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DEPP 6A.3 Determining the appropriate length of the period of suspension, restriction, condition or disciplinary prohibition

DEPP 6A.3.1G

The FCA2 will consider all the relevant circumstances of a case when it determines the length of the period of suspension, restriction,4 condition or disciplinary prohibition4 (if any) that is appropriate for the breach concerned, and is also a sufficient deterrent. 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.

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DEPP 6A.3.2G

The following factors may be relevant to determining the appropriate length of the period of suspension, restriction,4 condition or disciplinary prohibition4 to be imposed on a person under the Act:

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  1. (1)

    Deterrence

    When determining the appropriate length of the period of suspension, restriction,4 condition or disciplinary prohibition4 the FCA2 will have regard to the principal purpose for which it imposes sanctions, namely to promote high standards of regulatory and/or market conduct by deterring persons who have committed breaches from committing further breaches and helping to deter other persons from committing similar breaches, as well as demonstrating generally the benefits of compliant business.

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  2. (2)

    The seriousness of the breach

    The FCA2 will have regard to the seriousness of the breach. In assessing this, it will consider the impact and nature of the breach, and whether it was committed deliberately or recklessly. Where the breach was committed by an authorised person, relevant factors may include those listed in DEPP 6.5A.2 G (6) to (9). Where the breach was committed by an individual in a non-market abuse case4, relevant factors may include those listed in DEPP 6.5B.2 G (8) to (11). Where the breach was committed by an individual in a market abuse case, relevant factors may include those listed in DEPP 6.5C.2G(11) to (14).4 There may also be other factors, not listed in these sections, that are relevant.

    2
  3. (3)

    Aggravating and mitigating factors

    The FCA2 will have regard to factors that may aggravate or mitigate a breach. Where the breach4 was committed by an authorised person, sponsor or primary information provider2, relevant factors may include those listed in DEPP 6.5A.3 G (2). Where the breach was committed by an individual in a non-market abuse case4, relevant factors may include those listed in DEPP 6.5B.3 G (2). Where the breach was committed by an individual in a market abuse case, relevant factors may include those listed in DEPP 6.5C.3G(2).4 There may also be other factors, not listed in these sections, that are relevant.

    2
  4. (4)

    The impact of suspension, restriction,4 condition or disciplinary prohibition4 on the person in breach

    The following considerations may be relevant to the assessment of the impact of suspension or restriction on an authorised person, sponsor or primary information provider2:

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    1. (a)

      the authorised person's, sponsor's or primary information provider's2 expected lost revenue and profits from not being able to carry out the suspended or restricted activity;

    2. (b)

      the cost of any measures the authorised person, sponsor or primary information provider2 must undertake to comply with the suspension or restriction;

    3. (c)

      potential economic costs, for example, the payment of salaries to employees who will not work during the period of suspension or restriction or the payment of compensation to consumers who will suffer loss as a result of the suspension or restriction;

    4. (d)

      the effect on other areas of the authorised person's, sponsor's or primary information provider's2 business; and

    5. (e)

      whether the suspension or restriction would cause the authorised person, sponsor or primary information provider2 serious financial hardship.

      The following considerations may be relevant to the assessment of the impact of suspension or condition3 on an approved person or the impact of a disciplinary prohibition on an individual4:

    6. (f)

      the person's4 expected lost earnings from not being able to carry out the suspended,4 restricted or prohibited4 activity; and

    7. (g)

      whether the suspension,4 restriction or disciplinary prohibition4 would cause the person4 serious financial hardship.

  5. (5)

    The impact of suspension,4 restriction or disciplinary prohibition4 4 on persons other than the person in breach

    The following considerations may be relevant to the assessment of the impact of suspension,4 restriction or disciplinary prohibition4 on persons other than the person in breach:

    1. (a)

      the extent to which consumers may suffer loss or inconvenience as a result of the suspension or restriction. For example, if it is difficult for consumers to switch to a competitor, a longer period of suspension or restriction is likely to have more impact; and

    2. (b)

      the impact of the suspension,4 restriction or disciplinary prohibition4 on markets.

DEPP 6A.3.3G

The FCA2 may delay the commencement of the period of suspension,4 restriction or disciplinary prohibition4. In deciding whether this is appropriate, the FCA2 will take into account all the circumstances of a case. Considerations that may be relevant in respect of an authorised person, sponsor or primary information provider2 include:

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  1. (1)

    the impact of the suspension or restriction on consumers;

  2. (2)

    any practical measures the authorised person, sponsor or primary information provider2 needs to take before the period of suspension or restriction begins, for example, changes to its systems and controls to enable it to stop or limit the activity in question;

  3. (3)

    the impact of the suspension or restriction on other costs incurred by the authorised person, sponsor or primary information provider2, for example, cancelling suppliers or suspending employees.

DEPP 6A.3.4G

1The FCA2 and the person on whom a suspension,4 restriction or disciplinary prohibition4 is to be imposed may seek to agree the length of the period of suspension,4 restriction or disciplinary prohibition4 and other terms. In recognition of the benefits of such agreements, DEPP 6.7 provides that the length of a period of suspension,4 restriction or disciplinary prohibition (other than a permanent disciplinary prohibition) 4 which might otherwise have been imposed will be reduced to reflect the stage at which the FCA2 and the person concerned reached an agreement.

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