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EG 7.1 3The FCA’s use of sanctions

EG 7.1.1

3Financial penalties, suspensions, restrictions, conditions, limitations, disciplinary prohibitions,2 and public censures are important regulatory tools. However, they are not the only tools available to the FCA, and there will be many instances of non-compliance which the FCA considers it appropriate to address without the use of formal disciplinary sanctions. Still1, the effective and proportionate use of the FCA's powers to enforce the requirements of the Act, the rules, COCON1 and the Statements of Principle for Approved Persons (APER) will play an important role in the FCA’s pursuit of its statutory objectives. Imposing disciplinary sanctions1 shows that the FCA is upholding regulatory standards and helps to maintain market confidence and deter financial crime. An increased public awareness of regulatory standards also contributes to the protection of consumers.

1
EG 7.1.2

3The FCA has the following powers to impose sanctions2.

  1. (1)

    It may publish a statement:

    1. (a)

      against an approved person or conduct rules staff1 under section 66 of the Act;

    2. (b)

      against an issuer under section 87M of the Act;

    3. (c)

      against a sponsor under section 88A of the Act;

    4. (ca)

      against a primary information provider under section 89Q of the Act;

    5. (d)

      where there has been a contravention of the Part 6 rules, under section 91 of the Act;

    6. (e)

      2against a person under section 123 of the Act;

    7. (ea)

      if a natural or legal person has contravened any provision of the short selling regulation, or any requirement imposed on that person under section 131E or 131F, under section 131G of the Act;

    8. (eb)

      against a qualifying parent undertaking under section 192K of the Act;

    9. (ec)

      against an auditor under section 249 of the Act;

    10. (ed)

      against a recognised investment exchange under section 312E of the Act;

    11. (ee)

      against an auditor and/or an actuary under section 345 of the Act; and

    12. (f)

      against a firm, or an unauthorised person to whom section 404C applies, under section 205 of the Act.

  2. (2)

    It may impose a financial penalty:

    1. (a)

      on a person that performs a controlled function without approval, under section 63A of the Act;

    2. (aa)

      on an approved person or conduct rules staff1, under section 66 of the Act;

    3. (ab)

      on a sponsor under section 88A of the Act;

    4. (ac)

      on a primary information provider under section 89Q of the Act;

    5. (b)

      where there has been a contravention of the Part 6 rules, under section 91 of the Act;

    6. (c)

      on a2 person, under section 123 of the Act;

    7. (ca)

      on a natural or legal person who has contravened any provision of the short selling regulation, or any requirement imposed on that person under section 131E or 131F, or any natural or legal person who was knowingly concerned in the contravention, under section 131G of the Act;

    8. (cb)

      on a qualifying parent undertaking under section 192K of the Act;

    9. (d)

      on a firm, or an unauthorised person to whom section 404C applies, under section 206 of the Act;

    10. (da)

      on an auditor under section 249 of the Act;

    11. (db)

      on a recognised investment exchange under section 312F of the Act; and

    12. (dc)

      on an auditor and/or actuary under section 345 of the Act.

  3. (3)

    It may impose a suspension, limitation or other restriction:

    1. (a)

      [deleted]1

    2. (b)

      on a sponsor under section 88A of the Act;

    3. (c)

      on a primary information provider under section 89Q of the Act; and

    4. (d)

      on an authorised person2 under sections 123B or2 206A of the Act.

  4. (4)

    It may impose a suspension, condition or limitation on an approved person under section 66 of the Act.1

  5. (5)

    2It may impose a disciplinary prohibition on an individual under section 123A of the Act.

EG 7.1.3

3Section 415B of the Act requires the FCA to consult with the PRA before it takes certain enforcement action in relation to a PRA-authorised person or someone who has a qualifying relationship (as defined in section 415B(4) of the Act) with a PRA-authorised person. Further detail on when the FCA is required to consult the PRA, and when it has agreed to notify the PRA of certain matters, is set out in the Memorandum of Understanding between the PRA and the FCA.