-
(1)
The nature and seriousness of a contravention
or expected contravention of a relevant requirement (see ENF
6.3.2 G). The extent of loss, risk of loss, or other adverse effect on consumers, including the
extent to which client assets
may be at risk, may be relevant. The seriousness of a contravention or prospective
contravention will include considerations of:
- (a)
whether the losses suffered are substantial;
- (b)
whether the numbers of consumers who have suffered loss are significant;
- (c)
whether the assets at risk are substantial;
and
- (d)
whether the number of consumers at risk is significant.
-
(2)
In cases of market abuse, the nature and seriousness
of the misconduct or expected misconduct in question. The following may be
relevant:
- (a)
the impact or potential impact on the financial system of the
conduct in question. This would include the extent to which it has resulted
in distortion or disruption of the markets, or would be likely to do so if
it was allowed to take place or to continue;
- (b)
the extent and nature of any losses or
other costs imposed, or likely to be imposed, on other users of the financial system, as a
result of the misconduct.
-
(3)
Whether the conduct in question has stopped
or is likely to stop and whether steps have been taken or will be taken by
the person concerned
to ensure that the interests of consumers are
adequately protected. For example, an application for an injunction may be appropriate where the FSA has grounds for believing
that a contravention of a relevant requirement, market abuse or both may continue or be
repeated. It is likely to have grounds to believe this where, for example,
the Takeover Panel has
requested that a person stop
a particular course of conduct and that person has
not done so.
-
(4)
Whether there are steps a person could take to remedy
a contravention of a relevant requirement or market abuse. The steps the FSA may require a person to take will vary
according to the circumstances but may include the withdrawal of a misleading financial promotion or
publishing a correction, writing to clients or
investors to notify them of FSA action,
providing financial redress and repatriating funds from an overseas jurisdiction.
An application by the FSA to
the court under section 380(2) or 381(2) for an order requiring a person to take such steps
may not be appropriate if, for example, that person has already taken or proposes to take
appropriate remedial steps at his own initiative or under a ruling imposed
by another regulatory authority (such as the Takeover Panel or a recognised investment exchange). If another
authority has identified the relevant steps and the person concerned has failed to take them,
the FSA will
take this into account and (subject to all other relevant factors and circumstances)
may consider it is appropriate to apply for an injunction. In those cases the FSA may consult with the
relevant regulatoryauthority before applying
for an injunction.
-
(5)
Whether there is a danger of assets being
dissipated. The main purpose of an application under section 380(3) (see ENF
6.3.7 G), sections 381(3) and
(4) (see ENF
6.4.6 G) or pursuant to the court's
inherent jurisdiction (see ENF 6.5), is likely to be to safeguard funds containing client assets (ie client accounts) and/or funds and other assets
from which restitution may be made (see ENF 9 (Restitution
and redress)). The FSA may
seek an injunction to
secure assets while a suspected contravention is being investigated or where
it has information suggesting that a contravention is about to take place.
-
(6)
The costs the FSA would incur in applying for and enforcing
an injunction and
the benefits that would result (although the FSA may be able to recover those costs: see ENF
6.2.6 G). There may be other cases
which require the FSA's attention
and take a higher priority, due to the nature and seriousness of the breaches
concerned. There may, therefore, be occasions on which the FSA considers that time and resources should
not be diverted from other cases in order to make an application for an injunction.
These factors reflect the FSA's duty
under the Act to
have regard to the need to use its resources in the most efficient and economic
way.
-
(7)
The disciplinary record and general compliance
history of the person who
is the subject of the possible application. This includes whether the FSA (or a previous regulator) has
taken any previous disciplinary, remedial or protective action against the person. It may also be
relevant, for example, whether the person has
previously given any undertakings to the FSA (or
any previous regulator)
not to do a particular act or engage in particular behaviour and is in breach of those undertakings.
-
(8)
Whether the conduct in question can be
adequately addressed by other disciplinary powers, for example public censure
or financial penalties.
-
(9)
The extent to which another regulatory
authority can adequately address the matter. Certain circumstances may give
rise not only to possible enforcement action by the FSA, but also to action by other regulatory
authorities. The FSA will
examine the circumstances of each case, and consider whether it is appropriate
for the FSA to
take action to address the relevant concern. In most cases the FSA will consult with
other relevant regulatory authorities before making an application for an
order. The FSA's approach
to potential action involving other regulatory authorities is discussed in
detail, in the context of discipline of firms and approved persons, in ENF 11.8 (Action involving other regulatory authorities),
and in the context of sanctions for market
abuse, in ENF 14.9 (Action
involving other UK regulatory authorities).
-
(10)
Whether there is information to suggest
that the person who
is the subject of the possible application is involved in financial crime.
-
(11)
In any case where the FSA is of the opinion that any potential
exercise of its powers under section 381 may affect the timetable or the outcome
of a takeover bid,
the FSA will
consult the Takeover Panel before
taking any steps to exercise these powers and will give due weight to its
views.