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DEPP 6.4 Financial penalty or public censure

DEPP 6.4.1G

The FCA2 will consider all the relevant circumstances of the case when deciding whether to impose a penalty or issue a public censure. As such, the factors set out in DEPP 6.4.2 G are not exhaustive. Not all of the factors may be relevant in a particular case and there may be other factors, not listed, that are relevant.

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DEPP 6.4.2G

The criteria for determining whether it is appropriate to issue a public censure rather than impose a financial penalty include those factors that the FCA2 will consider in1 determining the amount of penalty set out in DEPP 6.5 A to DEPP 6.5 D.1 Some particular considerations that may be relevant when the FCA2 determines whether to issue a public censure rather than impose a financial penalty are:

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  1. (1)

    whether or not deterrence may be effectively achieved by issuing a public censure;

  2. (2)

    if the person has made a profit or avoided a loss as a result of the breach, this may be a factor in favour of a financial penalty, on the basis that a person should not be permitted to benefit from its breach;

  3. (3)

    if the breach is more serious in nature or degree, this may be a factor in favour of a financial penalty, on the basis that the sanction should reflect the seriousness of the breach; other things being equal, the more serious the breach, the more likely the FCA2 is to impose a financial penalty;

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  4. (4)

    if the person has brought the breach to the attention of the FCA2, this may be a factor in favour of a public censure, depending upon the nature and seriousness of the breach;

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  5. (5)

    if the person has admitted the breach and provides full and immediate co-operation to the FCA2, and takes steps to ensure that those who have suffered loss due to the breach are fully compensated for those losses, this may be a factor in favour of a public censure, rather than a financial penalty, depending upon the nature and seriousness of the breach;

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  6. (6)

    if the person has a poor disciplinary record or compliance history (for example, where the FSA or FCA2 has previously brought disciplinary action resulting in adverse findings in relation to the same or similar behaviour), this may be a factor in favour of a financial penalty, on the basis that it may be particularly important to deter future cases;

  7. (7)

    the FSA's or FCA's2 approach in similar previous cases: the FCA2 will seek to achieve a consistent approach to its decisions on whether to impose a financial penalty or issue a public censure; and

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  8. (8)

    the impact on the person concerned. It1 would only be in an exceptional case that the FCA2 would be prepared to agree to issue a public censure rather than impose a financial penalty if a financial penalty would otherwise be the appropriate sanction. Examples of such exceptional cases could include:

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    1. (a)

      where the application of the FCA's2 policy on serious financial hardship (set out in DEPP 6.5D) results in a financial penalty being reduced to zero;1

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    2. (b)

      where there is 1verifiable evidence that the person would be unable to meet other regulatory requirements, particularly financial resource requirements, if the FCA2 imposed a financial penalty at an appropriate level; or

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    3. (c)

      in Part VI cases in which the FCA2 may impose a financial penalty, where there is the likelihood of a severe adverse impact on a person's shareholders or a consequential impact on market confidence or market stability if a financial penalty was imposed. However, this does not exclude the imposition of a financial penalty even though this may have an impact on a person's shareholders.

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