Joint Committee on Financial Services and Markets First Report


  VI. DISCIPLINE AND ENFORCEMENT

Introduction

147. According to the Progress Report, "The main focus of comment on the draft Bill has been on the disciplinary process. There has been a perception that the FSA internal procedures may lack fairness and transparency, or be unduly costly and burdensome, and that the FSA will be able to act as 'prosecutor, judge and jury'" .[180]

148. The processes in question are modelled on those of the existing SROs; but it seems they appear more frightening when transferred to a single statutory authority. The level of feeling on this issue may also be linked to concern that the culture of the FSA may be different from that of the regulators which it is to replace, and in particular less practitioner-based. It may be that anxieties have been increased by the proposals for a wholly new regime for market abuse (see below). Mr Marc Sylvain, Managing Director, Fidelity Investment Management Limited, crystallised this fear for us by raising the possibility of the FSA engaging in "regulatory abuse".[181] It is not hard to see the connection between the concerns, noted above, about the FSA's accountability and those that are expressed in relation to its disciplinary powers: the more power is vested in the FSA, the more those who may be affected by the exercise of such power will be concerned to see that the FSA's powers are tightly defined and controlled, and that the FSA can be held properly accountable.

149. There is obviously a balance to be struck, between giving the regulator efficient and effective means to protect the consumer and the good name of UK financial services, and producing procedures which are fair and are seen to be fair.

150. In seeking this balance, regard must be had to the danger of being over-prescriptive in the primary legislation. If, in pursuit of fairness, so many safeguards are written into the Bill that the FSA cannot act quickly and effectively, this will not serve the interests of the markets. Also an overly-detailed statutory scheme runs the risk of becoming out-of-date very rapidly.

151. The FSA will be subject to judicial review.[182] If it fails to comply with the principles of natural justice and fairness, the courts will be able to intervene.[183] It will also be open to action on the basis of the European Convention on Human Rights,[184] which is to become part of UK law when the Human Rights Act 1998 is brought into force (which is expected to be next year, around the time of the passage of the eventual Financial Services and Markets Act or soon afterwards). The availability of judicial review reduces the need to set out detailed procedural safeguards in the Bill. However, if the Bill puts in place disciplinary and enforcement regimes that would clearly fall foul of the ECHR, it will set up the FSA for defeat in the courts. This could have damaging implications for the whole financial services sector and the international position of the City of London.

152. ECHR concerns were emphasised in much of the evidence we heard and also in the written submissions we received. There is a very real difficulty, as we explain below, in applying ECHR jurisprudence to regulatory and disciplinary decision-making. The Minister told us that there was "room for disagreement between lawyers" about the application of the ECHR, and that the case law was complex and inconsistent; but the Government would satisfy themselves that the Bill as introduced would be ECHR-compliant.[185] No doubt they will, before Ministers sign statements to that effect under s.19 of the 1998 Act. But the courts will take their own view; they may interpret the legislation in unexpected ways in the light of the ECHR, and might even declare some provisions incompatible with the ECHR altogether.

153. This would not invalidate the legislation. However it would seriously undermine the moral authority of the FSA, to the detriment of confidence in UK financial services and markets. This would be a highly undesirable outcome. We have therefore paid special attention to this issue.

154. These issues must be kept in proportion. The business of financial services regulation is not, or should not be, carried on predominantly by means of discipline and enforcement. The aim must be to cultivate in the industry a culture of compliance and openness, in which the regulator's business consists largely of supervision and guidance, and in which (in the words of Mr Philip Telford of the Consumers' Association) "firms that adopt good practices have nothing to fear".[186] The IFAA, the BBA and the London Investment Bankers Association (LIBA) all told us that this is their aim;[187] so did the FSA.[188] The question is, whether the Treasury's proposals will foster such a climate, or militate against it.

FSA powers of discipline and enforcement against authorised persons and their staff

155. Before considering the procedures for the exercise of the FSA's powers, it is necessary to know what those powers are proposed to be. According to Mr Davies, "For the firms we regulate they are no more than a consolidation of the powers the different regulators have now"[189]—with the important exception of the new powers over market abuse (see below).

156. Under Part XII of the draft Bill, breaches of FSA rules (including the rules written at a high level of generality which the FSA refers to as "Principles for Businesses") by authorised persons may be punished by the FSA by public censure,[190] fine,[191] restitution/disgorgement order[192] or withdrawal of authorisation[193] or of permission to carry on a particular regulated activity.[194] It is up to the FSA whether or not breach of a rule is actionable at the suit of a "private person" as defined by the FSA, or at the suit of any other person.[195] Action by a private person will generally be possible unless the rule in question expressly states otherwise; for other persons, the position is the other way round and the rule must expressly confer a cause of action.

157. Under Part V, if individual employees of authorised persons are found not to be "fit and proper", the FSA may withdraw approval to carry out regulated functions,[196] or prohibit them from employment altogether.[197] In addition, approved persons will be subject to statements of principles and codes of conduct under Clause 48; if an approved person breaches such a principle or code, or is "knowingly concerned" in breach of any requirement under the Act, the FSA may fine or publicly censure him.[198]

158. In addition, the FSA may seek an injunction or restitution order from the courts,[199] and may prosecute offences.[200]

159. According to the Progress Report, "The need for the FSA to be equipped with a range of disciplinary powers was generally accepted by consultees".[201]

160. The FSA's power to define "private person", for the purpose of determining rights of action for breach of rules,[202] causes the Delegated Powers Committee "considerable unease".[203] Lord Lester considered it "quite extraordinary" and "constitutionally improper" that such a power should be exercised by anyone other than Parliament or a Minister.[204]

161. The Treasury's Explanatory Notes on the draft Bill explain, "This clause does not remove any common law cause of action which a person might otherwise have. It allows a class of people to be able to recover losses just by showing that there has been a breach of a rule as a result of which they have suffered loss rather than having to rely on that breach as evidence of negligence". The FSA explain that the power to define private person "would allow us to ensure, in the interests of firms and consumers, that the same definition of private person is used to determine both who is a private person protected by particular rules, and who is a private person able to sue for breach of those (or other applicable) rules. This is a useful contribution to our ability to distinguish between the different levels of protection appropriate for different categories of consumer."[205] We accept that there is a good reason for a power to define "private person" but we are persuaded by the constitutional argument for not giving this discretion to the FSA. We therefore invite the Government to justify this provision or to amend it.

162. More information about the various forms of FSA power envisaged in the draft Bill is given in Tables I and II.

TABLES OF APPLICABLE REQUIREMENTS UNDER THE BILL

Table I : Authorised Persons


Nature of Requirement

Enforcement

Tribunal Hearing

Public Announcement of FSA Decision (after Tribunal Hearing (if any))

Evidential Status

FSA Rules*

general (cl 70)

asset identification (cl 73)

price stabilising (cl 75)

financial promotion (cl 76)

money laundering (cl 77)

auditors & actuaries (cl 196)

*FSMB refers only to "rules". Term covers rules at high level of generality (which FSA refers to as principles) as well as detailed rules


FSA enforcement and FSMB action by other persons (details below)

Contravention is not an offence and does not affect validity of transactions (cl 81)


Yes in respect of FSA enforcement action (details below)

Not generally mandatory; will depend on nature of enforcement action taken or FSA policy (details below)

Rule can state that compliance with, or contravention of, it tends to establish compliance with or contravention of, another rule (cl 79)

Breach of rule containing such a statement cannot itself lead to enforcement action (cl 79)



FSA public censure (cl 135)

Yes

Necessarily, yes



FSA financial penalty (cl 136)

Yes

FSA's general policy will be to announce but it suggests that there may be exceptional cases



FSA withdrawal of authorisation (cl 27)

Yes

As for fines. Also, person will be removed from public register of authorised persons (cl 33)



FSA cancellation of permission (cl 37)

Yes

As for fines. [Will this be apparent from register of authorised persons (cl 33)?]

Table I: Authorised Persons (Continued)


Nature of Requirement

Enforcement

Tribunal Hearing

Public Announcement of FSA Decision (after Tribunal Hearing (if any))

Evidential Status


FSA restitution order (cl 206)

Yes

No stated policy



FSA can ask court for injunction (cl 202) or restitution orders (cl 204)

N/A

N/A



Civil law claim by private persons unless rule excludes this or it is a rule about having/maintaining financial resources (cl 80)

N/A

N/A



Civil law claim by other persons if rule provides for it (cl 80)

N/A

N/A


FSA Guidance (cl 87)
  • it is standing guidance if it is in writing/other legible form and is intended to have continuing effect
  • guidance (standing or otherwise) may be on any matter

N/A

N/A

N/A

No formal evidential status

FSA Modifications/Waivers (cl 78)

FSA can modify/waive its rules (other than asset identification rules) in their application to an authorised person


N/A

N/A

N/A

N/A

Table II : Approved Persons


Nature of Requirement

Enforcement

Tribunal Hearing

Public Announcement of FSA Decision (after Tribunal Hearing (if any))

Evidential Status

Statement of Principles (cl 48)

FSA enforcement (cl 50) (details below) but no FSMB action by other persons (cl 48)

Yes

Not generally mandatory; will depend on nature of enforcement action taken or FSA policy (details below)

N/A


FSA fine (cl 50)

Yes

FSA's general policy will be to announce but it suggests that there may be exceptional cases; FSA expressly authorised to publish information about any decision not to proceed with proposal to impose fine (cl 53)



FSA public statement of misconduct (cl 50)

Yes

Necessarily, yes



FSA prohibition on employment (cl 40)

Yes

FSA policy, as for fines]



FSA withdrawal of approval (cl 47)

Yes

FSA policy as for fines]


Codes of Practice (cl 48)

code must accompany any statement of principles


Non-compliance with code of practice may amount to contravention of statement of principle to which it relates (cl 48)

N/A

N/A

Code may be relied upon so far as it tends to establish whether or not conduct complies with statement of principle (cl 48); has evidential value but is not conclusive

Requirements Applicable to Authorised Persons

Liable to enforcement action if knowingly concerned in contravention by authorised person (cl 50); forms of enforcement action as for contravention of statement of principles

Yes

Not generally mandatory; will depend on nature of enforcement action taken or FSA policy

N/A

Civil or criminal?

163. Article 6 of the ECHR guarantees the right to a fair trial. The precise content of this right depends on the classification of the proceedings in question for the purposes of the Convention. Where proceedings are classed as criminal rather than civil, individuals enjoy more extensive safeguards. On the face of the Bill as drafted, and in UK law, the disciplinary regimes will be civil rather than criminal in nature. For instance, Clause 81 expressly provides that breach of FSA rules is not an offence; and Part VI is headed Civil fines for market abuse. However, the courts will be bound to apply the Convention, and they might conclude, on the basis of the nature of the offence or the penalty, that proceedings which were civil in domestic law nonetheless attracted the provisions of the ECHR applicable to criminal cases.

164. Lord Lester pointed out to us, "These are not alien, foreign, curious European standards; the standards in Article 6 of the Human Rights Convention were drafted by British legal civil servants reflecting ancient British principles of natural justice and fairness and Article 6 is described in Strasbourg as the 'British' Article of the Convention."[206]

165. This issue has been a central part of many of the concerns that we have heard about the disciplinary and enforcement provisions of the Bill. We consider it here because it has influenced our thinking generally in this area; we also return to it specifically in the context of the proposed market abuse regime.

166. There are two key points: procedural safeguards, and certainty. First, for all proceedings, the ECHR entitles everyone to "a fair and public hearing" before "an independent and impartial tribunal".[207]

167. Further safeguards are imposed in criminal trials. Article 6.2 enshrines the presumption of innocence where someone is "charged with a criminal offence"; this is taken to include the privilege against self-incrimination. Article 6.3 gives additional rights in criminal cases, including:

  • Prompt and detailed information of the "nature and cause" of the charge;
  • Time and facilities to prepare a defence;
  • Right to representation;
  • Right to free legal assistance "when the interests of justice so require";
  • Right to examine and cross-examine witnesses.

168. Finally, the ECHR requires criminal offences to be clearly defined in law.[208] This is an issue we return to later in this chapter in relation to enforceable principles, and which we also consider later in the context of market abuse.

169. There has been much argument as to whether the general disciplinary and market abuse regimes of this Bill will count for these purposes as civil or criminal. Mr Guy Morton, a partner in Freshfields, considers them to be criminal.[209] So do Clifford Chance,[210] on the ground that the penalties at stake are criminal in nature, being intended to punish and deter.[211] Herbert Smith consider that the market abuse regime is criminal but acknowledge that there are arguments both ways with regard to the disciplinary procedures.[212]

170. The question is considered in detail in an Opinion by Lord Lester of Herne Hill QC and Javan Herberg, and a subsequent Advice by Lord Lester and Monica Carss-Frisk, commissioned by LIBA, BBA, the Futures and Options Association (FOA), the International Swaps and Derivatives Association (ISDA), the Institutional Fund Managers' Association (IFMA), Clifford Chance, Freshfields and Linklaters & Paines, and kindly supplied by them to us.[213] Lord Lester's view is as follows. "The case law of the European Court of Human Rights in this area is complex and sometimes inconsistent and unclear" . However "it is strongly arguable that all of the disciplinary offences, and in particular the market abuse offences, are indeed 'criminal'", because of "the nature of the offences, and the nature and severity of the penalties". Mr Davies put up counter-arguments, in relation to market abuse, in his Chancery Bar Association and Combar Spring Lecture, Financial Regulation and the Law, at Lincoln's Inn on 3 March;[214] Lord Lester addresses these arguments in his Advice in relation to both market abuse and general discipline and enforcement. In oral evidence at the end of our inquiry, Lord Lester and Lord Hobhouse of Woodborough agreed that proceedings involving the prospect of a large fine ought to attract the criminal safeguards.[215] However Lord Lester admitted that this was "a question of degree", depending on the seriousness of the penalty at stake.

171. The question whether the proposed market abuse regime is civil or criminal in ECHR terms is discussed in more detail below.

172. The Delegated Powers Committee draws attention to the uncertainty as to whether the Bill's processes are civil or criminal. It concludes, "We believe this uncertainty is unacceptable and that the position should be clarified in the legislation".[216] This view is consistent with a view expressed by Mr Morton of Freshfields: "whoever is right on these perhaps arcane matters it is essential, I would submit, that the position be clarified before the bill is passed, because nothing could be more damaging than to proceed and to find that there remained uncertainty or, even worse, that the first time the powers were used they were struck down on Convention grounds".[217]

173. We agree, and consider that it would be naïve not to expect someone to take the point, sooner rather than later. In our view, on the evidence, it is at least possible that the courts would find FSA disciplinary proceedings under the legislation to be of the nature of criminal justice. This creates a dilemma: building in criminal justice safeguards to the entire regime would make for an unwieldy, adversarial and expensive regime which neither the FSA nor the industry wants; not doing so creates the risk of successful legal challenge, leading to embarrassment and the need for further primary legislation.

174. We have no doubt that the Government will reflect seriously on this matter before finalising its proposals However, although s.19 of the Human Rights Act requires the Government to publish its conclusion as to whether or not the Bill as introduced into Parliament is compliant with the ECHR, it is not required to show its reasoning. In the present situation, this is unsatisfactory. We recommend that the Government should publish, as soon as possible, its reasoned view as to what ECHR standards will apply to FSA disciplinary proceedings, and its reasons for believing that the Bill will meet those standards. We can then reconsider the matter with both sides of the argument before us; and Parliament can then give the issue proper consideration as the Bill goes through.

Standard of proof

175. As a matter of English law, criminal charges must be proved beyond reasonable doubt; civil actions are decided on the balance of probabilities. On the face of it, therefore, designating a regime as "civil" rather than "criminal" advantages the prosecutor by making it easier for him to get a favourable result. This raises the question whether using the civil burden of proof would fall foul of the ECHR in relation to provisions which are criminal for that purpose.

176. We have been told that this concern may be misplaced,[218] since it is well-established that the court or tribunal in a civil action can apply a "sliding scale" of proof, applying more or less the criminal standard where criminal-type penalties are at stake. The FSA confirmed that this was its understanding;[219] and we understand that this would be sufficient to satisfy the ECHR.[220]

Disciplinary process: a moving target

177. The Treasury has indicated that, as a result of consultation, the disciplinary processes envisaged in the draft Bill are to be modified in certain important respects. Also, the FSA's proposals for operating within the statutory framework have developed as a result of its own consultation exercise and the Treasury's review. Whilst our recommendations are based on the Treasury's and the FSA's latest positions, we set out the background briefly below as this is helpful in understanding the current position. Time constraints meant that we were unable to take views from many witnesses on the FSA's latest proposals.

Original proposals

178. The disciplinary process envisaged in the draft Bill, in respect of contraventions by authorised persons, was as follows. For convenience, we refer to the person subject to proceedings as the "defendant".

  • If the FSA proposed to impose a financial penalty or public censure, it would give the defendant a warning notice,[221] including reasons.[222]
  • The defendant would have a reasonable period, specified in the notice, of at least 28 days, to make representations.[223]
  • The FSA "must then decide, within a reasonable period, whether to carry out its proposal".[224]
  • If the FSA decided to impose penalty or censure, it would give the defendant a decision notice,[225] including reasons.[226]
  • "The Authority may publish such information about the matter to which a decision notice relates, in such way, as it considers appropriate".[227]
  • At this point, the defendant could appeal to the Financial Services and Markets Appeal Tribunal to be set up under Clause 67.
  • From the Tribunal, there would be a right of appeal on a point of law to the High Court, by leave, or the Court of Session.[228]

179. The process in respect of individual approved persons was similar.[229]

Treasury's proposals: procedural safeguards

180. According to the Progress Report issued in March 1999, the Government is proposing in the light of consultation "to make significant improvements to the provisions relating to disciplinary procedures".[230] The FSA is to be required to establish and publish procedures and to act in accordance with such procedures; defendants are to be entitled to see the evidence against them; and FSA is not to publicise enforcement action until the full process, "including any tribunal procedures", is over.[231] The BBA and LIBA advocated these changes in their submissions to the Treasury; AUTIF welcome them.[232]

181. Also, following the Saunders judgment, oral evidence obtained under compulsion will not "generally" be admissible in criminal proceedings:[233] see below.

Treasury's proposals: first-instance tribunal

182. The Treasury have also announced changes to their plans for the Tribunal. The Tribunal is to be "a tribunal of first instance, fully able to consider the merits and facts of each case and with the authority to substitute its own conclusions for those of the FSA"; its name will be changed to reflect its role more accurately.[234] The power in the draft Bill,[235] for the Lord Chancellor to rule certain kinds of new evidence to be inadmissible before the Tribunal, is to be dropped; and the Government propose to "enhance [its] status and shorten the path to justice" by providing for appeal (on a point of law) direct to the relevant appeal court rather than via the High Court.[236]

183. In Lord Lester's opinion, the proposals for the Tribunal now meet the requirement of Article 6.1 of the ECHR for an entitlement to be heard by an "independent, impartial tribunal".[237]

FSA's December proposals: Quasi-Judicial Enforcement Committee

184. In December, before the Treasury's Progress Report, the FSA set out its proposals for operating the disciplinary process in Consultation Paper 17. Its aim was "to produce a process that will operate in an effective, efficient and demonstrably fair manner. In particular, there will be a clear separation between those who investigate and those who determine whether the FSA should impose sanctions and we propose to involve practitioners and public interest representatives in the process. There will also be an opportunity for oral hearings".[238]

185. CP17 proposed an Enforcement Committee, established by the FSA Board, "to consider cases in which FSA's operational staff believe that the exercise of the FSA's powers to impose a disciplinary sanction, restitution order or civil fine for market abuse is appropriate",[239] and to act on the Board's behalf. The Committee would have a full-time Chairman, employed by the FSA specifically for that purpose, recruited by open competition, and reporting to the Board. Committee staff would not be part of any FSA operational directorate. The Committee would have legal expertise, either in the person of the Chairman or another member, or through dedicated advisers. The Committee would have practitioner and public interest representatives, who would consider cases and hear representations alongside the Chairman; CP17 posed the question whether the decisions would be made by majority, or by the Chairman alone.

186. The Treasury Select Committee welcomed these proposals.

187. The arrangements described above would be internal to the FSA, and would not have statutory backing. It would therefore be open to a future FSA Board to adjust or abandon them at will; but they would continue to be bound by the requirements of fairness and the ECHR. The Delegated Powers Committee[240] and some of our witnesses[241] consider that the Enforcement Committee should feature in the Bill. In the view of the Minister,[242] this would be unnecessary and inappropriate, since "its entire legal being stems from...the Act and from the existence of powers of the Board of the FSA".

Relationship between Enforcement Committee and Tribunal

188. This report represents a snap shot at a moving target, and nowhere is this more apparent than on the question of the relationship between the Enforcement Committee proposed by the FSA and the first-instance Tribunal proposed by the Treasury. At the end of two hearings devoted largely to this subject, Mr Whittaker acknowledged, "We are all finding it difficult to accommodate the implications of there being a first instance tribunal". What is wanted is a system "which provides people with confidence that their decisions have been dealt with fairly but nevertheless by more speed than they might get with the Tribunal".[243]

189. In the course of our hearings, the role of the Enforcement Committee was discussed largely in terms of two models, as follows.

Model 1 Quasi-Judicial Enforcement Committee

190. In model 1, the FSA Enforcement Committee reaches decisions of a quasi-judicial character, as to guilt and penalty, from which the defendant can resort to the Tribunal. This appears to be roughly what the Treasury originally had in mind, as indicated by the Tribunal being called an "Appeal Tribunal" in the draft Bill.

191. In evidence, many witnesses told us about additional safeguards that would, in their view, have to be written into the Bill in order to ensure the fairness of this model. Lord Archer of Sandwell QC, Chairman of the Council on Tribunals, offered the following list:[244]

  • A "Chinese wall" between FSA supervisory and enforcement staff, perhaps reinforced by physical separation;[245]
  • Oral hearings;
  • The Enforcement Committee Chairman to be independent of the FSA and legally qualified—perhaps a judge, either seconded or retired;
  • The other members of any Enforcement Committee panel to have votes, rather than merely advising the Chairman.

192. Mr Sylvain of AUTIF supported Lord Archer's list.[246] On the other hand Mr Peter Vipond, Director of the BBA, said that it would make the Enforcement Committee look "awfully like a tribunal"![247]

193. Clifford Chance and Herbert Smith considered that it would demand more than a Chinese wall within the FSA. The former suggested that the Enforcement Committee might be split into two panels, for prosecution and adjudication.[248] The latter considered that the Enforcement Committee would have to be "a separate independent body, accountable to the Treasury".[249]

Model 2 Non-Judicial Enforcement Committee

194. In model 2, the Enforcement Committee cannot make decisions of a judicial character and its role is akin to that of a prosecuting authority rather than a court. If a case cannot be settled by agreement, the Enforcement Committee decides whether there still appears to be a prima facie case to answer;[250] if there is, it goes to the Tribunal.

195. This model was advocated to us by Clifford Chance.[251] In their view,[252] it met the requirement for clear separation between prosecution and adjudication. By creating a climate of fairness, it would encourage defendants to "buy into the result" at the Enforcement Committee stage, so that most cases could be agreed and few need go to the Tribunal. At the same time, because the Enforcement Committee was not an adjudicator, it could dispense with the full rigour of natural justice, and deliver the "fast and efficient results" required by the regulators[253] and by the industry.[254]

196. Model 2 was also advocated by Herbert Smith. They argued that building into the Enforcement Committee stage the safeguards required under model 1 would be "cumbersome"[255] and "not practical".[256] In their view, "The Enforcement Committee would act as a filter...You would be able to have settlements without admitting liability...I would not expect the breaches which have been described as administrative to find their way up to the Tribunal".[257]

FSA's April Proposals: Non-Judicial Enforcement Committee

197. On 13th April, following our hearings on these issues, the FSA and the Treasury gave us clarification of their thinking on the enforcement process.[258] The main points are:

  • Following the Treasury's clarification of the role of the Tribunal, the Enforcement Committee would not operate in the quasi-judicial manner envisaged in CP17. Instead, as the Treasury put it, there would be "a distinct separation between the regulatory procedures of the FSA, which are administrative in nature, and the judicial procedures of the Tribunal".

  • The practitioner and public interest members would have votes. (The Treasury confirm that this would present no legal difficulty.)

  • The Committee would make the decision to issue a Warning Notice.

  • At this stage, there would (according to the FSA) be an opportunity for settlement discussions, and for independent mediation between FSA staff and the defendant. The latter is intended to reduce the scope for oppressive plea-bargaining.[259]

  • There would also be disclosure by the FSA, and the opportunity for written or oral representations, but no witness evidence.

  • The Committee would ratify the terms of any settlement reached at this stage.

  • Settlements would be embodied in a Decision Notice, which would generally be published.

  • If no settlement were reached, the Committee would either dismiss the case, or issue a notice stating (in the FSA's words) "the action that the FSA considers appropriate (including any proposed penalty)".

  • If within 28 days the defendant did not opt for the Tribunal, the notice would be published and take effect.

  • If the defendant did opt for the Tribunal, the notice would not be published, and statements made by the defendant to the FSA during settlement discussions on a "without prejudice" basis would not be disclosed to the Tribunal.

198. This is neither model 1 nor model 2, but an elegant hybrid which we find attractive. The touchstone is the nature of the decision notice issued by the FSA at the end of proceedings before the Enforcement Committee. According to the FSA, this will contain a statement of the Committee's views on the action that the FSA considers appropriate, including any proposed penalty; in that respect, the Enforcement Committee will go further than a prosecuting authority. However, according to the FSA, the notice would embody a conclusion "that there remained a case to answer", rather than a "judicial determination"; if the case went to the Tribunal, the decision notice would not be published. According to the Treasury, "That decision is intended to be an administrative decision, for which the FSA must be accountable alongside its other decisions, and which must be taken in a fair and reasonable manner". If the defendant does not exercise the right to go to the Tribunal, the decision notice will take effect, as in model 1. If he does, it will be "set aside", becoming merely "the basis of the FSA's case to be put before the first instance Tribunal", as in model 2.

Opinion of the Committee on the disciplinary process

199. This is an area of the Treasury's original proposals which has given rise to great concern, and we commend both them and the FSA for responding to this concern and clarifying their thinking in this area. The Treasury's proposals in the Progress Report regarding the Tribunal are crucial, and are now broadly satisfactory, subject to matters discussed below. This has enabled the FSA to develop its thinking in relation to the pre-Tribunal stage, producing the hybrid model described in the previous paragraph. We are broadly satisfied with this too, again subject to the following points.

200. In our view, even if the Enforcement Committee is to have a non-judicial and purely administrative role, considerations of procedural fairness mean that it should still be clearly separate from the operational FSA. There must be sufficient procedural safeguards to give confidence, but not so many that the Enforcement Committee duplicates the Tribunal. It is desirable that most cases should be settled at the pre-Tribunal stage, as is the case at present; too many cases going to the Tribunal would create a bottleneck and expose everyone to enormous costs. The pre-Tribunal process must lead as transparently as possible to a fair and just decision in the public interest; it must avoid any impression of secretive and collusive plea-bargaining.

201. We therefore recommend that the Bill should be amended to require the following:

  • The FSA should set up an Enforcement Committee, or some equivalent mechanism to separate the functions of investigation and enforcement.

  • The Chairman of the Enforcement Committee should have appropriate legal qualifications.

  • The appointment of the Chairman of the Enforcement Committee by the FSA should be subject to approval by the Lord Chancellor (with appropriate protection for the Scottish interest).

  • The Enforcement Committee should give the defendant the opportunity of making oral representations before issuing a decision notice.

  • The Enforcement Committee should reach decisions by majority of all the members involved, rather than by the Chairman's decision alone.

  • In the interests of public confidence, all final decisions (i.e. decisions which are subject to no further appeal) should be made public, save in exceptional circumstances which would require to be justified.


Self-incrimination

202. As noted above, by virtue of Article 6.2 of the ECHR, in criminal proceedings, defendants have privilege against self-incrimination. Under the draft Bill, FSA investigators would have wide powers to require information[260] and to require persons to answer questions on oath;[261] failure to comply would be a criminal offence punishable by imprisonment.[262] Clause 104(5) provides that statements made under compulsion are not admissible in evidence in "criminal proceedings" (unless those proceedings are for perjury or for providing false information). Also, as noted above, following the Saunders judgment, oral evidence obtained under compulsion will not "generally" be admissible in criminal proceedings.[263]

203. However in the terms of the draft Bill proceedings before the FSA Enforcement Committee or the Tribunal are not criminal proceedings, and there is no provision to prevent them from seeing such evidence. If the courts took the view that the regime was nonetheless criminal in nature in ECHR terms, they might well strike down FSA or Tribunal verdicts obtained in this way.[264]

204. According to Lord Lester, "This is an area of the most serious potential mismatch between the statutory scheme and Article 6 of the Convention, and it is essential that the mismatch should be removed in the legislation itself, rather than leaving it to the courts to attempt to imply appropriate Article 6 safeguards into the legislation".[265]

205. To the extent that the courts hold disciplinary proceedings under this legislation to be criminal in ECHR terms, as discussed above, compelled oral testimony will be inadmissible. This would not render the power to compel information useless, since prosecutors could still use the "fruits" of such information, provided they were able to present their case to the Committee or Tribunal without relying on it.[266] We agree with Lord Lester that this matter is better resolved by Ministers and Parliament before enactment, rather than afterwards by the courts; we therefore look forward to seeing what the Government say about it in their reasoned response.

Costs before the Enforcement Committee

206. The draft Bill makes no provision for persons who incur costs defending themselves before the Enforcement Committee to receive any form of legal aid; nor does it provide for defendants who are vindicated by the Enforcement Committee to recover costs from the FSA. On the other hand, if the FSA imposes a financial penalty or fine, nothing in the draft Bill would prevent it from including in the amount an element of cost recovery.

207. The costs position for the stage internal to the FSA is perceived in some quarters as unfair. According to Mr Morton of Freshfields, it is a criticism of the current regime that "people have been effectively deterred from pursuing defences because they simply felt they could not afford it and ran the risk of being bankrupted if they tried to do so".[267]

208. Mr Morton added that this is an ECHR issue. Article 6.1 of the ECHR is understood to require "equality of arms" between the parties, in all cases whether civil or criminal. In criminal cases, Article 6.3 enshrines the right to free legal assistance "when the interests of justice so require".

209. Mr Antony Blunden, Company Secretary of Credit Suisse Financial Products, suggested that legal aid might be made available at least to individuals, as opposed to firms.[268] The BBA agree.[269] Mr Sylvain suggested that provision for award of costs might be restricted to individuals.[270]

210. The FSA claims that its thinking with regard to the disciplinary decision-making process is to keep costs to a minimum for firms or individuals who are involved in the proceedings and for the FSA itself.[271]

Costs before the Tribunal

211. It appears to be generally agreed that the Treasury's proposals for the Tribunal are now satisfactory, save in respect of costs.[272] This is an important qualification. As the FSA concedes,[273] the costs to a defendant of taking an action to the Tribunal are likely to be great, and the FSA's costs are likely to be no less. The draft Bill provides that the Tribunal can award costs against either side,[274] including the FSA.[275] The draft Bill says nothing about legal aid.

212. The Council on Tribunals is concerned that costs "may deter people from pursuing their remedies".[276] Lord Archer observed that most tribunals do not award costs; he suggested that parties should perhaps face paying the other side's costs only for vexatious, frivolous or unreasonable behaviour.[277]

213. Clifford Chance and Herbert Smith argue for legal aid.[278] The latter (according to their submission to the Treasury) are particularly concerned about unregulated persons, who may not have insurance. Lord Lester considers that the ECHR demands provision for legal aid "in a sufficiently serious and complex case".[279]

214. The FSA, in its second memorandum,[280] argues that "In general, the FSA should not be required to pay the costs of a respondent, except where it acted unreasonably in bringing the proceedings". On the other hand, if the FSA was unable to recover its costs from an unsuccessful defendant, "The FSA's costs would then fall to be paid by compliant firms through the FSA's fees".

Costs and fines

215. Nothing in the draft Bill would prevent the FSA from setting the amount of any fine or financial penalty to cover the cost of investigation and enforcement; and in CP17 it expresses the intention to do just that.[281] Clause 107 of the draft Bill expressly provides that, if investigation leads to a criminal prosecution and a conviction, the court may order the defendant to pay the costs of the investigation.

216. LIBA consider wrapping up costs in a fine to be "inappropriate".[282] Herbert Smith consider that fines and costs should be kept separate.[283] Lord Lester agrees;[284] in his view, any award of costs to the FSA should be by the Tribunal.

Opinion of the Committee on costs

217. The issue of costs is an important one. Defendants may well be deterred from pursuing their remedies by the prospect of their own costs, to say nothing of the costs of the FSA. This will be particularly true when the defendant is an individual. It should be noted that members of any regulated community already face a significant disincentive against contesting regulatory action, since win or lose they must continue to live with the regulator if they are to stay in the industry;[285] costs make this matter worse.

218. We therefore recommend that:

  • At the Enforcement Committee stage, each side should bear its own costs, save that the Committee should be able to award costs against the defendant or the FSA if they have behaved frivolously, vexatiously or unreasonably.

  • The FSA should be expressly prohibited from including its own costs in the amount of any fine.

  • The Treasury should consider whether the Tribunal's power to award costs either way should be restricted to cases of frivolous, vexatious or unreasonable behaviour.

  • Legal aid should be available at the Tribunal stage, so far as necessary to satisfy the ECHR.


Position of individuals

219. We have considered the position of individual employees who may be made scapegoats as part of a settlement with the FSA over some regulatory breach.[286] In written evidence (to which the FSA had nothing to add),[287] the Treasury tells us that, if a warning notice to a firm identifies an employee in prejudicial terms, the employee "generally" has a right to receive the notice and to make representations.[288] If the decision notice identifies him, he may have recourse to the Tribunal,[289] "to challenge the substance of the decision itself, or to challenge any opinion expressed by the Authority in relation to him".

220. We would observe that, as the proposals stand, such an employee would have no prospect of legal aid; and, whereas some employees might be supported by their firm, professional body or trade union in such circumstances, and some might have insurance, others might not. A court might come to such a person's aid, on the ECHR ground that there was not "equality of arms". However some such cases might never get to court: an employee might reasonably be reluctant to take to the Tribunal a decision which his employer had accepted, and wary of risking an adverse costs order. We make no recommendation for amendment to the draft Bill, beyond our recommendation above for legal aid at the Tribunal. But we draw attention to these issues, which might become relevant in the future.

221. The Treasury adds that, if an employer were to take disciplinary action against an employee arising out of dealings with the FSA, whether those dealings explicitly implicated the employee or not, the employee would have the usual protection of employment law.

Fines

222. The draft Bill sets no limit on the FSA's power to impose financial penalties and fines. In respect of fines against individual employees under Clause 50, the FSA must publish guidance as to the likely amount of fines, and must have regard to this guidance in particular cases.[290] Similarly, they must publish and have regard to statements of policy on financial penalties against authorised persons,[291] and civil fines for market abuse.[292]

223. Fines are to be retained by the FSA. The Minister explained: "The principle is that the people who breach the rules should help to pay the regulatory costs of those who abide by the rules".[293] As a precedent, she cited the new powers of local authorities to retain parking fines.

224. The FSA has explained to us how fine income will be budgeted and accounted for, in order to offset the cost of regulation to the industry, rather than providing the FSA with a budgetary windfall.[294] The FSA will present a "control total" of its running costs, excluding case-specific external enforcement costs. These will be accounted separately, and fine income will be set against them. If fine income exceeds external enforcement costs, the surplus will be used to discount FSA fees.

225. Mr Morton[295] considers that nonetheless this situation gives the FSA a conflict of interest. So do Herbert Smith;[296] they consider that fine income should go to the Treasury. On the other hand the BBA and AUTIF, APCIMS, the ABI and the FSA Practitioner Forum are content that fines should go to the FSA, subject to the accounting conventions proposed.[297] The Consumers' Association observed that in the end the cost of regulation is borne by consumers; they are content for fine income to reduce that cost, provided there is transparency.[298] Mr Farrow of LIBA suggested that fine income might instead be earmarked to provide legal aid in FSA proceedings; Mr Tim Herrington of Clifford Chance suggested hypothecating it to support the Compensation and Ombudsman schemes; either way, it would stay, as Mrs Knight put it, "within the system".

226. We note that representatives of the industries concerned would rather that fine income went to reduce the cost to them of regulation, as proposed, rather than being returned to the taxpayer at large via the Treasury. We too are content that fine income should go to the FSA. However we recommend that it should be returned gross to the regulated community as a discount on fees, with no offset for enforcement costs, in order to give the FSA the least possible interest in maximising fine income.

227. We acknowledge that this would make the control total of FSA running costs more volatile than if an offset operated.[299] On the other hand, an offset would not always operate fairly, since enforcement costs and fine income would sometimes fall in different years and on different fee-payers. To avoid excessive fluctuations in fees, the discount could be spread over a period, perhaps 3 years.

228. We have considered the case for fine income going to finance the Financial Services and Markets Compensation Scheme.[300] However we do not recommend this. It would involve cross-subsidy between different parts of the industry; and there is no reason why the amount of fines and the appropriate amounts of compensation should be related.

229. According to the IFAA, "There has been an element of headline-chasing in the fining policies of the previous regulators";[301] they would like the FSA's power to fine to be capped. We have considered the case for setting an upper limit on the fines which the FSA can impose; we consider it better that there should be no such limit. We note that the amount of fine at stake is likely to be a factor in the courts' consideration of whether or not to apply the criminal justice standards of the ECHR: see above. Therefore one way to strengthen the case for treating the regime as civil would be to cap the FSA's power to fine; but we suspect that, to have this effect, the cap would have to be set so low as to be unrealistic in the context of financial services.

Certainty

230. Certainty as to what conduct is permitted and what is not is in principle desirable for the sake of business confidence, compliance cost, and the encouragement of innovation. Certainty is also an ECHR requirement.[302]

231. The draft Bill would impose some requirements by direct operation of statute: e.g. the "general prohibition" in Clause 7 against carrying on a regulated activity unless either authorised or exempt. In addition, authorised persons (i.e. businesses) are to be governed by rules, made by the FSA under Clauses 70-86. The FSA proposes to use its general rule-making power to lay down a set of "Principles for businesses".[303] Furthermore, approved persons, i.e. staff of authorised persons holding responsible posts, are to be governed by principles of conduct issued by the FSA under Clause 48, each of which must be underpinned by a code of practice; the code will "help to determine" or "tend to establish" whether a principle has been breached, but will not be definitive.

232. According to Lord Lester, the general disciplinary provisions can be expected to meet the standard of Article 7 of the ECHR, "provided that the statements of principle and other 'requirements under the Act' are not themselves hopelessly vague".[304] In his view, the draft Principles for Businesses fail this test.[305] Others agree.[306] LIBA consider that disciplinary action should have to be based on breach of a particular rule, not merely a principle;[307] and that compliance with the underpinning rules or code should constitute a "safe harbour" against charges of breaching a principle.[308]

233. The FSA defends the proposed Principles for Businesses.[309] They continue a form of regulation introduced in 1989 to meet industry demands for short, simple rules, and to provide "underlying moral content" to the more detailed requirements. They give flexibility for both the regulator and the regulated. They will be amplified "through a combination of rules, evidential provisions and guidance" (see below); but, the FSA insist, "There may...be circumstances in which it will be proper to take disciplinary action, based exclusively on one or more of the Principles". Arbitrary operation of such rules by the FSA will be checked by practitioner involvement in the Enforcement Committee, and by the Tribunal.

234. Mr Whittaker also mounted a general defence of non-prescriptive rules.[310] Such rules could focus on desired outcomes rather than prescribed methods, as recommended by the Better Regulation Unit of the Cabinet Office (formerly the Deregulation Unit); and case law suggested that broadly-worded provisions were not necessarily incompatible with the certainty requirement of the ECHR.[311]

235. Clifford Chance consider that even some of the statutory offences are inadequately defined, e.g. the authorisation offence in Clause 12.[312] This issue is particularly acute in connection with market abuse: see below.

236. The obvious way to give greater certainty is to write more detailed rules. This however is not necessarily what is wanted. Fear of over-prescription was expressed to us by the BBA[313] and the Consumers' Association.[314] The BBA told us that over-prescription "can easily undermine the open relationship that currently exists between regulated and regulator"; it would also make the process more "legalistic" and slow. The Consumers' Association concede that, within clear principles, "firms should be left to run their businesses as they see fit".

Pre-Clearance, Guidance and Waiver

237. Writing more rules increases certainty at the expense of flexibility. Yet in the fast-moving world of financial services flexibility is very important.[315] A way to improve certainty without losing flexibility is for the FSA to elaborate on its requirements by guidance—what Mr Whittaker called "gentler forms of law"[316]—or to modify or waive them in particular situations.

238. Clause 78 of the draft Bill gives the FSA power to waive or modify some of its rules in respect of a particular authorised person. This applies to the following rules: auditors and actuaries;[317] financial promotion;[318] general;[319] money laundering;[320] and price stabilising.[321] The FSA cannot waive asset identification rules,[322] or any other rules.[323] Rules may be waived only if compliance would be unduly burdensome or pointless, and waiver would not expose others to risk. Waivers must be published, subject to commercial confidentiality and international law.

239. Clause 79 allows the FSA to make what may be referred to as "non-actionable rules". Breach of such a rule is not a disciplinary offence in itself. But breach "may be relied on as tending to establish contravention of such other rule as may be specified"; and compliance will likewise tend to establish compliance with another rule.

240. Clause 87 gives the FSA a power—but not a duty—to issue guidance, or to pay others to do so. The FSA may charge for guidance, and/or publish it. "Standing guidance" must be notified to the Treasury. The Bill gives FSA guidance no special evidential status.

241. The Delegated Powers Committee calls for the Bill to be amended to provide that "those who are seeking the certainty which is not necessarily granted either by the legislation or the FSA rules should be entitled to seek advance rulings...which enable them to know in advance of taking any particular action that it does not contravene the rules".[324]

242. Herbert Smith consider that compliance with guidance should constitute a safe harbour.[325] Mr Blunden agrees;[326] he too would like the FSA to be obliged to give guidance on request.[327] Lest this requirement should overburden the FSA, he proposed that they should "out-source" the guidance function, and charge for it.[328] The City of London Law Society suggested to the Treasury that the FSA might be given authority to give its guidance evidential or safe harbour status. Clifford Chance believe that FSA guidance on statutory provisions should be evidential, and that FSA guidance on its own rules etc. should be evidential or even definitive.[329] As a precedent, they cited the money laundering regulations, which give evidential weight to industry guidance on identification requirements.[330]

243. According to the Treasury's Overview,[331] the Government intends the powers of waiver and guidance to achieve the same effect as "no action letters". In the Progress Report,[332] the Government acknowledges demand for guidance to have evidential status; it regards this as unnecessary, because "it is unlikely that the FSA would wish to or could properly discipline firms who have been following its guidance". (The Minister said the same, but added "in good faith".[333]) It also acknowledges demand for the FSA to be obliged to give guidance on request; the Government considers that this would be too burdensome. It adds, "the FSA intends to make active use in future of guidance, and also of the waiver power".

244. The FSA is "exploring ways" to improve certainty.[334] Mr Whittaker told us, "We have no particular problem with the idea that our guidance should be given some special status".[335] However he cautioned against putting the FSA under an obligation to give guidance on demand: "We know that some overseas regulators find much of their resource is taken up in giving guidance rather than in the areas they themselves would wish to target". He also pointed to the danger of engendering a "dependency culture" among business managers.[336]

245. It appears that there is room for movement on this issue. Mr Roe told us on 25th March, "If the Committee comes up with some new and...specific ideas about precisely what is meant by evidential weight, I am sure that Treasury Ministers will be happy to consider suggestions".[337]

246. In our view, strengthening the role of guidance is a better way to meet the legitimate demand for greater certainty, than writing more rules. We do not recommend that the FSA be required to give guidance or pre-clearance: this would be an unreasonable burden, and a restriction on its freedom of action. Nor do we recommend any absolute safe harbours; traders in financial services are adept at finding loopholes, and any indemnity risks being left behind by the market as soon as it is committed to paper.

247. However we recommend that the following should be given enhanced evidential status:

  • FSA non-actionable rules, in respect of statutory requirements and FSA actionable rules, including rules expressed as "principles";

  • Codes of practice, in respect of principles of conduct for approved persons.

248. The enhanced status which we have in mind is as follows. When the FSA or any other authority or person pursues an alleged breach of a statutory requirement, actionable rule or principle of conduct, the defendant may assert that he has complied with an underpinning non-actionable rule or code of practice. Where the regulator cannot disprove this, it should be required to prove either intent to breach the requirement, actionable rule or principle, or recklessness or possibly negligence as to whether it was breached.

FSA Personnel

249. Besides the rules and processes, many of these things will in practice depend on the people who apply them. LIBA is anxious that the FSA should recruit people with market experience; Mr Farrow acknowledged that this is "far from easy".[338]

250. Mr Davies told us that, in responding to the FSA's consultation paper on costs and fees, industry expressed concern that the FSA should pay salaries adequate to attract good staff.[339] He said that most FSA recruits have "some market experience", which is complemented by the presence of senior practitioners on the Board itself and on various committees.[340] He also told us about the FSA's "grey panthers", staff recently retired from senior positions in banking and insurance. He admitted, however, that FSA has difficulty retaining its best staff: "it is very difficult for us to pay top dollar".[341] He also admitted that most recruits to junior and middle levels of the FSA's monitoring functions have compliance experience rather than trading experience—though he did not concede that this was a weakness.[342]

251. In its second memorandum, the FSA provided us with more information.[343] Staff turnover was "unsustainably high" just after the merger of the SROs in June 1998 (19 per cent in the first three months), but has since fallen to an annual rate of 7 per cent (7.9 per cent for senior staff). 360 staff have been recruited since June, including "high calibre individuals"; most of those recruited to front-line regulatory posts have come "from the firms that we regulate". Total staff in March was around 1,850, and 85 below complement; the budget for the current year allows for an increase in headcount by 105. Base pay at the FSA is pitched "against median or second quartile pay levels in the relevant sectors of the financial services market"; "in feedback from employees who have resigned from the FSA, pay has rarely featured as the dominant reason for leaving". A "significant number" of senior staff currently have a public sector background; but 29 per cent of senior staff in front-line regulatory work have private sector market experience; 15 per cent are lawyers. "55 per cent of the management team...in the supervisory area of our Investment Businesses Division have market experience; 25 per cent of that 55 per cent have experience in the compliance field. We expect this profile to be more typical of the experience of our managers in the future". There are both inward and outward secondments.

252. The Minister told us that the FSA needed "'real' practitioners" on its staff, rather than just compliance officers.[344] She hoped that a spell at the FSA would come to be a highlight of a City CV.[345] Mr Alan Whiting, Director of Regulation and Compliance at the LME, observes that this is the situation in the USA, and sees no reason why it should not happen here.[346]

253. The staffing of the FSA is not a matter for the Bill; but we observe that it will crucially affect how the Bill's provisions work in practice. It will therefore be important for the FSA to attract appropriately qualified staff; this means that salaries need to be competitive. There is also merit in practitioners with up-to-date experience of trading in the regulated industries being seconded to the FSA, so as to bring that experience to bear directly on the regulatory process.


180  para 6.2 Back

181  Q 264 Back

182  McDonald Q 340 Back

183  Q 202 Back

184  Hewitt Q 94 Back

185  Q 109 Back

186  Q 203 Back

187  QQ 139, 201, 263, 286 Back

188  Appendix 4, QQ 6 & 287 Back

189  Q 1 Back

190  Cl. 135 Back

191  Cl. 136 Back

192  Cl. 206 Back

193  Cl. 27 Back

194  Cl. 37 Back

195  Cl. 80 Back

196  Cl. 47 Back

197  Cl. 40 Back

198  Cl. 50 Back

199  Cl. 202-5 Back

200  Cl. 215 Back

201  para 6.2 Back

202  Cl. 80(5) Back

203  Annex B, para 23 Back

204  Q 434 Back

205  Appendix 61 Back

206  Q 434 Back

207  Art. 6.1 Back

208  Art. 7.1 Back

209  Q 200 Back

210  Q 202 Back

211  QQ 243, 247 Back

212  Q 261 Back

213  See Annexes C and D Back

214  See also Appendix 61 Back

215  QQ 439, 453-462 Back

216  Annex B, para 20 Back

217  Q 200; cp Lester Q 434 Back

218  Mayhew Q 207 Back

219  QQ 58-59 Back

220  Annex C, paras 55-57 Back

221  Cl. 137 Back

222  Cl. 210 Back

223  Cl. 210 Back

224  Cl. 210 Back

225  Cl. 138 Back

226  Cl. 211 Back

227  Cl. 211 Back

228  Cl. 69 Back

229  Cl. 51 Back

230  para 6.1 Back

231  para 6.5; cp Appendix 4, para 20 Back

232  Appendix 19 Back

233  Progress Report, para 6.10 Back

234  Progress Report, para 6.4 Back

235  Cl. 68(3)(b) Back

236  Progress Report, para 6.5 Back

237  Q 434 Back

238  para 6, cp para 208, and Appendix 4, para 19 Back

239  para 180 Back

240  para 20 Back

241  e.g. AUTIF Q 264 Back

242  Q 112 Back

243  Q 316 Back

244  Q 293 Back

245  Q 298 Back

246  QQ 264, 300 Back

247  Q 303 Back

248  Q 209 Back

249  Q 261 Back

250  Archer Q 314 Back

251  Q 211 Back

252  Q 216 Back

253  Q 219 Back

254  LIBA Q 239, AUTIF Q 300, BBA QQ 263, 301, Securities Institute Q 301 Back

255  Q 261 Back

256  Q 310 Back

257  Q 306 Back

258  Appendices 2 and 9 Back

259  Lester QQ 434 and 440, Whittaker Q 448 Back

260  Cl. 95 Back

261  Cl. 104 Back

262  Cl. 106 Back

263  Progress Report, para 6.10 Back

264  Morton QQ 200 & 240, Clifford Chance QQ 202 & 243 Back

265  Annex C, para 61 Back

266  QQ 202, 241 Back

267  Q 200 Back

268  Q 292 Back

269  Q 304 Back

270  Q 319 Back

271  Appendix 5, para 14 Back

272  e.g. Clifford Chance Q 202 Back

273  Appendix 5, para 15 Back

274  Sch. 10 para 10 Back

275  Overview para 11.2 Back

276  Q 318 Back

277  Q 237 Back

278  Q 237 Back

279  Annex C, para 44 Back

280  Appendix 5, paras 17-18 Back

281  para 109 Back

282  Q 254 Back

283  Q 261 Back

284  QQ 434, 455 Back

285  QQ 55, 239 Back

286  QQ 113-5, 304 Back

287  Appendix 5, para 30 Back

288  Cl. 210 Back

289  Cl. 211 Back

290  Cl. 54 Back

291  Cl. 141 Back

292  Cl. 59 Back

293  Q 99 Back

294  Q 10, cp Appendix 5, para 20 Back

295  Q 253 Back

296  QQ 261, 321-9 Back

297  QQ 323-5 Back

298  Q 260 Back

299  Appendix 5, para 20 Back

300  Q 99 Back

301  Q 139 Back

302  Art. 7.1 and Lester, Q 434 Back

303  FSA Consultation Paper 13 Back

304  Annex C, para 67 Back

305  Annex D, para 7 Back

306  Morton Q 200, LIBA QQ 220-2 Back

307  QQ 201 & 226 Back

308  Q 223 Back

309  Q 224; Appendix 5, paras 22-27 Back

310  Q 266 Back

311  See also Appendix 61 Back

312  Q 227 Back

313  Q 263 Back

314  Q 260 Back

315  Sylvain Q 276 Back

316  Q 266 Back

317  Cl. 196 Back

318  Cl. 76 Back

319  Cl. 70-72 Back

320  Cl. 77 Back

321  Cl. 75 Back

322  Cl. 73 Back

323  For a complete list of proposed rule-making powers, see para 14 of Annex B Back

324  Annex B, para 20 Back

325  Q 285 Back

326  Q 274 Back

327  Q 271 Back

328  Q 284 Back

329  QQ 227 & 231 Back

330  Q 232 Back

331  para 5.7 Back

332  para 5.7 Back

333  Q 121 Back

334  Appendix 4, para 40 Back

335  Q 229 Back

336  Q 283 Back

337  Q 230 Back

338  Q 256 Back

339  Q 10 Back

340  Q 37; Appendix 5, para 28 Back

341  Q 38 Back

342  Q 44 Back

343  Appendix 5 Back

344  Q 97 Back

345  Q 98 Back

346  Q 257 Back


 
previous page contents next page

House of Lords home page Parliament home page House of Commons home page search page enquiries

© Parliamentary copyright 1999
Prepared 29 April 1999