on an approved person, where the FSA considers that he is guilty of misconduct; this is defined in the Act as failure to comply with a Statement of Principle issued by the FSA under section 64 (Conduct: statements and codes), or being knowingly concerned in a contravention by the relevant firm of a requirement imposed on that firm by or under section 66 of the Act (Disciplinary powers);
on any person, where the FSA is satisfied that the person is or has engaged in market abuse or, by taking or refraining from taking any action, has required or encouraged another person to engage in market abuse; the power to impose penalties for market abuse under section 123 of the Act is considered separately in ENF 14;
on an issuer of listed securities or an applicant for listing, where there has been a contravention of the listing rules (or on a director of an issuer or applicant who at the material time was knowingly concerned in the contravention) (section 91 of the Act (Penalties for breach of listing rules)). The FSA's powers in this regardrelating to the UKLA are dealt with separately in the listing rules and related guidance.
Financial penalties are one of a variety of regulatory tools the FSA may employ to help it to achieve its regulatory objectives. The principal purpose of financial penalties is to promote high standards of regulatory conduct by deterring firms and approved persons who have breached regulatory requirements from committing further contraventions, helping to deter other firms and approved persons from committing contraventions, and demonstrating generally to firms and approved persons the benefits of compliant behaviour.
1To help the FSA to achieve this purpose (as set out in ENF 13.1.2 G), GEN 6 contains rules prohibiting a firm or member from entering into, arranging, claiming on or making a payment under a contract of insurance that is intended to have, or has, the effect of indemnifying any person against a financial penalty.