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FSA fines could treble in size

The FSA has today published plans to increase fines by up to 300 per cent through the creation of a more “consistent and transparent framework” for calculating financial penalties.

The FSA says the plan reflects its determination to change behaviour and address concerns that firms are repeatedly failing to improve standards.

The regulator says it will also ensure that fines “better reflect the scale of the wrongdoing” and that any profits made from the breaches are clawed back.

Under the new proposals, fines will be linked more closely to income and be based on up to 20 per cent of the company’s income from the product or business area linked to the breach over the relevant period.

Fines will be based on up to 40 per cent of an individual’s salary and benefits, including bonuses, from their job relating to the breach in non-market abuse cases.

In market abuse cases individuals will face a minimum fine of £100,000.

The total fine imposed will also take into account other factors such as the desired deterrent effect and any settlement discount.

FSA director of enforcement Margaret Cole says: “These proposals are an important step in pushing forward our ethos of credible deterrence. By hitting companies and individuals in the pocket where it hurts, the fines will be a stark warning to others on what they can expect to pay for flouting our rules.

“Moving to this new framework will enable our enforcement policy to continue making a real difference to consumers and to changing behaviour in the financial services sector.”

The consultation will close on October 21, 2009 and any new policy is likely to apply to breaches committed after February 2010.


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There are 8 comments at the moment, we would love to hear your opinion too.

    Its obvious that the recession has hit the pockets of the FSA too. “Transparecy”, they don’t know the meaning of the word. Its all about generating more income for them. Maybe they should invest in speed cameras…..

  2. Steven Phillips 6th July 2009 at 11:58 am

    FSA fines could treble in size
    More potential income for the FSA. Hope they regulate the banks as rigorously as the do IFAs, they would make a fortune.

  3. Fine Slapping Authority in treble
    The FSA appears to be trebling in size every time its annual report comes out, the pensions deficit is probably treble what it was. We are in terrible treble, sorry trouble.

  4. Ignorance
    Watching the Parliamentary Select Committee proceedings on the Credit crunch I was struck by the ignorance of the participants, Turner, Fred the Shred et al. patently did not understand the basic workings of the field they operated in. Kaletsky, in one of his articles on the subject, considered Paulson as ignorant in this field as well. Why did Brown appoint all these ignorami? Why did the shareholders accept their appointments?

  5. A bigger trough
    Bigger troughs for bigger snouts.

  6. Richard Russell 6th July 2009 at 4:58 pm

    I suppose Dick Turpin would have been the head of the FSA if he were alive today!

  7. Dick Turpin
    Following on Richard Russell’s Dick Turpin theme, the head of the FSA will probably have his ‘Black Bess’ on which to try to escape his responsibilities. This will be in the ‘systems and procedures’ area.

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