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ENF 14.2 Introduction

ENF 14.2.1G

Section 124 of the Act (Statement of policy) states that the FSA must prepare and issue a statement of its policy on:

  1. (1)

    the imposition of penalties under section 123 (Power to impose penalties in cases of market abuse);

  2. (2)

    the amount of penalties under that section; and

  3. (3)

    the circumstances in which the FSA is to be expected to regard a person as:

    1. (a)

      having a reasonable belief that his behaviour did not amount to market abuse; or

    2. (b)

      having taken reasonable precautions and exercised due diligence to avoid engaging in market abuse.

This chapter is the FSA's statement of policy under section 124 of the Act. However, the FSA may at any time change or replace this statement of policy after consultation.

ENF 14.2.2G

The Act gives the FSA criminal prosecution powers in relation to insider dealing and misleading statements and practices offences. The FSA's use of these powers is considered separately in ENF 15 (Prosecution of criminal offences). The Act also gives the FSA a power to impose a financial penalty, or, in certain circumstances, to ask the court to consider imposing a financial penalty on a person who has engaged in market abuse or required or encouraged (see ENF 14.3.1 G). Where the FSA is entitled to impose a financial penalty, it may publish a statement that a person has engaged in market abuse instead. These powers and the FSA's policy on their use are set out in this chapter. ENF 14 Annex 1 G G contains a diagram summarising the steps relating to action for financial penalties or public statements in market abuse cases. The FSA's Code of Market Conduct (see MAR 1), issued by the FSA under section 119 of the Act (The code), contains those provisions which the FSA considers will give appropriate guidance to those deciding whether or not behaviour amounts to market abuse or requiring or encouraging.

ENF 14.2.3G

In addition, the Act gives the FSA power to obtain injunctions and restitution in relation to market abuse cases. These powers are described in ENF 6 (Injunctions) and ENF 9 (Restitution and redress) respectively.