chapter, ENF 2.10 to ENF 2.15, relates to provisions that apply to investigations generally. It outlines:

1. (1)

   the provisions of the Act relating to protected items, banking confidentiality and the admissibility of statements made to investigators;

2. (2)

   the FSA's powers to control and direct investigations;

3. (3)

   the FSA's policy on:

   1. (a)

      notification to the person under investigation;

   2. (b)

      publicity;

   3. (c)

      use of voluntary interviews rather than compulsory ones; and

   4. (d)

      interview procedures; and

4. (4)

   the FSA's powers to enforce requirements on persons to cooperate with its information gathering and investigative powers.

The FSA's powers to gather information and to appoint investigators are contained in sections 165 to 169 and 284 of the Act. They are described in this section of the chapter under the following cross-headings:

1. (1)

   requiring information and documents from firms; (section 165: see ENF 2.3.2 G to ENF 2.3.7 G).

2. (2)

   reports on firms by skilled persons (section 166: see ENF 2.3.8 G to ENF 2.3.11 G);

3. (3)

   general investigations of firms and appointed representatives (section 167:ENF 2.3.12 G and ENF 2.3.13 G);

4. (4)

   Investigations of specific contraventions, offences and other matters (section 168: see ENF 2.3.14 G and ENF 2.3.15 G);

5. (5)

   investigations in support of overseas regulators (section 169: see ENF 2.3.16 G and ENF 2.3.17 G); and

6. (6)

   investigations into collective investment schemes (section 284: see ENF 2.3.18 G to ENF 2.3.21 G).

Section 165 of the Act (FSA's power to require information) relates to the FSA's powers to require information and documents from firms. There are two ways in which the FSA may do this.

1. (1)

   Under section 165(1), the FSA may, by notice in writing, require a firm to:

   1. (a)

      provide specified information or information of a specified description; or

   2. (b)

      produce specified documents or documents of a specified description.

   The firm must do this within a reasonable period of time, which the FSA will specify, at a specified place. The firm must provide the specified information in any form that the FSA may reasonably require.

2. (2)

   Under section 165(3), an officer authorised by the FSA may require a firm without delay to:

   1. (a)

      provide him with specified information or information of a specified description; or

   2. (b)

      produce to him specified documents or documents of a specified description.

Section 165 applies to information or documents that the FSA reasonably requires in connection with the exercise of functions given to it by or under the Act.

The FSA may also require that any information given is verified, and that documents are authenticated, in any way that the FSA may reasonably require.

1. (1)

   Under section 165(7), the FSA may also use the power to impose requirements to provide information or to produce documents on:

   1. (a)

      a person who is connected with a firm;

   2. (b)

      an operator, trustee or depositary of certain types of recognised collective investment schemes who is not an authorised person;

   3. (c)

      a recognised investment exchange or recognised clearing house.

2. (2)

   In this context a 'firm' includes a person who was an authorised person but who has now ceased to be one (section 165(8)).

Under section 165(11) a person is connected with a firm if he is or at any relevant time has been:

1. (1)

   a member of the firm's group;

2. (2)

   a controller of the firm;

3. (3)

   any other member of a partnership of which the firm is a member;

4. (4)

   a person mentioned in Part I of Schedule 15 to the Act (Information and Investigations: Connected Persons), such as the officer or manager of the firm if it is a corporate body.

The FSA may use its section 165 power to require information and documents from firms in support of both its supervisory functions and its enforcement functions. The FSA will often use this power in support of its supervision functions and SUP 2 (Information gathering by the FSA on its own initiative) deals with the FSA's use of the power in that context. For completeness, the use of the power is also referred to in ENF 2.5 in support of the FSA's enforcement functions in relation to firms.

Section 166 (Reports by skilled persons) relates to the FSA's power to require firms to provide a report by a skilled person. Under section 166, the FSA may require any of the following, who are or were at the relevant time carrying on a business, to provide it with a report on any matter about which the FSA has required or could require the provision of information or documents under section 165:

1. (1)

   a firm ('A');

2. (2)

   any other member of A's group;

3. (3)

   a partnership of which A is a member;

4. (4)

   a person who has at any relevant time been one of the above.

The FSA may specify the form in which it requires the report.

Under section 166(4) the person appointed to make the report must:

1. (1)

   be nominated or approved by the FSA; and

2. (2)

   appear to the FSA to have the skills necessary to report on the matter concerned.

1. (1)

   Section 166(5) applies to any person ('X') who is providing or has provided a person whom the FSA has required to provide a report ('Y') with services in relation to a matter about which the FSA has required the report.

2. (2)

   Under section 166(5), X has a duty to give the skilled person appointed to provide such a report ('Z') any assistance as Z may reasonably require. The FSA may apply for an injunction or, in Scotland, for an order for specific performance, to enforce this obligation.

As with its power to require information and documents, the FSA may use its section 166 power to require reports by skilled persons in support of both its supervision and enforcement functions. SUP 5 (Reports by skilled persons) contains rules and guidance that will apply whenever the FSA uses the power. ENF 2.5 refers briefly to the FSA's use of the power in support of its enforcement functions in relation to firms. As a result of article 9G of the Regulated Activities Order, the FSA has certain powers to require specified information and documents from a small e-money issuer and a power under section 166 to require a small e-money issuer to provide a report by a skilled person. These powers are described in ELM 8.7.1

Section 167 of the Act (Appointment of persons to carry out general investigations) relates to the appointment of investigators to conduct general investigations into firms and appointed representatives.

1. (1)

   Under section 167(1), if it appears to the FSA (or the Secretary of State) that there is good reason to do so, then the FSA (or the Secretary of State) may appoint one or more competent persons to conduct an investigation into:

   1. (a)

      The nature, conduct or state of the business of a firm or of an appointed representative; or

   2. (b)

      a particular aspect of that business; or

   3. (c)

      The ownership or control of a firm.

2. (2)

   Under Section 167(2), if the person appointed to investigate thinks it necessary for his investigation, he may also investigate the business of a person who is or has at any relevant time been:

   1. (a)

      a member of the group of which the person under investigation ('A') is part; or

   2. (b)

      a partnership of which A is a member.

3. (3)

   Under section 167(4) the FSA may also use this power in relation to a former firm or former appointed representative, concerning:

   1. (a)

      Business carried on at any time when it or he was an authorised person or appointed representative; or

   2. (b)

      The ownership or control of a former authorised person when it or he was an authorised person.

4. (4)

   In section 167 'business' includes any part of a business even if it does not consist of regulated activities.

2Under the ECD Regulations, the FSA may exercise the powers in sections 165 and 166 of the Act in relation to an incoming ECA provider, whether the provider is a firm or not. The FSA's policy on how it will use this power (and other information gathering investigation powers) in support of its enforcement function is set out in ENF 2.5 (The FSA's policy on exercising its powers: firms, approved persons, and others). In addition, under these regulations, the FSA may exercise the power under section 167 in relation to an unauthorised incoming ECA provider (the Act enables the FSA to appoint an investigator under section 167 to investigate any part of the business of an incoming ECA provider which is a firm).

Section 168 of the Act (Appointment of persons to carry out investigations in particular cases) relates to the conduct of investigations into certain specified contraventions, offences or other matters. The FSA's powers to appoint investigators are contained in section 168(3) and (5) and the circumstances in which it can do so are listed in section 168(1), (2) and (4) of the Act.

1. (1)

   Under section 168(1) and (3) the FSA may appoint one or more competent persons to carry out an investigation on its behalf if it appears to the FSA that there are circumstances suggesting that:

   1. (a)

      a person may have breached regulations made under section 142 of the Act (Insurance business: regulations supplementing FSA's rules); or

   2. (b)

      a person may be guilty of an offence under section 177 (Offences), 191 (Offences under Part XII), 346 (Provision of false or misleading information to auditor or actuary) or 398(1) (Misleading the FSA: residual cases) of the Act or under Schedule 4 to the Act (Treaty Rights).

2. (2)

   Under section 168(2) and (3) the FSA may appoint one or more competent persons to carry out an investigation on its behalf if it appears to the FSA that there are circumstances suggesting that:

   1. (a)

      an offence under section 24(1) (False claims to be authorised or exempt) or 397 (Misleading statements and practices) of the Act or under Part V of the Criminal Justice Act 1993 may have been committed; or

   2. (b)

      there may have been a breach of the general prohibition; or

   3. (c)

      there may have been a contravention of section 21 (Restrictions on financial promotion) or 238 (Restrictions on promotion of collective investment schemes) of the Act; or

   4. (d)

      market abuse may have taken place.

3. (3)

   Under section 168(4) and (5) the FSA may appoint one or more competent persons to carry out an investigation on its behalf if it appears to the FSA that there are circumstances suggesting that:

   1. (a)

      a firm may have breached the requirement for permission in section 20 of the Act (Authorised persons acting without permission); or

   2. (b)

      a person may be guilty of an offence under the Money Laundering Regulations; or

   3. (c)

      a firm may have breached a rule made by the FSA; or

   4. (d)

      an individual may not be a fit and proper person to perform functions in relation to a regulated activity carried on by an authorised or exempt person; or

   5. (e)

      an individual may have performed or agreed to perform a function in breach of a prohibition order; or

   6. (f)

      a firm or an exempt person may have failed to comply with section 56(6) of the Act (Prohibition orders); or

   7. (g)

      a firm may have failed to comply with section 59(1) or (2) of the Act (Approval for particular arrangements); or

   8. (h)

      a person to whom the FSA has given its approval under section 59 may not be a fit and proper person to perform the function to which that approval relates; or

   9. (i)

      a person may be guilty of misconduct for the purposes of section 66 of the Act.

4. (4)

   As a result of regulation 12 of the ECD Regulations, the FSA may also appoint investigators under section 168(4)(c) and (5) where it appears to the FSA that there are circumstances suggesting that an incoming ECA provider, whether a firm or not, may have breached a requirement imposed by the FSA under those regulations.21

The FSA may use these powers to investigate firms, approved persons, individuals employed by firms, and small e-money issuers as well as cases of market misconduct and breaches of the general prohibition. The FSA's policies on the use of this power are therefore set out in three different sections of this chapter:

1. (1)

   ENF 2.5 deals with the use of this power and other powers in relation to firms, approved persons, individuals employed by firms, appointed representatives, small e-money issuers, and unauthorised incoming ECA providers;2

2. (2)

   ENF 2.6 deals with the use of this power in relation to cases of market misconduct; and

3. (3)

   ENF 2.7 deals with the use of this power in relation to unauthorised business.1

Investigations in support of overseas regulatorsSection 169 of the Act (Investigations etc. in support of overseas regulators) relates to investigations conducted to assist an overseas regulator. It states that at the request of an overseas regulator, the FSA may use its powers to require documents or information under section 165 or to appoint a person to investigate any matter. ENF 2.8.4 G to ENF 2.8.6 G set out the matters that the FSA must, or may, take into account when considering whether to use these powers in support of an overseas regulator.

The FSA's policy on how it will use this power is set out in section ENF 2.8.

Section 284(1) of the Act (Power to investigate) relates to the FSA's powers to investigate the affairs of collective investment schemes. Under section 284, if it appears to the FSA that it is in the interests of the participants or potential participants, or that the matter is of public concern, it may appoint one or more competent persons to investigate and report on:

1. (1)

   the affairs of, or of the manager or trustee of, any authorised unit trust scheme;

2. (2)

   the affairs of, or of the operator, trustee or depositary of, any recognised scheme that relate to its activities carried on in the UK; or

3. (3)

   the affairs of, or of the operator, trustee or depositary of, any other collective investment scheme except a body incorporated by virtue of regulations under section 262 of the Act (that is, an open-ended investment company).

Section 284(2) states that an investigator appointed under section 284(1) to investigate the affairs of, or of the manager, trustee, operator or depositary of, any scheme may also, if he thinks it necessary for the purposes of that investigation, investigate:

1. (1)

   the affairs of, or of the manager, trustee, operator or depositary of, any other scheme that is mentioned in section 284(1) whose manager, trustee, operator or depositary is the same person as the manager, trustee, operator or depositary of the scheme;

2. (2)

   the affairs of other schemes and persons (including bodies incorporated by virtue of regulations under section 262 of the Act (Open-ended investment companies) and the directors and depositaries of those bodies) as may be prescribed.

Regulations to be made by the Treasury will also give the FSA powers to appoint investigators to investigate and report on the affairs of ICVCs, or directors or depositaries of ICVCs.

The FSA's policy on how it will use its power under section 284 of the Act is set out in ENF 2.9.

The nature and extent of an investigator's powers depend on the provision of the Act under which he was appointed.

1. (1)

   The powers of an investigator appointed under section 167 of the Act (Appointment of persons to carry out general investigations) are contained in section 171 (Powers of persons appointed under section 167) and 175 (Information and documents: supplemental provisions) of the Act and are described in ENF 2.4.2 G to ENF 2.4.5 G and ENF 2.4.10 G to ENF 2.4.12 G.

2. (2)

   The powers of an investigator appointed under section 168 of the Act (Appointment of persons to carry out investigations in particular cases) depend on whether he is appointed to investigate the matters listed in section 168(1) and (4) (see ENF 2.3.14 G (1) and ENF 2.3.14 G (3)) or those listed in section 168(2) (see ENF 2.3.14 G (2)):

   1. (a)

      the powers of an investigator appointed as a result of section 168(1) or (4) are contained in sections 172 (Additional power of persons appointed as a result of section 168(1) or (4)) and 175 (Information and documents: supplemental provisions) and are described in ENF 2.4.6 G to ENF 2.4.7 G and ENF 2.4.10 G to ENF 2.4.12 G;

   2. (b)

      The powers of an investigator appointed as a result of section 168(2) are contained in sections 173 (Powers of persons appointed as a result of section 168(2)) and 175 (Information and documents: supplemental provisions) and are described in ENF 2.4.8 G and ENF 2.4.10 G to ENF 2.4.12 G.

3. (3)

   The powers of an investigator (appointed under section 169 of the Act (Investigations etc. in support of overseas regulator) are the same as those of an investigator appointed as a result of section 168(1) (see ENF 2.4.9 G, ENF 2.4.6 G to ENF 2.4.7 G and ENF 2.4.10 G to ENF 2.4.12 G).

4. (4)

   The powers of an investigator appointed under section 284 of the Act (Power to investigate) are contained in section 284(3) and are described in ENF 2.4.13 G.

Section 171 states that an investigator conducting a general investigation under section 167 of the Act may require the person who is the subject of the investigation or any person connected with the person under investigation:

1. (1)

   to attend before the investigator at a specified time and place to answer questions; or

2. (2)

   otherwise to provide such information as the investigator may require.

Under section 171(2) the investigator may also require any person to produce at a specified time and place any specified documents or documents of a specified description.

However, under section 171(3), the investigator may only impose requirements referred to in ENF 2.4.2 G and ENF 2.4.3 G) so far as he reasonably considers the question, provision of information or production of the document to be relevant to the purposes of the investigation.

For the purposes of section 171 (see ENF 2.4.2 G) , a person is connected with the person under investigation ('A') if he is or has at any relevant time been:

1. (1)

   a member of A's group; or

2. (2)

   a controller of A; or

3. (3)

   a partnership of which A is a member; or

4. (4)

   in relation to A, a person mentioned in Part I or II of Schedule 15 to the Act (Information and Investigations: Connected Persons).

Section 172 states that an investigator appointed as a result of section 168(1) or (4) will have the powers given by section 171, which are described in ENF 2.4.2 G to ENF 2.4.5 G. Under section 172(2), he will also have the power to require a person who is not the subject of the investigation, nor a person connected with the person under investigation, to attend before him at a specified time and place and answer questions, or otherwise to provide such information as he may require, for the purposes of the investigation.

The investigator may only impose a requirement under section 172(2) if satisfied that this is necessary or expedient for the purposes of the investigation.

Section 173 sets out the powers of an investigator appointed as a result of section 168(2) (see ENF 2.3.14 G (2)). Under section 173, if an investigator considers that any person is or may be able to give information which is or may be relevant to the investigation, he may require that person:

1. (1)

   to attend before the investigator at a specified time and place and answer questions;

2. (2)

   otherwise to provide such information as the investigator may require for the purposes of the investigation;

3. (3)

   to produce at a specified time and place any specified documents or documents of a specified description which appear to the investigator to relate to any matter relevant to the investigation;

4. (4)

   to give the investigator all assistance in connection with the investigation which he is reasonably able to give.

Section 169(2) states that an investigator appointed in support of an overseas regulator under section 169(1)(b) has the same powers as an investigator appointed as a result of section 168(1) (see ENF 2.4.6 G to ENF 2.4.7 G and ENF 2.4.10 G to ENF 2.4.12 G).

Section 175 provides that if the FSA, or an investigator appointed by it under Section 167 or 168 of the Act, has the power to require a person to produce a document but that it appears that the document is in the possession of a third person, the FSA or investigator may use that power in relation to the third person.

Section 175(2) states that the person to whom the document is produced may take copies or extracts from the document, or require the person producing the document ('A') or any relevant person to provide an explanation of it. Under section 175(7) a relevant person means a person who:

1. (1)

   has been or is or is proposed to be a director or controller of A; or

2. (2)

   has been or is an auditor of A; or

3. (3)

   has been or is an actuary, accountant or lawyer appointed or instructed by A; or

4. (4)

   has been or is an employee of A.

Section 175(3) states that if a person who is required to produce a document fails to do so, the FSA or an investigator may require him to state, to the best of his knowledge and belief, where the document is. ENF 2.10.2 G explains the provisions of section 413 of the Act (Protected items) relating to communications or items that a person may not be required to produce, disclose, or allow to be inspected.

Section 284(3) states that if an investigator appointed under section 284 of the Act ('B') considers that a person ('C') is or may be able to give information which is relevant to the investigation, B may require C:

1. (1)

   to produce to B any documents in C's possession or under his control which appear to B to be relevant to the investigation;

2. (2)

   to attend before him; and

3. (3)

   Otherwise to give B all assistance in connection with the investigation which C is reasonably able to give; and

that it is C's duty to comply with that requirement.

ENF 2.5.2 G to ENF 2.5.11 G refer to the FSA's policies on using its powers to require information and reports from firms and others(which are explained in SUP 2 (Information gathering by the FSAon its own initiative) and SUP 5 (Reports by skilled persons)). They also set out the FSA's policy on using its powers to carry out investigations into the affairs of firms, approved persons, individuals involved in firms, appointed representatives, small e-money issuers 1and unauthorised incoming ECA providers.2 The powers available to the FSA are summarised in ENF 2 Annex 3 G.

Section 165 of the Act (FSA's power to require information) gives the FSA powers to require the provision of information and documents from firms. Under the ECD Regulations, the FSA may exercise the power under section 165 (and section 166) in relation to an incoming ECA provider, whether the provider is a firm or not.2

The FSA may require the provision of information and documents under section 165 of the Act if it reasonably requires them, in connection with the exercise of the functions conferred on it by or under the Act (section 165(4)). This power may be used in a range of circumstances and for different purposes, such as supervision, including routine supervisory activities, and consumer education (see SUP 2).

If the information available to the FSA raises a regulatory concern about a firm, an approved person's conduct or fitness and propriety, a small e-money issuer or an unauthorised incoming ECA provider, the FSA may need to make further enquiries by using its powers to require reports by skilled persons or to appoint investigators. The nature of the FSA's enquiries will depend on the nature and seriousness of its concerns and on the attitude of the firm, small e-money issuer or unauthorised incoming ECA provider concerned.21

The types of concern that may prompt the FSA to make further enquiries into a firm cannot be listed exhaustively. They will extend to any matter which relates to a firm's business and to the FSA's performance of its statutory functions, having regard to its regulatory objectives. Broadly speaking, they will include circumstances which suggest that:

1. (1)

   a firm, or an approved person within a firm, may have acted in a way which prejudiced the interests of consumers;

2. (2)

   a firm, or an approved person within a firm, may have acted in breach of the requirements of the legislation or the rules;

3. (3)

   a firm may no longer meet the threshold conditions or an approved person within a firm may not be a fit and proper person to perform a controlled function;

4. (4)

   a firm may have been used or may be being used for the purposes of financial crime including money laundering;

5. (5)

   the FSA should be concerned about the ownership or control of a firm, including whether a person who has acquired influence over the firm meets the requirements for FSA approval;

6. (6)

   the conduct of certain types of regulated activities in which a firm is involved are a cause of serious public concern.

If the FSA decides that it should use its statutory powers to make further enquiries, it will have regard to the objectives of those enquiries, and the relative effectiveness of its available powers to achieve those objectives. For example:

1. (1)

   if the FSA's objectives are limited to gathering historic information or evidence for determining whether enforcement action may be appropriate, the FSA's information gathering and investigation powers under sections 165, 167 and 168 of the Act are likely to be more effective and more appropriate than the power under section 166 (Reports by skilled persons) (see ENF 2.3.2 G to ENF 2.3.15 G); and

2. (2)

   if the FSA's objectives include obtaining expert analysis or recommendations (or both) for remedial action, the power under section 166 may be an appropriate power to use, instead of, or in conjunction with, the FSA's other available powers.

SUP 5 contains guidance on the FSA's use of the section 166 power, including guidance on the appointment and reporting process. It also contains rules and guidance on the duties of firms which are subject to section 166 requirements, and guidance on the contractual duties of skilled persons appointed as a result of section 166 requirements. The rules and guidance in SUP 5 apply whenever the FSA uses the section 166 power.

1. (1)

   In some circumstances, the provision of a report by a skilled person under section 166 may not be appropriate, or may be insufficient (because of the limited nature of the power) to address the seriousness of the FSA's concerns. This will include cases where an effective and thorough investigation by the FSA is likely to call for the exercise of powers to require the firm, connected persons, small e-money issuer, or unauthorised incoming ECA provider to answer questions and/or produce documents. In those cases, the FSA will appoint an investigator under section 167 or 168 of the Act, if appropriate the FSA may also require the firm, small e-money issuer or unauthorised incoming ECA provider to provide a skilled person's report under section 166. In other cases, the FSA may appoint an investigator, under section 167 or 168, as a result of information in a report under section 166.1

2. (2)

   Investigators will usually be members of the FSA's staff.2

Where the FSA has general concerns about a firm, an appointed representative or an unauthorised incoming ECA provider, but the circumstances do not at that stage suggest any specific breach or contravention, it will rely on its power under section 167 of the Act and, if it appears that there are good reasons for doing so, the FSA will appoint investigators to investigate the business of a firm, an appointed representative or an unauthorised incoming ECA provider.2

Where it appears to the FSA that circumstances suggest the contraventions or offences set out in section 168 of the Act (listed in ENF 2.3.14 G) may have happened, the FSA will appoint investigators under section 168. These powers are wider than those available to investigators under section 167 (see ENF 2.4.2 G to ENF 2.4.8 G). An investigator appointed under section 168 may also require persons who are neither the subject of the investigation, nor connected with the person under investigation, to attend before him, and to answer questions and provide information. In addition, where the investigator is appointed as a result of section 168(2), those persons may also be required to provide all assistance to the investigator that they are reasonably able to give.

In some cases, where the FSA has appointed investigators into a firm or an unauthorised incoming ECA provider2 under section 167 of the Act, it may decide that it is appropriate to extend the appointment to cover matters under section 168 of the Act as well, if circumstances suggest that one of the specific contraventions, breaches or offences listed in ENF 2.3.14 G may have occurred. Where it does so, it will normally notify the person under investigation that it has appointed the investigators to investigate under section 168 as well (see ENF 2.12).

Unless it is not practicable to do so (such as in cases of urgency), FSA staff (or the investigator appointed by the FSA) will generally send a preliminary findings letter to a firm, approved person, individual involved in a firm, appointed representative or a small e-money issuer1 under investigation (as the case may be) before considering whether to recommend that enforcement action be initiated.

The letter will set out the facts which the FSA staff (or the investigator appointed by the FSA) consider relevant to the matters under investigation, and will invite the person concerned to confirm that those facts are complete and accurate. FSA staff (or the investigator appointed by the FSA) will allow a reasonable period (normally 28 days) for a response to this letter.

FSA staff will take into account any response they receive within the period stated in the preliminary findings letter. They are not obliged to take into account any response received outside that period.

Where the FSA (or the investigator appointed by the FSA) has sent a preliminary findings letter and the FSA then decides not to take any further action, the FSA will communicate this decision promptly to the person concerned.

The FSA's power to investigate suspected market misconduct is contained in section 168(2) of the Act (Appointment of persons to carry out investigations in particular cases) (see ENF 2.3.14 G (2)). The FSA may appoint an investigator if circumstances suggest that insider dealing or market abuse may have taken place, or that misleading statements have been made or misleading practices may have been engaged in. Where it appears to the FSA that there are circumstances suggesting that a firm may have engaged in market abuse, the FSA will consider appointing an investigator under section 168(2) to investigate that particular matter, rather than under section 167 (Appointment of persons to carry out general investigations). ENF 2.6.2 G deals in more detail with the circumstances in which the FSA may appoint investigators, in relation to both authorised persons and unauthorised persons.

When considering whether to use its powers to conduct formal investigations into market misconduct, the FSA will take into account a number of factors. These will include:

1. (1)

   the seriousness of its concerns, including the effect of the misconduct on consumers or market confidence;

2. (2)

   the nature of the possible contravention, including the type of market involved, and the duration and frequency of the possible contravention;

3. (3)

   the context of the possible contravention; for example, where the behaviour in question happened or is happening in the context of a takeover bid and, in the FSA's opinion, any investigation may materially affect the timetable or outcome of that bid, the FSA will consult the Takeover Panel and will give due weight to its views; and

4. (4)

   whether another regulatory authority is in a position to investigate and deal with the matters of concern.

   1. (a)

      As far as a recognised investment exchange or recognised clearing house is concerned, the FSA will consider the extent to which the relevant exchange or clearing house has adequate and appropriate powers to investigate and deal with the matters of concern itself. The FSA will consult with the relevant exchange or clearing house and give due weight to its views. Where appropriate, the FSA may use its own powers under section 128 of the Act (Suspension of investigations) to prevent a recognised investment exchange or recognised clearing house from starting an investigation or to limit, stop or suspend an existing inquiry.

   2. (b)

      As far as the Takeover Panel is concerned, as regards market abuse, the cases in which the FSA expects to take action against a person with Takeover Code responsibilities are limited, as ENF 14.9 (Action involving other UK regulatory authorities) makes clear. The FSA does not therefore expect to use relevant investigative powers unless one of the circumstances in ENF 14.9.6 G applies. Further, unless one of the following exceptions applies, the FSA will not start any investigation into behaviour that has happened or is happening in the context of a takeover bid while that bid is current. The exceptions are where: (i) the case falls within ENF 14.9.7 G, or (ii) the person whose behaviour is to be investigated is not a person who has responsibilities under the Takeover Code.

The FSA may appoint investigators into unauthorised persons under section 168 of the Act (Appointment of persons to carry out investigations in particular cases) (see ENF 2.3.14 G (2) and ENF 2.3.14 G (3)) where it appears to it that circumstances suggest that:

1. (1)

   a person has contravened the general prohibition in section 19 of the Act against carrying on a regulated activity without authorisation or exemption; or

2. (2)

   a person has breached a prohibition order; or

3. (3)

   a person has committed a specified offence, including:

   1. (a)

      Making a false claim to be authorised or exempt;

   2. (b)

      Contravening the restriction on financial promotion; and

   3. (c)

      Making a false or misleading statement to induce an investment agreement.

The FSA's primary aim in using its investigation powers will be to protect the interests of consumers. The FSA's priority will be to confirm whether or not a regulated activity has been carried on in the United Kingdom by someone without authorisation or exemption, and, if so, the extent of that activity and whether other related contraventions have occurred. It will seek to assess the risk to consumers' assets and interests arising from the activity as soon as possible.

The FSA may be alerted to possible contraventions or breaches by complaints from the public or firms, by referrals from other prosecuting authorities or through its own enquiries. It will assess on a case-by-case basis whether to carry out a formal investigation, after considering all the available information. Factors it will take into account are:

1. (1)

   the elements of the suspected contravention or breach;

2. (2)

   whether the FSA considers that the persons concerned are willing to cooperate with it; and

3. (3)

   whether obligations of confidentiality inhibit individuals from providing information unless compelled to do so by the FSA's use of its formal powers.

At an early stage in the investigation the FSA may need to consider whether to take urgent enforcement action to protect consumers. Its investigators will then use their powers to collect documentary and oral evidence for use in support of that action. Nevertheless, even when it has commenced enforcement proceedings, it may need to continue with its fact-finding investigations. For instance, the FSA may need further information to consider whether it should use any of its other statutory powers, to apply for further civil remedies or to start criminal prosecutions.

The FSA will not always be the only investigating, enforcement or prosecuting authority with an interest in investigating unauthorised business. From time to time the Serious Fraud Office, the Department of Trade and Industry, the police and the prosecuting authorities (both in the United Kingdom and overseas) may have an interest in such cases.

The FSA has agreed guidelines that will establish a framework for liaison and cooperation in cases where one or more of these authorities has an interest in prosecuting any aspect of a matter that the FSA is considering for investigation, investigating or considering prosecuting. These Guidelines are set out in ENF 2 Annex 1 G G.

The FSA's power to conduct investigations to assist overseas authorities is contained in section 169 of the Act (see ENF 2.3.16 G).

Section 169(1) states that at the request of an overseas regulator, the FSA may use its power under section 165 of the Act (FSA's power to require information) power to require information and documents, or appoint a person to investigate any matter. These are referred to as the FSA's investigative powers.

If the overseas regulator is a competent authority and makes a request under any Community obligation, section 169(3) states that the FSA must, in deciding whether or not to exercise its investigative power, consider whether it is necessary to use it to comply with that obligation.

Section 169(6) states that, if the FSA considers that the use of its investigative power is necessary to comply with a Community obligation, the provisions of section 169(4) and (5) (set out in ENF 2.8.5 G and ENF 2.8.6 G) do not apply.

Under section 169(4), in deciding whether or not to use its investigative power, the FSA may take into account in particular the following factors:

1. (1)

   whether, in the country or territory of the overseas regulator concerned, corresponding assistance would be given to a UK regulatory authority;

2. (2)

   whether the case concerns the breach of a law, or other requirement, which has no close parallel in the United Kingdom or involves the assertion of a jurisdiction not recognised by the United Kingdom;

3. (3)

   the seriousness of the case and its importance to persons in the United Kingdom; and

4. (4)

   whether it is otherwise appropriate in the public interest to give the assistance sought.

Section 169(5) states that the FSA may decide not to use its investigative power unless the overseas regulator agrees to make such contribution towards the cost as the FSA considers appropriate.

When it considers whether to use its investigative power, and whether section 169(4) applies, the FSA will first consider whether it is able to assist without using its formal powers, for example by getting the information voluntarily. Where that is not possible, the FSA will take account of all the factors in ENF 2.8.5 G, but may give particular weight to the seriousness of the case and its importance to persons in the United Kingdom, and to the public interest.

The FSA may appoint investigators into a collective investment scheme if it appears to it that it is in the interests of the participants or potential participants to do so or that the matter is of public concern (section 284(1) (Power to investigate)). In most cases it expects that those involved (such as managers of schemes) will provide information without the FSA having to use its formal powers. In other cases, circumstances may be such that the FSA relies on its general investigative powers. However, in some cases the use of the section 284 power may be more appropriate.

The types of concern that may prompt the FSA to use its powers under section 284 cannot be listed exhaustively. They will include any matters that could affect the interests of participants or potential participants or matters that could be of public concern, including questions about the nature and propriety of assets held by the scheme or the accuracy and propriety of valuation of units in the scheme. When considering whether to use the powers, factors that the FSA will take into account include:

1. (1)

   the seriousness, in the FSA's opinion, of the matter of concern;

2. (2)

   the degree to which the interests of consumers may be affected;

3. (3)

   whether the FSA considers that the persons concerned are willing to cooperate in giving information;

4. (4)

   whether confidentiality obligations may inhibit individuals from giving information without the FSA having to use its formal powers.

This section sets out additional provisions that apply to investigations generally.

Section 413 of the Act relates to protected items.

1. (1)

   Under section 413(1), a person may not be required under the Act to produce, disclose or allow inspection of protected items.

2. (2)

   Protected items are:

   1. (a)

      Communications between a professional legal adviser and his client or any person representing his client which falls within section 413(3);

   2. (b)

      Communications between a professional legal adviser, his client or any person representing his client and any other person that falls within section 413(3) (as a result of paragraph (b) of that subsection);

   3. (c)

      items which -

      1. (i)

         Are enclosed with, or referred to in, such communications;

      2. (ii)

         Fall within section 413(3); and

      3. (iii)

         Are in the possession of a person entitled to have them.

3. (3)

   A communication or item falls within section 413(3) if it is made:

   1. (a)

      in connection with the giving of legal advice to the client; or

   2. (b)

      in connection with, or in contemplation of, legal proceedings and for the purposes of those proceedings.

4. (4)

   However under section 413(4) a communication or item is not a protected item if it is held with the intention of furthering a criminal purpose.

5. (5)

   Also, under section 175(4) of the Act (Information and documents: supplemental provisions) a lawyer may be required to give the name and address of his client.

Under section 175(5) and section 284(8) (Power to investigate) of the Act, except in certain circumstances, no person may be required under Part XI (Information Gathering and Investigations) or section 284 of the Act to give information or produce a document in respect of which he owes an obligation of confidence by carrying on banking business. Those circumstances include, under section 175(5), circumstances where:

1. (1)

   the person to whom the obligation is owed is the person under investigation, or a related company; or

2. (2)

   the person to whom the duty is owed consents to its disclosure; or

3. (3)

   the requirement to disclose has been specifically authorised by the FSA.

Section 174 of the Act (Admissibility of statements made to investigators) relates to the admissibility of statements made by a person in compliance with information requirements imposed under sections 171 (Powers of persons appointed under section 167), 172 (Additional power of persons appointed as a result of section 168(1) or (4)), 173 (Powers of persons appointed as a result of section 168(2)), 175 or 284 of the Act, to an investigator appointed under section 167 (Appointment of persons to carry out general investigations), 168 (Appointment of persons to carry out investigations in particular cases) or 284 of the Act.

1. (1)

   Under section 174(1) a statement made to an investigator by a person complying with an information requirement can, in general, be used as evidence in any proceedings, so long as it also complies with any requirements governing the admissibility of evidence in the circumstances in question.

2. (2)

   However, under section 174(2), such a statement cannot generally be used as evidence in criminal proceedings in which the person who made the statement is charged with an offence, or in proceedings in relation to action against a person under section 123 of the Act (Penalties for market abuse). Nevertheless this does not apply to the offences listed in section 174(3), such as making false statements or providing false or misleading evidence to the FSA's investigators. Where section 174(2) applies:

   1. (a)

      no evidence relating to the statement may be adduced; and

   2. (b)

      no questions relating to it may be asked;

   by the prosecution or the FSA, unless evidence relating to that statement is adduced, or a question relating to it is asked, by that person or on his behalf in the proceedings.

Statements made by a person to an investigator other than in compliance with an information requirement (such as statements made voluntarily) are not covered by section 174 and can be used as evidence in any proceedings subject to any requirements governing the admissibility of evidence in the circumstances in question.

The FSA sees its investigation powers as essentially fact-finding powers. Consequently, it will ensure that its investigators use them primarily to obtain the information it needs in order to decide what further action, if any, may be necessary in a particular case.

In practice, investigators appointed under sections 167 (Appointment of persons to carry out general investigations), 168 (Appointment of persons to carry out investigations in particular cases) or 284 (Power to investigate) of the Act may not always deem it necessary to use their statutory powers. However, where they do so, they will at all times make this clear to those persons to whom their enquiries are addressed, and will inform those persons of the statutory requirements (see ENF 2.4) and the possible penalties for failure to comply. (See also ENF 2.14.3 G on compulsory interviews and ENF 2.15 on enforcement of requirements).

The FSA's powers to control investigators are contained in section 170 of the Act (Investigations: general). Section 170(5) permits the FSA to appoint a member of its staff as an investigator, and the FSA will usually do this.

The FSA has power under section 170(7) to direct an investigator so that it can control:

1. (1)

   the scope of the investigation;

2. (2)

   the period during which the investigation is to be conducted;

3. (3)

   the conduct of the investigation; and

4. (4)

   the reporting of the investigation.

Under section 170(8) a direction may, in particular:

1. (1)

   Confine the investigation to particular matters;

2. (2)

   Extend the investigation to additional matters;

3. (3)

   Require the investigator to stop the investigation or to take only certain steps; and

4. (4)

   Require the investigator to make an interim report or reports.

Section 170(5) to (9) also applies to investigations into collective investment schemes under section 284 of the Act.

Where the FSA has appointed an investigator in response to a request from an overseas regulator, it may under section 169(7) (Investigations etc. in support of overseasregulator) direct the investigator to allow a representative of that regulator to attend, and take part in, any interview conducted for the purposes of the investigation. However, the FSA may only use this power if it is satisfied that any information obtained by an overseas regulator as a result of the interview will be subject to safeguards equivalent to those in Part XXIII of the Act (Public Record, Disclosure of Information and Cooperation) (section 169(8)).

The factors that the FSA may take into account when deciding whether to make a section 169(7) interview direction include the following:

1. (1)

   the complexity of the case;

2. (2)

   the nature and sensitivity of the information sought;

3. (3)

   the FSA's own interest in the case;

4. (4)

   costs, where no Community obligation is involved, and the availability of resources; and

5. (5)

   the availability of similar assistance to UK authorities in similar circumstances.

Under section 169(9), the FSA is required to prepare a statement of policy with the approval of the Treasury on the conduct of interviews attended by representatives of overseas regulators. The statement is set out in ENF 2 Annex 2 G G.

Section 170(2) of the Act (Investigations: general) requires the FSA to give to the person who is the subject of the investigation written notice that it has appointed an investigator, except in relation to the cases set out in section 170(3) (see ENF 2.12.3 G). Under section 170(4), the notice must:

1. (1)

   specify the provisions under which, and as a result of which, it appointed the investigator; and

2. (2)

   state the reason for the investigator's appointment.

If there is a change in the scope or conduct of the investigation and, in the FSA's opinion, the person under investigation is likely to be significantly prejudiced if not made aware of this, that person must be given written notice of the change (see section 170(9)). It is impossible to give a definitive list of the circumstances in which a person is likely to be significantly prejudiced by not being made aware of the change in the scope or conduct of an investigation. However, this may include situations where there may be unnecessary costs from dealing with an aspect of an investigation which the FSA no longer intends to pursue or where a person may inadvertently incriminate himself by not knowing of the change in scope.

However, under section 170(3), sections 170(2) and (9) (see ENF 2.12.1 G and ENF 2.12.2 G) do not apply if:

1. (1)

   the investigator is appointed as a result of section 168(1) or (4) (Appointment of persons to carry out investigations in particular cases) (see ENF 2.3.14 G (1) and ENF 2.3.14 G (3)) and the investigating authority believes the notice required would be likely to result in the investigation being frustrated; or

2. (2)

   the investigator is appointed as a result of section 168(2) (see ENF 2.3.14 G (2)).

Where the Act does not require the FSA to give written notice of the appointment of the investigators, for example where the investigation is into suspected breaches of the general prohibition or market misconduct, the FSA will nevertheless consider notifying the person under investigation when it becomes clear who that person is.

In investigations into possible insider dealing, market abuse, misleading statements and practices offences, or breaches of the general prohibition, the restriction on financial promotion, or the prohibition on promoting collective investment schemes, the investigator may not know the identity of the perpetrator or may be looking into market circumstances at the outset of the investigation rather than investigating a particular person. For example, market abuse investigations may often be prompted by concerns surrounding, for instance, movements in the market price of a particular investment. In those circumstances the FSA will give an indication of the nature and subject matter of the FSA's investigation to those who are required to provide information to assist with the investigation.

However, when it becomes clear who the person under investigation is, the FSA will normally notify him of that fact when it proceeds to exercise its statutory powers to require information from them. But it will not notify the persons under investigation if this would prejudice the FSA's ability to conduct the investigation effectively.

Except where the FSA has issued a warning notice (See DEC 2 Statutory notice procedure: warning notice and decision notice procedure) and the FSA has subsequently discontinued the proceedings, the Act does not require the FSA to provide notification of the termination of an investigation or subsequent enforcement action. However, where the FSA has given a person written notice that it has appointed an investigator and subsequently decides to discontinue the investigation without any present intention to take further action, it will confirm this to the person concerned as soon as it considers it is appropriate to do so, having regard to the circumstances of the case.

The FSA will not normally make public the fact that it is or is not investigating a particular matter, or any of the findings or conclusions of an investigation.

Paragraphs ENF 2.13.3 G to ENF 2.13.6 G deal with exceptional circumstances in which the FSA may make a public announcement that it is or is not investigating a particular matter.

Where the matter in question has occurred in the context of a takeover bid, and the following circumstances apply, the FSA may make a public announcement that it is not investigating, and does not propose to investigate, the matter. Those circumstances are where the FSA:

1. (1)

   has not appointed, and does not propose to appoint, investigators; and

2. (2)

   considers (following discussion with the Takeover Panel) that such an announcement is appropriate in the interests of preventing or eliminating public uncertainty, speculation or rumour.

Where it is investigating any matter, the FSA will, in exceptional circumstances, make a public announcement that it is doing so if it considers such an announcement is desirable to:

1. (1)

   maintain public confidence in the financial system; or

2. (2)

   protect consumers; or

3. (3)

   prevent widespread malpractice; or

4. (4)

   help the investigation itself, for example by bringing forward witnesses.

In deciding whether to make an announcement, the FSA will consider the potential prejudice that it believes may be caused to any persons who are, or who are likely to be, a subject of the investigation.

The exceptional circumstances referred to in ENF 2.13.4 G may arise where the matters under investigation have become the subject of public concern, speculation or rumour. In this case it may be desirable for the FSA to make public the fact of its investigation in order to allay concern, or contain the speculation or rumour. Where the matter in question relates to a takeover bid, the FSA will discuss any announcement beforehand with the Takeover Panel. Any announcement will be subject to the restriction on disclosure of confidential information in section 348 of the Act (Restrictions on disclosure of confidential information by FSA etc).

There will also be cases where publicity is unavoidable. For example, investigations into suspected criminal offences may often lead the FSA into making enquiries amongst the general public which might attract publicity.

The FSA will not normally publish details of the information found or conclusions reached during its investigations. In many cases, statutory restrictions on the disclosure of information obtained by the FSA in the course of exercising its functions are likely to prevent publication (see section 348 of the Act). In exceptional circumstances, and where it is not prevented from doing so, the FSA may publish details. Circumstances in which it may do so include those where the fact that the FSA is investigating has been made public, by the FSA or otherwise, and the FSA subsequently concludes that the concerns that prompted the investigation were unwarranted. This is particularly so if the firm under investigation wishes the FSA to clarify the matter.

Section 391 of the Act (Publication) deals with publication of regulatory action resulting in final notices and effective supervisory notices (see DEC).

1. (1)

   Under section 391(4) the FSA must publish such information about the matter to which a final notice relates as it considers appropriate.

2. (2)

   Similarly under section 391(5), where a supervisory notice takes effect the FSA must publish such information about the matter to which the notice relates as it considers appropriate.

3. (3)

   However, under section 391(6) the FSA may not publish information under section 391 if publication of it would, in its opinion, be unfair to the person with respect to whom the action was taken or prejudicial to the interest of consumers.

Where the final notice relates to behaviour in the context of a takeover bid, and the FSA believes that publicity may affect the timetable or outcome of that bid, the FSA will consult the Takeover Panel and will give due weight to the Panel's views.

ENF 9.10 (Publication) sets out the FSA's policy on publishing details of applications to court for restitution or for the use of its administrative power to require restitution. The FSA considers that it is generally appropriate to publish details of successful applications to court or of the exercise of its administrative powers to require restitution. However, in certain circumstances it may decide not to publish, for example, if this could damage market confidence or undermine market integrity in a way that could be damaging to the interests of consumers. Where the relevant behaviour has occurred in the context of a takeover bid, and the FSA believes that publicity may affect the timetable or outcome of that bid, the FSA will consult the Takeover Panel and will give due weight to the Takeover Panel's views.

The FSA will also normally publish the outcome of other civil actions, such as the obtaining of injunctions prohibiting further illegal activity, and of public hearings in criminal prosecutions. Again, where the relevant behaviour has occurred in the context of a takeover bid, and the FSA is of the opinion that publicity may materially affect the timetable or outcome of that bid, the FSA will consult the Takeover Panel and will give due weight to the Takeover Panel's views.

As mentioned in ENF 2.11.2 G, the FSA may not always use its statutory powers to require individuals to be interviewed. If appropriate, the investigator will first seek to conduct interviews on a voluntary basis.

If the interviewee is the subject of the investigation, the investigator will make a record of the interview and the FSA will give a copy of the record to the interviewee. If the interviewee is not the subject of the investigation, the FSA will give the interviewee a record of the interview if one has been made by the investigator. The interviewee may be accompanied by a legal adviser, if he wishes.

Where the FSA does require a person to answer questions in interview, using its compulsory powers, it will:

1. (1)

   allow that person (whether or not he is the subject of the investigation) to be accompanied by a legal adviser, if he wishes;

2. (2)

   give the person an appropriate warning and an explanation of the limited use that can be made of his answers in criminal proceedings against him, or in proceedings in which the FSA seeks a penalty for market abuse under Part VIII of the Act (Penalties for Market Abuse); and

3. (3)

   give the person a record of the interview (in most cases this will be an audio tape recording).

Under sections 401 (Proceedings for offences) and 402 (Power of the FSA to institute proceedings for certain other offences) of the Act, the FSA is a prosecuting authority in England and Wales and Northern Ireland for a number of criminal offences. When conducting interviews with suspects for the purpose of obtaining evidence for use in criminal proceedings, investigators are subject (with appropriate adaptations) to the statutory requirements of the Police and Criminal Evidence Act 1984 (PACE) and its Codes, and of the Criminal Procedure and Investigations Act 1996. Individuals suspected of a criminal offence may therefore be interviewed under caution. These interviews will be subject to all the safeguards of PACE Code C and are entirely voluntary on the part of the suspects. The FSA will warn the suspect at the start of the interview of his right to remain silent (and the consequences of remaining silent) and will inform the suspect that he is entitled to have a legal adviser present.

If a suspect has already been interviewed by the FSA under compulsory powers, before he is interviewed under caution, the investigators will give him the transcript or other record of the compulsory interview and an explanation of the difference between the two types of interview. They will also tell the individual about the limited use that can be made of his previous answers in criminal proceedings or in proceedings in which the FSA seeks a penalty for market abuse under Part VIII of the Act.

Also, where a suspect has been interviewed under caution, and the FSA subsequently wishes to conduct a compulsory interview with him, the FSA will again explain the difference between the two types of interview, and will notify the individual of the limited use that can be made of his answers in the compulsory interview.

Guidance on the admissibility of statements made to investigators is set out at ENF 2.10.4 G to ENF 2.10.5 G.

The FSA and its investigators may apply to a magistrate for a warrant to search for and seize documents or information. Under section 176 of the Act (Entry of premises under warrant) a justice of the peace or sheriff may issue a warrant if he is satisfied that there are reasonable grounds for believing that:

1. (1)

   a person has failed to comply with a requirement to provide information or produce documents, and that the required documents or information are on the premises specified in the warrant (see section 176(2)); or

2. (2)

   the premises specified in the warrant are those of a firm or an appointed representative; and that there are documents or information on the premises which could be the object of an information requirement; and that the requirement would not be complied with, or the documents or information would be removed, tampered with or destroyed if such a requirement were made (see section 176(3)); or

3. (3)

   a serious offence has been or is being committed; and that documents or information relevant to that offence are on the specified premises; and that an information requirement could be imposed on those documents or that information; and that the requirement would not be complied with, or the documents or information would be removed, tampered with or destroyed (see section 176(4)).

The offences relevant to sub-paragraph (3) above are those mentioned in section 168 of the Act (Appointment of persons to carry out investigations in particular cases) (see ENF 2.3.14 G), for which the maximum sentence on indictment is two years or more.

The FSA will consider using these powers to apply for a search warrant when it has concerns about whether information requirements will be complied with and it believes that the grounds listed in ENF 2.15.1 G are made out.

A search warrant issued under section 176 will authorise a constable to:

1. (1)

   Enter the premises specified in the warrant;

2. (2)

   Search the premises and take possession of documents or information relevant to the warrant, or take any other steps which may appear to be necessary to preserve them or prevent interference with them;

3. (3)

   take copies of, or extracts from, any such documents or information;

4. (4)

   require any person on the premises to explain any such document or information or to state where it may be found.

As a matter of policy, the FSA will usually seek to ensure that the FSA's investigator is named on the warrant and entitled to accompany the constable on the search.

Section 177 of the Act (Offences) creates three criminal offences in relation to non-cooperation with the FSA, information gatherers authorised by the FSA under section 165(3) of the Act, and investigators.

Under section 177(3), (4) and (6) a person commits an offence if he:

1. (1)

   knows or suspects that an investigation is being or is likely to be conducted, and:

   1. (a)

      falsifies, conceals, destroys or otherwise disposes of a document which he knows or suspects is, or would be, relevant to the investigation; or

   2. (b)

      causes or permits the falsification, concealment, destruction or disposal of such a document;

   unless he shows that he had no intention of concealing facts disclosed by the documents from the investigator (see section 177(3)); or

2. (2)

   in purported compliance with a requirement placed on him under Part XI of the Act (Information Gathering and Investigations), gives information which he knows to be false or misleading in a material particular, or recklessly gives information which is false or misleading in a material particular (see section 177(4)); or

3. (3)

   intentionally obstructs the use of any rights conferred by a warrant (see section 177(6)).

Section 177(1) states that if a person other than the investigator fails to comply with a requirement imposed on him under Part XI of the Act, the person imposing the requirement may certify that fact in writing to the court. If the court is satisfied that that person has no reasonable excuse for failing to comply, it may deal with him as if he were in contempt. If the person is a body corporate, the court may deal with any director or officer as if he were in contempt (section 177(2)).