Joint Committee on Financial Services and Markets Second Report


ANNEX

FINANCIAL SERVICES AND MARKETS BILL

REQUIREMENTS APPLICABLE TO AUTHORISED PERSONS, APPROVED PERSONS AND REQUIREMENTS GENERALLY APPLICABLE*

I : Authorised Persons

Type of Requirement

Enforcement

Tribunal Hearing

Public Announcement of FSA Decision after full process (including any Tribunal Hearing) completed

Evidential Status

FSA Rules

general (cl 70)

asset identification
(cl 73)

endorsed codes made by other bodies (cl 74)**

price stabilising (cl 75)

financial promotion (cl 76)

money laundering (cl 77)

auditors and 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 action under the Bill 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 a rule containing this statement is not itself actionable (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 may be removed from public register of authorised persons (cl 33)



FSA intervention (not viewed as disciplinary sanction by FSA) (Pt XI)

Yes

FSA's view is that appropriateness depends on circumstances of case



FSA restitution order (cl 206)

Yes

No stated policy



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

N/A

N/A

* These tables seek to identify three things: (i) the main types of requirements that apply to authorised persons (sole traders, companies, partnerships and unincorporated associations that are authorised to carry on regulated activities) and approved persons (senior employees of authorised persons or of their contractors) and also certain requirements that are generally applicable; (ii) the consequences of failing to comply with these requirements; and (iii) the status of guidance or codes of conduct that may relate to these requirements. They do not attempt to enumerate every individual provision of the Bill under which a contravention may arise or a sanction may be imposed

** PR, para 5.10 states that the general power for the FSA to endorse codes is to be withdrawn. It is possible that a more restricted power may be included instead

I : Authorised Persons (contd)

Type of Requirement

Enforcement

Tribunal Hearing

Public Announcement of FSA Decision after full process (including any Tribunal Hearing) completed

Evidential Status


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

II : Approved Persons

Nature of Requirement

Enforcement

Tribunal Hearing

Public Announcement of FSA Decision after full process (including any Tribunal Hearing) completed

Evidential Status

Statement of Principles (cl 48)

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

Generally Yes (details below)

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 disclose but it suggests that there may be exceptional cases; FSA expressly authorised to publish information about any decision not to impose a 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



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

N/A

N/A


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); types of enforcement action as above

Generally Yes (details above)

As above

N/A



 
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Prepared 2 June 1999