The Financial Services Authority's Enforcement Procedures in the United Kingdom

The Financial Services and Markets Act 2000 (“FSMA”) gives the FSA significant powers to impose a variety of sanctions on firms and individuals for breaches of rules under FSMA and other legislation. The FSA can publicly censure or impose a financial penalty on any investment business or individual that has contravened a FSMA requirement. Any financial penalty imposed by the FSA is ordinarily accompanied by a press release. The FSA has the further power to withdraw approval for an individual to perform significant investment business functions or to prohibit an individual from working in an investment business at all.

Generally, the FSA’s enforcement process only affects “authorised persons” (i.e. firms regulated by the FSA) and “approved persons” (i.e. individuals regulated by the FSA). The FSA can, however, also take action against other persons, for example in relation to market abuse and breaches of the Listing Rules.

This publication sets out some general guidance as to what firms and individuals may expect and the procedures to be followed in the event that the FSA initiates enforcement actions against them, regardless of whether the case fits into an FSA priority area. Specifically, the White Paper outlines the following topics:

• The FSA’s Approach to Enforcement
• FSA Decision to Commence an Enforcement Investigation
• FSA Decision to Take Enforcement Action
• Criminal Court Proceedings
• Civil Court Proceedings
• FSA Disciplinary Action
• Settlement and Mediation

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