Related provisions for EG 9.5.2
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3SUP 15.3.23 D to SUP 15.3.25 D are given in relation to the exercise of the powers of the Society and of the Council generally, with a view to achieving the objective of enabling the FCA11 to:3535(1) comply with its general duty under section 314 of the Act (Regulators’35 general duty);35(2) determine whether underwriting agents, or approved persons acting for them or on their behalf, are complying with the requirements imposed on them by or under the Act;(3) enforce the provisions
1The Money Laundering Regulations add to the range of options available to the FCA for dealing with anti-money laundering failures. These options are: • to prosecute both authorised firms and Annex I financial institutions;to take regulatory action against authorised firms for failures which breach the FCA'srules and requirements (for example, under Principle 3 or SYSC 3.2.6R or SYSC 6.1.1R); and• to impose civil penalties on both authorised firms and Annex I financial institutions
1The FCA recognises that a decision to make a disapplication order may have serious consequences for a member in relation not only to the conduct by the member of exempt regulated activities, but also in relation to the other business carried on by the member. When it decides whether to exercise its power to make a disapplication order, the FCA will consider all relevant circumstances including whether other action, in particular the making of a prohibition order (see chapter
2Generally, the FCA would expect to use private warnings in the context of firms, approved persons and conduct rules staff1. However, the FCA may also issue private warnings in circumstances where the persons involved may not necessarily be authorised or approved. For example, private warnings may be issued in potential cases of market abuse; cases where the FCA has considered making a prohibition order or a disapplication order; or cases involving breaches of provisions imposed
1In cases where criminal proceedings have commenced or will be commenced, the FCA may consider whether also to take civil or regulatory action (for example where this is appropriate for the protection of consumers) and how such action should be pursued. That action might include: applying to court for an injunction; applying to court for a restitution order; variation and/or cancellation of permission; and prohibition of individuals. The factors the FCA may take into account when
In cases against individuals, including market abuse cases, the FCA3 may make a prohibition order under section 56 of the Act or withdraw an individual’s approval under section 63 of the Act, as well as impose a financial penalty. Such action by the FCA3 reflects the FCA's3 assessment of the individual’s fitness to perform regulated activity or suitability for a particular role, and does not affect the FCA's3 assessment of the appropriate financial penalty in relation to a breach.
The power to impose a conditional or time-limited approval does not depend on the SMF manager being unfit without that condition or time limitation. The FCA can impose a condition or time limitation even if the candidate would still be fit and proper without it. Conversely, where an SMF manager is not fit and proper but might be if a condition or time limitation is imposed, the FCA is not obliged to impose a condition or time limitation, and may take the view that a prohibition
1In recognition of the value of early settlement, the FCA operates a scheme to award explicit discounts for early settlement of cases involving financial penalties. Details of the scheme, which applies only to settlement of cases where investigators were appointed on or after 20 October 2005, are set out in DEPP 6.7. This chapter provides some commentary on certain practical aspects of the operation of the scheme.
3This guide describes the FCA's approach to exercising the main enforcement powers given to it by the Financial Services and Markets Act 2000 (the Act) and by other legislation. It is broken down into two parts. The first part provides an overview of enforcement policy and process, with chapters about the FCA's approach to enforcement (chapter 2), the use of its main information gathering and investigation powers under the Act and the CRA (chapter 3), the conduct of investigations
1In cases where the nature of the breach of duties imposed on the auditors and actuaries under the Act (and/or in the case of actuaries imposed by trust scheme
rules or contractual scheme rules) is such that the FCA has concerns about the fitness and propriety of an individual auditor or actuary, the FCA will consider whether it is appropriate to make a prohibition order instead of, or in addition to, disqualifying the individual.
3The FCA has the power to take the following enforcement action: • discipline authorised firms under Part XIV of the 2000 Act and approved persons and other individuals1under s.66 of the 2000 Act;• impose penalties on persons that perform controlled functions without approval under s.63A of the 2000 Act;• impose civil penalties in cases of market abuse under s.123 of the 2000 Act;• prohibit an individual from being employed in connection with a regulated activity, under s.56
1In appropriate cases, the FCA may take other action against an individual in addition to making a prohibition order and/or withdrawing its approval, including the use of its powers to: impose a financial penalty or issue a public censure; apply for an injunction to prevent dissipation of assets; stop any continuing misconduct; order restitution; apply for an insolvency order or an order against debt avoidance; and/or prosecute certain criminal offences.
1The FCA may consider taking disciplinary action against a firm that has not taken reasonable care, as required by section 56(6) of the Act, to ensure that none of that firm's functions in relation to carrying on of a regulated activity is performed by a person who is prohibited from performing the function by a prohibition order. The FCA considers that a search by a firm of the Financial Services Register is an essential part of the statutory duty to take reasonable care to ensure
1Once the decision to make a prohibition order is no longer open to review, the FCA will consider what additional information about the circumstances of the prohibition order to include on the Financial Services Register. The FCA will balance any possible prejudice to the individual concerned against the interests of consumer protection. The FCA's normal approach to maintaining information about a prohibition order on the Financial Services Register is as follows: (1) The FCA
1Examples of situations where the FCA may use the own-initiative variation of approval power include where:(1) it has concerns about an SMF manager’s fitness to remain approved in relation to the performance of a designated senior management function but, in all the circumstances, it considers it appropriate to vary their approval by imposing one or more conditions or a time limitation, rather than making a prohibition order or withdrawing approval;(2) the nature or scope of the