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EG 2.9 1FCA guidance and supporting materials

EG 2.9.1

1The FCA uses guidance and other materials to supplement the Principles where it considers this would help firms to decide what action they need to take to meet the necessary standard.

EG 2.9.2

1Guidance is not binding on those to whom the FCA's rules apply. Nor are the variety of materials (such as case studies showing good or bad practice, FCA speeches, and generic letters written by the FCA to Chief Executives in particular sectors) published to support the rules and guidance in the Handbook. Rather, such materials are intended to illustrate ways (but not the only ways) in which a person can comply with the relevant rules.

EG 2.9.3

1 DEPP 6.2.1G(4) explains that the FCA will not take action against someone where we consider that they have acted in accordance with what we have said. However, guidance does not set out the minimum standard of conduct needed to comply with a rule, nor is there any presumption that departing from guidance indicates a breach of a rule. If a firm has complied with the Principles and other rules, then it does not matter whether it has also complied with other material the FCA has issued.

EG 2.9.4

1 Guidance and supporting materials are, however, potentially relevant to an enforcement case and a decision maker may take them into account in considering the matter. Examples of the ways in which the FCA may seek to use guidance and supporting materials in an enforcement context include:

  1. (1)

    To help assess whether it could reasonably have been understood or predicted at the time that the conduct in question fell below the standards required by the Principles.

  2. (2)

    To explain the regulatory context.

  3. (3)

    To inform a view of the overall seriousness of the breaches e.g. the decision maker could decide that the breach warranted a higher penalty in circumstances where the FCA had written to chief executives in the sector in question to reiterate the importance of ensuring a particular aspect of its business complied with relevant regulatory standards.

  4. (4)

    To inform the consideration of a firm's defence that the FCA was judging the firm on the basis of retrospective standards.

  5. (5)

    To be considered as part of expert or supervisory statements in relation to the relevant standards at the time.

EG 2.9.5

1The extent to which guidance and supporting materials are relevant will depend on all the circumstances of the case, including the type and accessibility of the statement and the nature of the firm's defence. It is for the decision maker (see paragraphs 2.15.1 to 2.15.3) - whether the RDC, Tribunal or an executive decision maker - to determine this on a case- by-case basis.

EG 2.9.6

1The FCA may take action in areas in which it has not issued guidance or supporting materials.