Related provisions for DEPP 6.2.9
1 - 20 of 28 items.
The FCA4 will consider the full circumstances of each case when determining whether or not to take action for a financial penalty or public censure. Set out below is a list of factors that may be relevant for this purpose. The list is not exhaustive: not all of these factors may be applicable in a particular case, and there may be other factors, not listed, that are relevant.4(1) The nature, seriousness and impact of the suspected breach, including:(a) whether the breach was deliberate
When deciding whether to take action for market abuse or requiring or encouraging, the FCA4 may consider the following additional factors:4(1) The degree of sophistication of the users of the market in question, the size and liquidity of the market, and the susceptibility of the market to market abuse.(2) The impact, having regard to the nature of the behaviour, that any financial penalty or public censure may have on the financial markets or on the interests of consumers:(a)
The FCA's4 rules on systems and controls against money laundering are set out in SYSC 3.2 and SYSC 6.3. The FCA4, when considering whether to take action for a financial penalty or censure in respect of a breach of those rules, will have regard to whether a firm has followed relevant provisions in the Guidance for the UK financial sector issued by the Joint Money Laundering Steering Group.44
The primary responsibility for ensuring compliance with a firm's regulatory obligations rests with the firm itself. However, the FCA4 may take disciplinary action against an approved person where there is evidence of personal culpability on the part of that approved person. Personal culpability arises where the behaviour was deliberate or where the approved person's standard of behaviour was below that which would be reasonable in all the circumstances at the time of the conduct
In some cases it may not be appropriate to take disciplinary measures against a firm for the actions of an approved person (an example might be where the firm can show that it took all reasonable steps to prevent the breach). In other cases, it may be appropriate for the FCA4 to take action against both the firm and the approved person. For example, a firm may have breached the rule requiring it to take reasonable care to establish and maintain such systems and controls as are
In addition to the general factors outlined in DEPP 6.2.1 G, there are some additional considerations that may be relevant when deciding whether to take action against an approved person pursuant to section 66 of the Act. This list of those considerations is non-exhaustive. Not all considerations below may be relevant in every case, and there may be other considerations, not listed, that are relevant.(1) The approved person's position and responsibilities. The FCA4 may take into
The FCA4 will not discipline approved persons on the basis of vicarious liability (that is, holding them responsible for the acts of others), provided appropriate delegation and supervision has taken place (see APER 4.6.13 G and APER 4.6.14 G). In particular, disciplinary action will not be taken against an approved person performing a significant influence function simply because a regulatory failure has occurred in an area of business for which he is responsible. The FCA4 will
3In addition to the general factors outlined in DEPP 6.2.1 G, there are some additional considerations that the FCA4 will have regard to when deciding whether to take action against a person that performs a controlled function without approval contrary to section 63A of the Act.4(1) The conduct of the person. The FCA4 will take into consideration whether, while performing controlled functions without approval, the person committed misconduct in respect of which, if he had been
The primary responsibility for ensuring compliance with Part VI of the Act, the Part 6 rules, the prospectus rules or a provision otherwise made in accordance with the Prospectus Directive or a requirement imposed under such provision rests with the persons identified in section 91(1) and section 91(1A) (Penalties for breach of Part 6 rules) of the Act respectively. Normally therefore, any disciplinary action taken by the FCA4 for contraventions of these obligations will in the
However, in the case of a contravention by a person referred to in section 91(1)(a) or section 91(1)(b) or section 91(1A) of the Act ("P"), where the FCA4 considers that another person who was at the material time a director of P was knowingly concerned in the contravention, theFCA4 may take disciplinary action against that person. In circumstances where the FCA4 does not consider it appropriate to seek a disciplinary sanction against P (notwithstanding a breach of relevant requirements
The Principles are set out in PRIN 2.1.1 R. The Principles are a general statement of the fundamental obligations of firms under the regulatory system. The Principles derive their authority from the FCA's4 rule-making powers set out in section 137A4(General rule-making power) of the Act. A breach of a Principle will make a firm liable to disciplinary action. Where the FCA4 considers this is appropriate, it will discipline a firm on the basis of the Principles alone.444
The Listing Principles are set out in LR 7. The Listing Principles are a general statement of the fundamental obligations of listed companies. The Listing Principles derive their authority from the FCA's4 rule making powers set out in section 73A(1) (Part 6 Rules) of the Act. A breach of a Listing Principle will make a listed company liable to disciplinary action by the FCA4.44
When deciding how to proceed in such cases, the FCA4 will examine the circumstances of the case, and consider, in the light of the relevant investigation, disciplinary and enforcement powers, whether it is appropriate for the FCA4 or another authority to take action to address the breach. The FCA4 will have regard to all the circumstances of the case including whether the other authority has adequate powers to address the breach in question.444
In some cases, it may be appropriate for both the FCA4and another authority to be involved, and for both to take action in a particular case arising from the same facts. For example, a breach of RIE rules may be so serious as to justify the FCA4 varying or cancelling the firm's Part IV permission, or withdrawing approval from approved persons, as well as action taken by the RIE. In such cases, the FCA4 will work with the relevant authority to ensure that cases are dealt with efficiently
The FCA4 will not take action against a person over behaviour which (a) conforms with the Takeover Code or rules of an RIE and (b) falls within the terms of any provision of the Code of Market Conduct which states that behaviour so conforming does not amount to market abuse. The FCA4 will seek the Takeover Panel's or relevant RIE's views on whether behaviour complies with the Takeover Code or RIE rules and will attach considerable weight to its views.44
If any of the circumstances in DEPP 6.2.26 G apply, and the FCA4 considers that the use of its disciplinary powers under section 123 or section 129, or of its injunctive powers under section 381 or of its powers relating to restitution under section 383 or 384 is appropriate, it will not take action during an offer to which the Takeover Code applies except in the circumstances set out in DEPP 6.2.27 G.4
(1) 1A person subject to enforcement action may
agree to a financial penalty or other outcome rather than contest formal action
by the FCA.44(2) The fact that he does so will not
usually obviate the need for a statutory notice recording the FCA's4 decision to take that action. Where, however, the person subject to enforcement action agrees
not to contest the content of a proposed statutory
notice, the decision to give that statutory notice will be taken
by senior FCA4 staff.44(3)
Settlement discussions may take
place at any time during the enforcement process if both parties agree. This
might be before the giving of a warning notice,
before a decision notice, or
even after referral of the matter to the Tribunal.
But the FCA4 would
not normally agree to detailed settlement discussions until it has a sufficient
understanding of the nature and gravity of the suspected misconduct or issue
to make a reasonable assessment of the appropriate outcome. Settlement
The terms of any proposed settlement:(1) will be put in writing and be agreed
by FCA4 staff
and the person concerned;4(2) may refer to a draft of the proposed statutory notices setting out the facts
of the matter and the FCA's4 conclusions; 4(3) may, depending upon the stage in
the enforcement process at which agreement is reached, include an agreement
by the person concerned to: (a) waive and not exercise any rights
under sections 387 (Warning notices) and 394 (Access to Authority
In addition to the factors considered in Step 2 for cases against firms (DEPP 6.5A) and cases against individuals (DEPP 6.5B),1 the following considerations are relevant.1(1) In general, the FCA's2 approach to disciplinary action arising from the late submission of a report will depend upon the length of time after the due date that the report in question is submitted.2(2) If the person concerned is an individual, it is open to him to make representations to the FCA2 as to why
Some of the distinguishing features of notices given under enactments other than the Act are as follows: (1) [deleted]66(2) [deleted]66(3) Friendly Societies Act 1992, section 58A1: The warning notice and decision notice must set out the terms of the direction which the FCA6 proposes or has decided to give and any specification of when the friendly society is to comply with it. A decision notice given under section 58A(3) must give an indication of the society's right, given by
Persons subject to enforcement action may be prepared to agree the amount of any financial penalty, or the length of any period of suspension or restriction,2 and other conditions which the FCA3 seeks to impose by way of such action. Such conditions might include, for example, the amount or mechanism for the payment of compensation to consumers. The FCA3 recognises the benefits of such agreements, in that they offer the potential for securing earlier redress or protection for
(1) Any settlement agreement between the FCA3 and the person concerned will therefore need to include a statement as to the appropriate penalty discount in accordance with this procedure.3(2) In certain circumstances the person concerned may consider that it would have been possible to reach a settlement at an earlier stage in the action, and argue that it should be entitled to a greater percentage reduction in penalty than is suggested by the table at DEPP 6.7.3G (3). It may
(1) 1The FCA's3 approach to determining penalties described in DEPP 6.5 to DEPP 6.5C is intended to ensure that financial penalties are proportionate to the breach. The FCA3 recognises that penalties may affect persons differently, and that the FCA3 should consider whether a reduction in the proposed penalty is appropriate if the penalty would cause the subject of enforcement action serious financial hardship.333(2) Where an individual or firm claims that payment of the penalty
(1) In assessing whether a penalty would cause an individual serious financial hardship, the FCA3 will consider the individual’s ability to pay the penalty over a reasonable period (normally no greater than three years). The FCA's3 starting point is that an individual will suffer serious financial hardship only if during that period his net annual income will fall below £14,000 and his capital will fall below £16,000 as a result of payment of the penalty. Unless the FCA3 believes
(1) The FCA3 will consider reducing the amount of a penalty if a firm will suffer serious financial hardship as a result of having to pay the entire penalty. In deciding whether it is appropriate to reduce the penalty, the FCA3 will take into consideration the firm’s financial circumstances, including whether the penalty would render the firm insolvent or threaten the firm’s solvency. The FCA3 will also take into account its statutory objectives3, for example in situations where
An ROIE1 must include in the first report submitted under section 295(1) of the Act after the recognition order in relation to that ROIE1 is made: 11(1) particulars of any events of the kind described in section 295(2) of the Act which occurred; (2) particulars of any change specified in REC 6.7.4 R (1) or disciplinary action specified in REC 6.7.4 R (2) which occurred; and(3) any annual report and accounts which covered a period ending; after the application for recognition
A sponsor must notify the FCA in writing as soon as possible if:(1) 8(a) 8the sponsor ceases to satisfy the criteria for approval as a sponsor set out in LR 8.6.5 R or becomes aware of any matter which, in its reasonable opinion, would be relevant to the FCA in considering whether the sponsor continues to comply with LR 8.6.6 R; or(b) 8the sponsor becomes aware of any fact or circumstance relating to the sponsor or any of its employees engaged in the provision of sponsor services
When considering whether to nominate, approve or appoint a skilled person to make a report or collect or update information, the appropriate regulator will have regard to the circumstances of the case, including whether the proposed skilled person appears to have:22(1) the skills necessary to make a report on the matter concerned or collect or update the relevant information;2(2) the ability to complete the report or collect or update the information within the time expected by
Consequently, the relevant regulator24 considers that it will have good reason not to grant a firm's application for cancellation of permission where:24(1) the FCA and/or the PRA24 proposes to exercise any of the powers described in SUP 6.4.24 G; or24(2) the FCA and/or the PRA24 has already begun disciplinary and/or24 restitution proceedings against the firm by exercising either or both of these powers against the firm.24
The power to impose a suspension
or a restriction is a disciplinary measure which the FCA2 may use in addition to, or instead of, imposing a financial penalty
or issuing a public censure.
The principal purpose of imposing a suspension or a restriction is to promote
high standards of regulatory and/or market conduct by deterring persons who have committed breaches from
committing further breaches,
helping to deter other persons from
committing similar breaches,
and demonstrating
The powers to impose a suspension or a restriction in relation
to authorised persons and approved persons are disciplinary measures;2 where the FCA2 considers it necessary to take action, for example, to protect consumers from an authorised
person, the FCA2 will seek to cancel or vary the authorised
person'spermissions.
If the FCA2 has
concerns with a person's fitness
to be approved, and considers it necessary to take action, the FCA2 will
seek to prohibit the approved person
Examples of the kind of particular considerations to which the FCA may have regard when assessing whether a firm will satisfy, and continue to satisfy, this threshold condition include, but are not limited to, whether:1515(1) the firm has been open and co-operative in all its dealings with the FCA15and any other regulatory body (see Principle 11 (Relations with regulators)) and is ready, willing and organised to comply with the requirements and standards under the regulatory system
If the appropriate regulator1 gives a firm a waiver, then the relevant rule no longer applies to the firm. But:1(1) if a waiver directs that a rule is to apply to a firm with modifications, then contravention of the modified rule could lead to appropriate regulator1 enforcement action and (if applicable) a right of action under section 138D1 of the Act (Actions for damages); and11(2) if a waiver is given subject to a condition, it will not apply to activities conducted in breach
The FCA1 will consider it appropriate to impose a suspension or restriction
where it believes that such action will be a more effective and persuasive
deterrent than the imposition of a financial penalty alone. This is likely
to be the case where the FCA1 considers that direct and visible action in relation to a particular breach is necessary. Examples of circumstances
where the FCA1 may
consider it appropriate to impose a suspension or restriction include:111(1) where the FCA1
(1) When deciding whether to take enforcement
action under Part 7 of the RCB Regulations,
and what form that enforcement action should take, the FCA will consider all relevant factors,
including:(a) the relevant factors on decisions to take action set out in DEPP 6.2.1 G;(b) whether any contractual or other arrangements agreed between the
parties can be used effectively to address any perceived failure under the RCB Regulations; and(c) the interests of investors in the relevant
GEN 6.1.4A R,2GEN 6.1.5 R and GEN 6.1.6 R do not prevent a firm or member from entering into, arranging, claiming on or making any payment under a contract of insurance which indemnifies any person against all or part of the costs of defending appropriate regulator5 enforcement action or any costs they may be ordered to pay to the appropriate regulator5.55