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EG 15.3 1Disqualification under section 345

EG 15.3.1

1When it decides whether to exercise its power to disqualify an auditor or actuary under section 345(1), and what the scope of any disqualification will be, the FCA will take into account all the circumstances of the case. These may include, but are not limited to, the following factors:

  1. (1)

    the nature and seriousness of any breach of rules and the effect of that breach: the rules are set out in SUP 3 (Auditors) and SUP 4 (Actuaries), and in the case of firms which are ICVCs, in COLL 4 (Investor relations) and COLL 7 (Suspension of dealings and termination of authorised funds). The FCA will regard as particularly serious any breach of rules which has resulted in, or is likely to result in, loss to consumers or damage to confidence in the financial system or an increased risk that a firm may be used for the purposes of financial crime;

  2. (2)

    the nature and seriousness of any breach of the duties imposed under the Act: the FCA will regard as particularly serious any failure to disclose to it information which has resulted in, or is likely to result in, loss to consumers or damage to confidence in the financial system or an increased risk that a firm may be used for the purposes of financial crime;

  3. (3)

    action taken by the auditor or actuary to remedy the breach: this may include whether the auditor or actuary brought the breach to the attention of the FCA promptly, the degree of cooperation with the FCA in relation to any subsequent investigation, and whether remedial steps have been taken to rectify the breach and whether reasonable steps have been taken to prevent a similar breach from occurring;

  4. (4)

    action taken by professional bodies: the FCA will consider whether any disciplinary action has been or will be taken against the auditor or actuary by a relevant professional body and whether that action adequately addresses the particular breach of duty;

  5. (5)

    The previous compliance record of the auditor or actuary concerned: whether the FCA (or a previous regulator) or professional body has imposed any previous disciplinary sanctions on the firm or individual concerned.