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EG 6.1 1Publicity during FCA investigations

EG 6.1.1

1The FCA will not normally make public the fact that it is or is not investigating a particular matter, or any of the findings or conclusions of an investigation except as described in other sections of this chapter. The following paragraphs deal with the exceptional circumstances in which the FCA may make a public announcement that it is or is not investigating a particular matter.

EG 6.1.2

1Where the matter in question has occurred in the context of a takeover bid, and the following circumstances apply, the FCA may make a public announcement that it is not investigating, and does not propose to investigate, the matter. Those circumstances are where the FCA:

  1. (1)

    has not appointed, and does not propose to appoint, investigators; and

  2. (2)

    considers (following discussion with the Takeover Panel) that such an announcement is appropriate in the interests of preventing or eliminating public uncertainty, speculation or rumour.

EG 6.1.3

1Where it is investigating any matter, the FCA will, in exceptional circumstances, make a public announcement that it is doing so if it considers such an announcement is desirable to:

  1. (1)

    maintain public confidence in the financial system or the market; or

  2. (2)

    protect consumers or investors; or

  3. (3)

    prevent widespread malpractice; or

  4. (4)

    help the investigation itself, for example by bringing forward witnesses; or

  5. (5)

    maintain the smooth operation of the market.

In deciding whether to make an announcement, the FCA will consider the potential prejudice that it believes may be caused to any persons who are, or who are likely to be, a subject of the investigation.

EG 6.1.4

1The exceptional circumstances referred to above may arise where the matters under investigation have become the subject of public concern, speculation or rumour. In this case it may be desirable for the FCA to make public the fact of its investigation in order to allay concern, or contain the speculation or rumour. Where the matter in question relates to a takeover bid, the FCA will discuss any announcement beforehand with the Takeover Panel. Any announcement will be subject to the restriction on disclosure of confidential information in section 348 of the Act.

EG 6.1.5

1[deleted]

EG 6.1.6

1The FCA will not normally publish details of the information found or conclusions reached during its investigations. In many cases, statutory restrictions on the disclosure of information obtained by the FCA in the course of exercising its functions are likely to prevent publication (see section 348 of the Act). In exceptional circumstances, and where it is not prevented from doing so, the FCA may publish details. Circumstances in which it may do so include those where the fact that the FCA is investigating has been made public, by the FCA or otherwise, and the FCA subsequently concludes that the concerns that prompted the investigation were unwarranted. This is particularly so if the firm under investigation wishes the FCA to clarify the matter.

EG 6.2 3Publicity during, or upon the conclusion of regulatory action

EG 6.2.1

3For supervisory notices (as defined in section 395(13)) which have taken effect, decision notices and final notices, section 391 of the Act requires the FCA to publish, in such manner as it considers appropriate, such information about the matter to which the notice relates as it considers appropriate. Section 391 prevents the FCA from publishing warning notices, but the FCA may publish such information about the matter to which a warning notice falling within section 391(1ZB) of the Act relates as it considers appropriate after consulting the persons to whom the notice is given or copied. However, section 391(6) provides that the FCA cannot publish information if publication of it would, in its opinion, be unfair to the person with respect to whom the action was taken (or was proposed to be taken), prejudicial to the interests of consumers, or detrimental to the stability of the UK financial system.

EG 6.2.2

3The FCA’s approach to publishing information about warning notices is set out in paragraphs 6.2.3 to 6.2.11 below. This should be contrasted with the FCA’s approach to the publication of decision notices and final notices as set out in paragraphs 6.2.12 to 6.2.15 below. In particular, the considerations that the FCA will take into account when deciding what information to publish about a warning notice, including whether publication would be unfair, recognise that the FCA has a discretion as opposed to a duty to publish and that the recipient of a warning notice has not yet had a formal opportunity to make representations about the action the FCA proposes to take.

Warning notice statements

EG 6.2.3

3The FCA may publish information about warning notices which fall within section 391(1ZB) of the Act. These are essentially disciplinary warning notices, for example, where the FCA is proposing to censure, fine, or impose a suspension, restriction, condition or limitation on1 a firm or individual. The power to publish information does not apply, for example, to warning notices which only propose to prohibit an individual, withdraw the approval of an individual or cancel the permission of a firm.

EG 6.2.4

3The decisions on whether to exercise the power to publish information about a warning notice, and if so what information to publish, will (subject to EG 6.2.4AG)4 be taken by the RDC after it has consulted with the persons to whom the warning notice has been given or copied. The procedure the FCA will follow when making these decisions is set out in DEPP 3.

EG 6.2.4A

4Where the settlement decision makers decide to issue a warning notice, they shall also take the decision on whether to exercise the power to publish information about a warning notice and if so what information to publish. The settlement decision makers will consult with the persons to whom the warning notice has been given or copied. The FCA expects that the settlement decision makers are unlikely to decide it is appropriate to publish information about a warning notice where a focused resolution agreement has been entered into and where it is likely that a final notice will shortly follow, save in exceptional circumstances. The procedure the FCA will follow when making these decisions is set out in DEPP 5.

EG 6.2.5

3The principal purpose of this power is to promote the early transparency of enforcement proceedings. This has several benefits, including:

  • consumers, firms and market users will be able to understand the types of behaviour that the FCA considers unacceptable at an earlier stage, which in turn should encourage more compliant behaviour;
  • by showing at an earlier stage that the FCA is taking action, confidence in the FCA and the regulatory system should be enhanced;
  • there will be more openness in respect of the enforcement process, which will generally be in the public interest; and
  • it aligns the stage at which publicity is given in regulatory cases with the stage at which publicity is given in civil and criminal cases.

EG 6.2.6

3The FCA will take the following initial steps in considering whether it is appropriate to exercise this power:

  1. (1)

    It will consider whether it is appropriate to publish details of the warning notice in order to enable consumers, firms and market users to understand the nature of the FCA’s concerns. The FCA will consider the circumstances of each case but expects normally to consider it appropriate to publish these details.

  2. (2)

    Where the FCA considers it is appropriate to publish details of the warning notice, it will consider whether it is also appropriate to identify the subject of the warning notice. The FCA will consider the circumstances of each case but expects normally that it will be appropriate to identify a firm, but that it will not be appropriate to identify an individual This is because the FCA considers that the potential harm caused to an individual from publication at this stage of the enforcement proceedings will normally exceed the benefits of early transparency, but that this will not normally be the case in respect of firms. However, there may be circumstances where the FCA considers identification of an individual is appropriate, for example, where the FCA considers:

  • it is not possible to describe the nature of its concerns without making it possible to identify the individual;
  • it is necessary to avoid other persons being mistakenly believed to be the individual in breach;
  • it would help to protect consumers or investors;
  • it is necessary to maintain public confidence in the financial system or the market; or
  • it is desirable to quash rumours in the market.

  1. (3)

    Where the FCA considers it is appropriate either to publish details of the warning notice without identifying its subject, or to publish details of the warning notice and identify its subject, it will consult the persons to whom the notice is given or copied. It will then consider whether any of the grounds set out in section 391(6) of the Act prohibiting publication apply. These grounds are that publication of that information, or some of that information, would, in the opinion of the FCA, be unfair to the person with respect to whom the action was proposed to be taken, prejudicial to the interests of consumers or detrimental to the stability of the UK financial system. In considering whether publication would be unfair, the FCA will have regard to, amongst other matters, whether the person with respect to whom the action was proposed to be taken is a firm or an individual, the size of a firm, and the extent to which the person has been made aware of the case against him during the course of the investigation.

EG 6.2.7

3A person to whom the warning notice is given or copied who seeks to demonstrate potential unfairness from publication must provide clear and convincing evidence of how that unfairness may arise and how he could suffer a disproportionate level of damage. For example, this may be the case if publication could materially affect the person’s health, result in bankruptcy or insolvency, a loss of livelihood or a significant loss of income, or prejudice criminal proceedings to which he is a party. The FCA is more likely to consider that the negative impact of publication on a person’s reputation amounts to unfairness if the person also provides evidence of the harm that they could suffer as a consequence of the damage to their reputation. Arguments made solely on the basis that it is unfair for the FCA to have the power to publish information at this point of the enforcement process will have no effect on the FCA’s decision. Similarly, arguments about the merits of the warning notice itself will not be material to publication decisions; arguments of this nature should instead be made separately and later in the process by way of representations in response to the warning notice.

EG 6.2.8

3If, after consulting the persons to whom the notice is given or copied, the FCA still considers it is appropriate to publish information about a warning notice, it will publish this information in a statement (a warning notice statement). This will ordinarily include a brief summary of the facts which gave rise to the warning notice to enable consumers, firms and market users to understand the nature of the FCA’s concerns. Where the FCA considers it appropriate to identify the subject of the warning notice, it will also include details of:

  1. (1)

    the name of the firm or individual;

  2. (2)

    additional information to enable the identification of the firm or individual; and

  3. (3)

    in the case of an approved person or conduct rules staff1, his or her employer at the relevant time.

EG 6.2.9

3As the FCA may only publish information about disciplinary warning notices and not others, it will in many cases not be able to publish details of all of the sanctions it is seeking to impose (for example, the fact that it is proposing to prohibit an individual as well as impose a fine). For this reason, the FCA will not normally publish the nature and level of the proposed disciplinary sanctions.

EG 6.2.10

3Any warning notice statement the FCA publishes will make clear that:

  1. (a)

    the warning notice is not the final decision of the FCA;

  2. (b)

    the recipient has the right to make representations to the RDC which, in the light of those representations, will decide on the appropriate action and whether to issue a decision notice; and

  3. (c)

    if a decision notice is issued, the subject of the notice will have the right to refer the matter to the Tribunal which will reach an independent decision on the appropriate action for the FCA to take.

EG 6.2.11

3Publication will generally include placing the warning notice statement on the FCA website. The FCA will also consider what information about the matter should be included on the Financial Services Register.

Decision notices and final notices

EG 6.2.12

3The FCA will consider the circumstances of each case, but will ordinarily publicise enforcement action where this has led to the issue of a final notice. The FCA may also publicise enforcement action where this has led to the issue of a decision notice. The FCA will decide on a case-by-case basis whether to publish information about the matter to which a decision notice relates, but expects normally to publish a decision notice if the subject of enforcement action decides to refer the matter to the Tribunal. The FCA may also publish a decision notice before a person has decided whether to refer the matter to the Tribunal if the FCA considers there is a compelling reason to do so. For example, the FCA may consider that early publication of the detail of its reasons for taking action is necessary for market confidence reasons or to allow consumers to avoid any potential harm arising from a firm’s actions. If a person decides not to refer a matter to the Tribunal, the FCA will generally only publish a final notice.

EG 6.2.13

3If the FCA intends to publish a decision notice, it will give advance notice of its intention to the person to whom the decision notice is given and to any third party to whom a copy of the notice is given. The FCA will consider any representations made, but will normally not decide against publication solely because it is claimed that publication could have a negative impact on a person’s reputation. The FCA will also not decide against publication solely because a person asks for confidentiality when they refer a matter to the Tribunal.

EG 6.2.14

3Publication will generally include placing the decision notice or final notice on the FCA website and this will often be accompanied by a press release. The FCA will also consider what information about the matter should be included on the Financial Services Register. Additional guidance on the FCA's approach to the publication of information on the Financial Services Register in certain specific types of cases is set out at the end of this chapter.

EG 6.2.15

3However, as required by the Act (see paragraph 6.2.1 above), the FCA will not publish information if publication of it would, in its opinion, be unfair to the person in respect of whom the action is taken or prejudicial to the interests of consumers, or detrimental to the stability of the UK financial system. It may make that decision where, for example, publication could damage market confidence or undermine market integrity in a way that could be damaging to the interests of consumers.

EG 6.2.16

3Publishing notices is important to ensure the transparency of FCA decision-making; it informs the public and helps to maximise the deterrent effect of enforcement action. The FCA will upon request review warning notice statements, decision notices, final notices and related press releases that are published on the FCA's website. The FCA will determine at that time whether continued publication is appropriate, or whether notices and publicity should be removed or amended.

EG 6.2.17

3In carrying out its review the FCA will consider all relevant factors. In particular, the FCA will take into account:

  • the seriousness of the person’s misconduct;
  • the nature of the action taken by the FCA and the level of any sanction imposed on the person;
  • whether the FCA has continuing concerns in respect of the person and any risk they might pose to the FCA's objectives;
  • whether the person is a firm or an individual;
  • whether the publication sets out the FCA's expectations regarding behaviour in a particular area, and if so, whether that message still has educational value;
  • public interest in the case (both at the time and subsequently);
  • whether continued publication is necessary for deterrence, consumer protection or market confidence reasons;
  • how much time has passed since publication; and
  • any representations made by the person on the continuing impact on them of the publication.

EG 6.2.18

3The FCA expects usually to conclude that warning notice statements, notices and related press releases that have been published for less than six years should not be removed from the website, and that notices and related press releases relating to prohibition orders which are still applicable should not be removed from the website regardless of the length of time they have been published.

EG 6.2.19

3In cases where the FCA publishes a warning notice statement and the FCA subsequently decides not to take any further action, or where it publishes a decision notice and the subject of enforcement action successfully refers the matter to the Tribunal, the FCA will make it clear on its website that the warning notice or the 2decision notice no longer applies. The FCA will normally do this by publishing a notice of discontinuance with the consent of the person to whom the notice of discontinuance has been copied.

2 2
EG 6.2.19A

2In other cases where a case is resolved following the publication of a warning notice statement, the FCA will consider on a case-by-case basis whether to update its website to explain what the outcome was of the case described in the warning notice statement. Where the warning notice statement was issued on an anonymised basis, the FCA will at the same time consider the extent to which it is appropriate to identify the subject of the statement.

Supervisory notices varying a firm's Part 4A permission, imposing a requirement or varying an approval on the FCA’s own initiative (see EG 8 and DEPP 8)

EG 6.2.20

3[deleted]

EG 6.2.21

3It is important that the FCA maintains an accurate public record. One of the ways the FCA does this is by publishing1 the reasons for variations of Part 4A permission, the imposition of requirements and variations of the approval of SMF managers1. The FCA will always aim to balance1 the interests of consumers and the possibility of unfairness to the person subject to the FCA's action. The FCA will publish relevant details of1 fundamental and non-fundamental variations of Part 4A permission and requirements which it imposes on firms, and variations of approval of SMF managers1. But it will use its discretion not to do so if it considers this to be unfair to the person on whom the variation is imposed, prejudicial to the interests of consumers, or detrimental to the stability of the UK financial system. Publication will generally include placing the notice on the FCA website and this may be accompanied by a press release. As with warning notice statements, decision notices and final notices, supervisory notices and related press releases that are published on the FCA's website will be reviewed upon request. The FCA will determine at that time whether continued publication is appropriate, or whether notices and related press releases should be removed or amended. The FCA expects usually to conclude that supervisory notices and related press releases that have been published for less than six years should not be removed from the website.

EG 6.2.22

3The FCA will amend the Financial Services Register to reflect a firm’s actual Part 4A permission or the terms of an SMF manager’s actual approval under section 59 of the Act1 following any variation.

EG 6.3 1Decisions against ECA providers

EG 6.3.1

1This is discussed in paragraphs 19.9.9 and 19.9.10 of this guide.

EG 6.4 1Publicity in RDC cases

EG 6.4.1

1The Chairman of the RDC, or his relevant Deputy, will approve the contents of press releases to be published by the FCA in cases in which the decision to take action was made by the RDC, unless the RDC’s decision is superseded by a decision of the Tribunal.

EG 6.5 1Publicity during, or upon the conclusion of civil action

EG 6.5.1

1Civil court proceedings nearly always take place in public from the time they begin. Therefore, civil proceedings for an injunction (see chapter 10) or a restitution order (see chapter 11), for example, will often be public as soon as they start.

EG 6.5.2

1The FCA considers it generally appropriate to publish details of its successful applications to the court for civil remedies including injunctions or restitution orders. For example, where the court has ordered an injunction to prohibit further illegal regulated activity, the FCA thinks it is appropriate to publicise this to tell consumers of the position and help them avoid dealing with the person who is the subject of the injunction. Similarly, a restitution order may be publicised to protect and inform consumers and maintain market confidence. However, there may be circumstances when the FCA decides not to publicise, or not to do this immediately. These circumstances might, for example, be where publication could damage confidence in the financial system or undermine market integrity in a way that would be prejudicial to the interests of consumers.

EG 6.6 1Publicity during, or upon the conclusion of criminal action (see chapter 12)

EG 6.6.1

1The FCA will normally publicise the outcome of public hearings in criminal prosecutions.

EG 6.6.2

1When conducting a criminal investigation the FCA will generally consider making a public announcement when suspects are arrested, when search warrants are executed and when charges are laid. A public announcement may also be made at other stages of the investigation when this is considered appropriate.

EG 6.6.3

1The FCA will always be very careful to ensure that any FCA publicity does not prejudice the fairness of any subsequent trial.

EG 6.7 1Behaviour in the context of takeover bid

EG 6.7.1

1Where the behaviour to which a decision notice, final notice, civil action, or criminal action relates has occurred in the context of a takeover bid, the FCA will consult the Takeover Panel over the timing of publication if the FCA believes that publication may affect the timetable or outcome of that bid, and will give due weight to the Takeover Panel's views.

EG 6.8 1The Financial Services register: publication of prohibitions of individuals (see chapter 9)

EG 6.8.1

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. (1)

    The FCA will maintain an entry on the Financial Services Register while a prohibition order is in effect. If the FCA grants an application to vary the order, it will make a note of the variation on the Financial Services Register.

  2. (2)

    Where the FCA grants an application to revoke a prohibition order, it will make a note on the Financial Services Register that the order has been revoked giving reasons for the revocation. The availability to firms and consumers of a full record of FCA action taken in relation to an individual's fitness and propriety will help it in furthering its statutory objectives. In particular, it will help with protecting consumers and the maintaining of confidence in the financial system.

  3. (3)

    The FCA will maintain an annotated record of revoked prohibition orders for six years from the date of the revocation after which time it will remove the record from the Financial Services Register.

EG 6.9 1The Financial Services register: publication of disciplinary measures against auditors and actuaries (see chapter 15)

EG 6.9.1

1To help it fulfil its operational objective of protecting consumers, the FCA will keep on the Financial Services Register a record of firms or individual auditors or actuaries who have been the subject of disqualification orders or other disciplinary measures by the FCA.

EG 6.10 1The Financial Services Register: publication of disapplication orders against members of the professions (see chapter 16)

EG 6.10.1

1In general, the FCA considers that publishing relevant information about orders to disapply an exemption in respect of a member of a designated professional body will be in the interests of clients and consumers. The FCA will consider what additional information about the circumstances of the order to include on the record maintained on the Financial Services Register taking into account any prejudice to the person concerned and the interests of consumer protection.

EG 6.10.2

1The FCA's normal approach to maintaining information about a disapplication order on the Financial Services Register is as follows.

  1. (1)

    While a disapplication order is in effect, the FCA will maintain a record of the order on the Financial Services Register. If the FCA grants an application to vary the order, a note of the variation will be made against the relevant entry on the Financial Services Register.

  2. (2)

    The FCA's policy in relation to section 347(4) of the Act is that where an application to revoke an order is granted, it will make a note on the Financial Services Register saying that the order has been revoked giving reasons for its revocation. Having a full record of action the FCA has taken against persons granted an exemption under section 327 of the Act available will help the FCA to fulfil its operational objectives of securing an appropriate degree of protection for consumers and protecting and enhancing the integrity of the UK financial system.

  3. (3)

    This is why the FCA will maintain the annotated record of the disapplication order for a period of six years from the date of the revocation of the order, after which period the record will be removed from the record on the Financial Services Register.