I am writing regarding the article headlined, FSA looking to speed up two-year enforcement process.
Most firms which have been involved in the enforcement process and those who advise them will be surprised at the description of the enforcement procedure as involving “at least three possible stages of appeal, with considerable time given to the firm to make responses to any action taken by the FSA”.
The investigative process is almost entirely within the control of the FSA. It is not uncommon for the FSA to impose tight deadlines for the provision of documents and other information by those under investigation but for several months then to pass before matters are taken further.
Those under investigation will often have little insight into how the FSA views a particular issue until a draft investigation report is issued. There is then a limited time in which to correct any factual errors in that report (which may be voluminous and may cover issues going back several years).
If matters are not resolved by agreement following the warning notice, then the RDC will issue a decision notice which can either be accepted or the matter referred to the tribunal. It is only at tribunal stage that there is a detailed consideration of the allegations being advanced by the FSA by an independent tribunal.
Firms and individuals which are the subject of enforcement proceedings often want the process moved more quickly and wish they had a better insight into the FSA's concerns at an earlier stage.
Attempts to speed up the process are therefore to be welcomed. However, any changes must be the result of proper consultation and must properly recognise the rights of those who are subject to the enforcement process.
The FSA should also cast a critical eye over how quickly it addresses matters at present to ensure that any changes that are introduced are not one-sided.
Partner, litigation and dispute management,