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FCA will have power to publicise “intended” enforcement action

The Financial Conduct Authority will have the power to publicise its intention to take enforcement action against firms or individuals.

A Treasury consultation paper on the new regulatory framework, published today, says the Government will legislate to allow the FCA to publicise its warning notices against firms and individuals and the grounds on which action is being taken.

The paper says: “The Government believes greater transparency as to what enforcement action is currently underway would increase the impact of the regulator’s enforcement work by highlighting potential issues to consumers at an early stage and signalling to firms what behaviours the regulator considers to be unacceptable.”

The FCA will have discretion over its use of the power because of the potential damage it may cause to firms and individuals.

At present the FSA issues a decision notice to the firm or individual who then has 28 days to refer it to the Upper Tribunual if they want to appeal. The action must then go through the appeal process and succeed before details are published.

If that option is not taken up the FSA publishes a final notice explaining what action has been taken against whom.

The Treasury says both the FCA and the Prudential Regulation Authority will have the power, although it expects the FCA to use it more often.

The Treasury says the power will offer a “credible deterrence strategy”.

But it is aware that there needs to be safeguards in publishing enforcement details ahead of final notices, given the reputational damage that could be caused.

To take account of this, the new power will include a safeguard to ensure “procedural fairness” for affected firms and individuals.

The regulator will have the discretion rather than a duty to disclose warning notices, and will have to consider the impact of any disclosure.

If intended enforcement action is publicised and subsequently abandoned, the regulator should publish a notice of discontinuance.



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There are 3 comments at the moment, we would love to hear your opinion too.

  1. Jennifer Nicholls 17th February 2011 at 2:25 pm

    Does that mean the individuals in the banks as well or do they get away scot free. Then of course they can get away with anything by hiding under the banks umbrellas.

  2. EU Charter Article 47
    Right to an effective remedy and to a fair trial

    Everyone whose rights and freedoms guaranteed by the law of the Union are violated has the right to an effective remedy before a tribunal in compliance with the conditions laid down in this Article.

    Everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal previously established by law. Everyone shall have the possibility of being advised, defended and represented.

    Legal aid shall be made available to those who lack sufficient resources in so far as such aid is necessary to ensure effective access to justice.

    Article 48
    Presumption of innocence and right of defence

    1. Everyone who has been charged shall be presumed innocent until proved guilty according to law.

    2. Respect for the rights of the defence of anyone who has been charged shall be guaranteed.

    Article 49
    Principles of legality and proportionality of criminal offences and penalties

    1. No one shall be held guilty of any criminal offence on account of any act or omission which did not constitute a criminal offence under national law or international law at the time when it was committed. Nor shall a heavier penalty be imposed than that which was applicable at the time the criminal offence was committed. If, subsequent to the commission of a criminal offence, the law provides for a lighter penalty, that penalty shall be applicable.

    2. This Article shall not prejudice the trial and punishment of any person for any act or omission which, at the time when it was committed, was criminal according to the general principles recognised by the community of nations.

    3. The severity of penalties must not be disproportionate to the criminal offence.

  3. “Does that mean the individuals in the banks as well or do they get away scot free. Then of course they can get away with anything by hiding under the banks umbrellas.”

    Why would it be necessary to name individuals at banks?????

    If anything goes wrong at a bank the bank carries liability and get fined by the FSA as a company. And if there is any customer loss it is reimbursed by the bank.

    If anything goes wrong with an IFA the IFA runs away and his firm or network refuse to acknowledge that there has been a problem so the customer doesnt get reimbursed unless they are prepared to fight a lengthy court case.

    When IFA firms and networks start accepting that they are responsible for their IFAs and not messing about when things go wrong, then it will not be necessary to name the individuals involved!

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