Part XIV Disciplinary Measures

F1204AMeaning of “relevant requirement” and “appropriate regulator”

(1)

The following definitions apply for the purposes of this Part.

(2)

“Relevant requirement” means a requirement imposed—

(a)

by or under this Act, F2...

F3(aa)

by regulations under section 11 of the Civil Liability Act 2018,

F4(aza)

by or under Part 1 of the Pensions Act 2008 in relation to the scale requirement in section 28B or the asset allocation requirement in section 28C,

F5(ab)

by or under the Securitisation Regulations 2024,

F6(ac)

by small pots regulations within the meaning of Chapter 2 of Part 2 of the Pension Schemes Act 2026,

(b)

by a F7qualifying provision specified, or of a description specified, for the purposes of this subsection by the Treasury by order F8, F9...

(c)

by the Alternative Investment Fund Managers Regulations 2013 F10, or

(d)

by the Undertakings for Collective Investment in Transferable Securities Regulations 2011.

(3)

The PRA is “the appropriate regulator” in the case of a contravention of—

(a)

a requirement that is imposed under any provision of this Act by the PRA;

(b)

a requirement under section 56(6) where the authorised person concerned is a PRA-authorised person and the prohibition order concerned is made by the PRA;

F11(c)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F12(d)

a requirement under section 62A(2) where F13the revised statement of responsibilities is to be provided to the PRA only;

(e)

a requirement under section 64B(2) or (5) where the conduct rules concerned are made by the PRA;

(f)

a requirement under section 64C(1) to notify the PRA that disciplinary action has been taken.

F14(fa)

a requirement imposed by regulation 8A(2) of the Securitisation Regulations 2024 where the institutional investor concerned is a PRA-authorised person;

F15(g)

a requirement imposed by regulation 38 of the Securitisation Regulations 2024 on a PRA-authorised person in a case where the temporary prohibition imposed under regulation 37(1) or (2) of those Regulations was imposed by the PRA.

F16(3A)

Either the PRA or the FCA is “the appropriate regulator” in the case of a contravention of—

(a)

a requirement under section 59(1) or (2) where the authorised person concerned is a PRA-authorised person and the approval concerned falls to be given by the PRA;

(b)

a requirement under section 60A(1) or (2) where the authorised person concerned is a PRA-authorised person and the approval concerned falls to be given by the PRA;

F17(ba)

a requirement under section 62A(2) where the revised statement of responsibilities is to be provided to the FCA and the PRA;

(c)

a requirement under section 63(2A) where the approval concerned is within section 63(1A)(a);

(d)

a requirement under section 63E(1) where the authorised person concerned is a PRA-authorised person and the function concerned is of a description specified in rules made by the PRA;

(e)

a requirement under section 63F(1), (2), (4), (6) or (7) where the authorised person concerned is a PRA-authorised person and the certificate concerned relates to a function of a description specified in rules made by the PRA.

(4)

In the case of a contravention of a requirement that is imposed by a qualifying EU provision, “the appropriate regulator” for the purpose of any provision of this Part is whichever of the PRA or the FCA (or both) is specified by the Treasury by order in relation to the qualifying EU provision for the purposes of that provision of this Part.

(5)

In the case of a contravention of a requirement where the contravention constitutes an offence, the “appropriate regulator” is whichever of the PRA or the FCA has power to prosecute the offence (see section 401).

F18(6)

The FCA is “the appropriate regulator” in the case of a contravention of any other requirement imposed—

(a)

by or under this Act;

F19(aza)

by or under Part 1 of the Pensions Act 2008 in relation to the scale requirement in section 28B or the asset allocation requirement in section 28C,

F20(aa)

by regulations under section 11 of the Civil Liability Act 2018;

F21(ab)

by or under the Securitisation Regulations 2024;

F22(ac)

by small pots regulations within the meaning of Chapter 2 of Part 2 of the Pension Schemes Act 2026;

(b)

by the Alternative Investment Fund Managers Regulations 2013; or

(c)

by the Undertakings for Collective Investment in Transferable Securities Regulations 2011.

(7)

The Treasury may by order amend the provisions defining “the appropriate regulator”.

205 Public censure.

F23(1)

If the F24appropriate regulator considers that an authorised person has contravened F25a relevant requirement imposed on the person, it may publish a statement to that effect.

F26(2)

If the FCA considers that a person other than an authorised person has contravened a relevant Part 5A requirement imposed on the person, it may publish a statement to that effect.

206 Financial penalties.

(1)

If the F27 appropriate regulator considers that an authorised person has contravened F28a relevant requirement imposed on the person, it may impose on him a penalty, in respect of the contravention, of such amount as it considers appropriate.

F29(1A)

If the FCA considers that a person other than an authorised person has contravened a relevant Part 5A requirement imposed on the person, it may impose on the person a penalty, in respect of the contravention, of such amount as it considers appropriate.

(2)

F30. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)

A penalty under this section is payable to the F31regulator that imposed the penalty.

F32206A Suspending permission to carry on regulated activities etc

(1)

If the F33appropriate regulator considers that an authorised person has contravened a relevant requirement imposed on the person, it may—

(a)

suspend, for such period as it considers appropriate, any permission which the person has to carry on a regulated activity; or

(b)

impose, for such period as it considers appropriate, such limitations or other restrictions in relation to the carrying on of a regulated activity by the person as it considers appropriate.

F34(1A)

The power conferred by subsection (1) is also exercisable by the FCA if it considers that an authorised person has contravened a requirement imposed on the person by—

(a)

the Payment Services Regulations F352017, or

(b)

the Electronic Money Regulations 2011.

F36(1B)

The power conferred by subsection (1) may not be exercised in relation to a contravention of a requirement imposed under section 122A, 122B, 122C, 122G, 122H, 122I, F37122IA, 123A or 123B.

(2)

In subsection (1)—

“ permission ” means any permission that the authorised person has, whether given (or treated as given) by F38the FCA or the PRA or conferred by any provision of this Act;

F39...

(3)

The period for which a suspension or restriction is to have effect may not exceed 12 months.

(4)

A suspension may relate only to the carrying on of an activity in specified circumstances.

(5)

A restriction may, in particular, be imposed so as to require the person concerned to take, or refrain from taking, specified action.

(6)

The F40appropriate regulator may—

(a)

withdraw a suspension or restriction; or

(b)

vary a suspension or restriction so as to reduce the period for which it has effect or otherwise to limit its effect.

(7)

The power under this section may (but need not) be exercised so as to have effect in relation to all the regulated activities that the person concerned carries on.

(8)

Any one or more of the powers under—

(a)

subsection (1)(a) and (b) of this section, and

(b)

sections 205 and 206,

may be exercised in relation to the same contravention.

F41206BProhibition or restriction on carrying on of relevant designated activities

(1)

If the FCA considers that a person carrying on a relevant designated activity has contravened a relevant Part 5A requirement imposed on the person in relation to that activity, it may—

(a)

prohibit the person, for such period as it considers appropriate, from carrying on that activity, or

(b)

impose, for such period as it considers appropriate, such limitations or other restrictions in relation to the carrying on of that activity by the person as it considers appropriate.

(2)

A prohibition may relate only to the carrying on of an activity in specified circumstances.

(3)

A restriction may, in particular, be imposed so as to require the person concerned to take, or refrain from taking, specified action.

(4)

The FCA may, on the application of the person to whom it relates—

(a)

withdraw a prohibition or restriction, or

(b)

vary a prohibition or restriction so as to reduce the period for which it has effect or otherwise to limit its effect.

(5)

The power under this section may, but need not, be exercised so as to have effect in relation to all the relevant designated activities that the person concerned carries on.

(6)

Any one or more of the powers under—

(a)

subsection (1)(a) and (b) of this section, and

(b)

sections 205 and 206,

may be exercised in relation to the same contravention.

207 Proposal to take disciplinary measures.

(1)

If F42a regulator proposes—

(a)

to publish a statement in respect of an authorised person (under section F43205(1)), F44...

(b)

to impose a penalty on an authorised person (under section F45206(1)), F46 or

(c)

to suspend a permission of an authorised person or impose a restriction in relation to the carrying on of a regulated activity by an authorised person (under section 206A),

it must give the authorised person a warning notice.

F47(1A)

If the FCA proposes—

(a)

to publish a statement in respect of a person under section 205(2),

(b)

to impose a penalty on a person under section 206(1A), or

(c)

to impose a prohibition or restriction on a person under section 206B,

it must give the person a warning notice.

(2)

A warning notice about a proposal to publish a statement must set out the terms of the statement.

(3)

A warning notice about a proposal to impose a penalty, must state the amount of the penalty.

F48(4)

A warning notice about a proposal to suspend a permission or impose a F49prohibition or restriction must state the period for which the suspension F50, prohibition or restriction is to have effect.

208 Decision notice.

(1)

If F51a regulator decides—

(a)

to publish a statement under section F52205(1) (whether or not in the terms proposed), F53. . .

(b)

to impose a penalty under section F54206(1) (whether or not of the amount proposed), F55 or

(c)

to suspend a permission or impose a restriction under section 206A (whether or not in the manner proposed),

it must without delay give the authorised person concerned a decision notice.

F56(1A)

If the FCA decides—

(a)

to publish a statement in respect of a person under section 205(2),

(b)

to impose a penalty on a person under section 206(1A), or

(c)

to impose a prohibition or restriction on a person under section 206B,

it must without delay give the person a decision notice.

(2)

In the case of a statement, the decision notice must set out the terms of the statement.

(3)

In the case of a penalty, the decision notice must state the amount of the penalty.

F57(3A)

In the case of a suspension F58, prohibition or restriction, the decision notice must state the period for which the suspension F58, prohibition or restriction is to have effect.

(4)

If F59a regulator decides to—

(a)

publish a statement in respect of an authorised person under section F60205(1), F61. . .

(b)

impose a penalty on an authorised person under section F62206(1), F63 or

(c)

suspend a permission of an authorised person, or impose a restriction in relation to the carrying on of a regulated activity by an authorised person, under section 206A,

the authorised person may refer the matter to the Tribunal.

F64(5)

If the FCA decides to—

(a)

publish a statement in respect of a person under section 205(2),

(b)

impose a penalty on a person under section 206(1A), or

(c)

impose a prohibition or restriction on a person under section 206B,

the person may refer the matter to the Tribunal.

F65208AApplications under section 206B(4): procedure and right to refer to Tribunal

(1)

This section applies to an application under subsection (4) of section 206B for the variation or withdrawal of a prohibition or restriction imposed under that section.

(2)

If the FCA decides to grant the application, it must give the applicant written notice of its decision.

(3)

If the FCA proposes to refuse the application, it must give the applicant a warning notice.

(4)

If the FCA decides to refuse the application, it must give the applicant a decision notice.

(5)

If the FCA gives the applicant a decision notice, the applicant may refer the matter to the Tribunal.

209 Publication.

F66(1)

After a statement under section F67205(1) is published, F68the regulator concerned must send a copy of it to the authorised person and to any person on whom a copy of the decision notice was given under section 393(4).

F69(2)

After a statement under section 205(2) is published, the FCA must send a copy of it to the person to whom the statement relates and to any person to whom a copy of the decision notice was given under section 393(4).

210 Statements of policy.

(1)

F70Each regulator must prepare and issue a statement of its policy with respect to—

F71(a)

the imposition of penalties, suspensions F72, prohibitions or restrictions under this Part;

(b)

the amount of penalties under this Part; and

(c)

the period for which suspensions F73, prohibitions or restrictions under this Part are to have effect.

F74(1A)

Each regulator's policy with respect to the imposition of penalties, suspensions or restrictions under this Part must include policy with respect to their imposition in relation to conduct which constitutes or may constitute an offence by virtue of section 23(1A) (authorised persons carrying on credit-related regulated activities otherwise than in accordance with permission).

(2)

F75A regulator's policy in determining what the amount of a penalty should be F76, or what the period for which a suspension F77, prohibition or restriction is to have effect should be, must include having regard to—

(a)

the seriousness of the contravention in question in relation to the nature of the requirement contravened;

(b)

the extent to which that contravention was deliberate or reckless; and

(c)

whether F78the person against whom action is to be taken is an individual.

(3)

F79A regulator may at any time alter or replace a statement issued F80by it under this section.

(4)

If a statement issued under this section is altered or F81replaced by a regulator, the regulator must issue the altered or replacement statement.

(5)

F82A regulator must, without delay, give the Treasury a copy of any statement which it publishes under this section.

(6)

A statement issued under this section F83by a regulator must be published by the F84regulator in the way appearing to the F84regulator to be best calculated to bring it to the attention of the public.

(7)

In exercising, or deciding whether to exercise, its power under section 206 F85, 206A or 206B in the case of any particular contravention, F86a regulator must have regard to any statement published F87by it under this section and in force at the time when the contravention in question occurred.

(8)

The F88regulator may charge a reasonable fee for providing a person with a copy of the statement.

211 Statements of policy: procedure.

(1)

Before F89a regulator issues a statement under section 210, the F90regulator must publish a draft of the proposed statement in the way appearing to the F90regulator to be best calculated to bring it to the attention of the public.

(2)

The draft must be accompanied by notice that representations about the proposal may be made to the F91regulator within a specified time.

(3)

Before issuing the proposed statement, the F91regulator must have regard to any representations made to it in accordance with subsection (2).

(4)

If the F91regulator issues the proposed statement it must publish an account, in general terms, of—

(a)

the representations made to it in accordance with subsection (2); and

(b)

its response to them.

(5)

If the statement differs from the draft published under subsection (1) in a way which is, in the opinion of the F92regulator, significant, the F92regulator must (in addition to complying with subsection (4)) publish details of the difference.

(6)

F93A regulator may charge a reasonable fee for providing a person with a copy of a draft published under subsection (1).

(7)

This section also applies to a proposal to alter or replace a statement.