Under section 56(2) of the Act (Prohibition orders), the FSA may make a prohibition order if it appears that an individual is not fit and proper to carry out functions in relation to regulated activities carried on by firms. The FSA may make an order prohibiting the individual from carrying out a specified function in relation to regulated activities, any function within a specified description, or any function in relation to regulated activities.
Under section 56(4), an individual who carries out or agrees to carry out a function in breach of a prohibition order is guilty of an offence and liable, on summary conviction, to a fine not exceeding level 5 on the standard scale (section 37(1) of the Criminal Justice Act 1982 states that a level 5 fine shall not exceed £5000). In proceedings for an offence under section 56(4), it is a defence for the accused to show that he took all reasonable precautions and exercised all due diligence to avoid committing an offence.
Under section 57(1) of the Act (Prohibition orders: procedure and right to refer to Tribunal), if the FSA proposes to make a prohibition order it must give the individual concerned a warning notice setting out the terms of the prohibition. The FSA's procedures for issuing warning notices in this area are the same as those set out in DEC 2.2 (Warning notice procedure).