ENF 9.8 Determining the amount of restitution

When deciding how much should be paid by a firm or individual following an application by the FSA to court for an order for restitution, the court may consider those factors set out in ENF 9.5.2 G (2).

Section 382(4) (Restitution orders) and section 383(6) (Restitution orders in cases of market abuse) of the Act state that the court may require the person, whether authorised or not, to supply it with accounts or other information to help the court:

1. (1)

   to establish whether and, if so how much, profit may have been made as a result of the contravention; or

2. (2)

   to establish whether any persons have suffered any losses or adverse effects as a result of the contravention of a relevant requirement or market abuse and, if so, the extent of those losses or adverse effects; or

3. (3)

   to determine how any amounts are to be paid or distributed to qualifying persons.

An application by the FSA for an order for restitution under section 382 or 383 will not prevent a person from bringing a private action for restitution in relation to the same matter. However, the court is likely to consider whether any payments have already been made to private claimants when it decides whether to order restitution in any case.

When the FSA decides the amount of restitution which a firm or unauthorised person must pay following the exercise of its administrative power to require restitution, it must approach the matter in the same way as the court would in accordance with section 382(5) of the Act.

The FSA may obtain information relating to the amount of profits made and/or losses or other adverse effects resulting from the conduct of firms or unauthorised persons as a result of the exercise of its powers to appoint investigators under sections 167 (Appointment of persons to carry out general investigations) or 168 (Appointment of persons to carry out investigations in particular cases) of the Act. The FSA's policy and procedure in respect of its powers to appoint investigators are contained in ENF 2 (Information gathering and investigation powers).

As well as obtaining information through the appointment of investigators, the FSA may consider using its power under section 166 of the Act (Reports by skilled persons) to require a firm to provide a report prepared by a skilled person (see ENF 2.3.8 G to ENF 2.3.11 G). That report may be requested to help the FSA to:

1. (1)

   determine the amount of profits which have been made by the firm; or

2. (2)

   establish whether the conduct of the firm has caused any losses or other adverse effects to qualifying persons and/or the extent of such losses; or

3. (3)

   determine how any amounts to be paid by the firm are to be distributed between qualifying persons.

The person appointed to make a report under ENF 9.8.6 G must be nominated or approved by the FSA and appear to the FSA to have the necessary skills to report on the matter.