A summary of the Financial Services Authority's enforcement procedures in the United Kingdom

Abstract

Purpose

The purpose of this paper is to summarize the Financial Services Authority's (FSA's) enforcement procedures pursuant to powers granted by the Financial Services and Markets Act 2000 (“FMSA”) to impose a variety of sanctions on firms and individuals for breaches of rules under FSMA and other legislation.

Design/methodology/approach

Describes FSA's approach to enforcement; how the FSA decides to commence an enforcement investigation; the FSA's powers to gather information and investigate; the FSA's policies and procedures on interviews; the FSA's policies on publicity; how a firm under investigation should involve both internal and external counsel; how the FSA decides to take enforcement action; the role of the Regulatory Decisions Committee (RDC); the FSA's power to prosecute criminal offenses; civil court proceedings, including injunctions, restitution orders, and insolvency proceedings; FSA disciplinary actions; the Statutory Notice Procedure; how the FSA issues decision notices; the role of the Tribunal; and settlement and mediation procedures.

Findings

The FSA is increasingly ready to commence enforcement proceedings and where necessary, impose significantly higher financial penalties than before in respect of rules breaches. While familiarity with the detailed procedural rules is important, it is not a substitute for the exercise of common sense and judgement. Each case is different. A final determination of the matter through settlement negotiations is strongly encouraged by the FSA.

Originality/value

An essential summary and reference guide to the FSA's enforcement powers and procedures especially relevant to senior management and to those in compliance who are dealing with actual or potential FSA enforcement action.

Citation

Falkner, R. and Gerty, J. (2006), "A summary of the Financial Services Authority's enforcement procedures in the United Kingdom", Journal of Investment Compliance, Vol. 7 No. 1, pp. 69-82. https://doi.org/10.1108/15285810610701627