Part XXV

Injunctions and Restitution

Restitution required by FCA or PRA

Power of FCA or PRA to require restitution.
384
1
The appropriate regulator may exercise the power in subsection (5) if it is satisfied that an authorised person or recognised investment exchange (“the person concerned”) has contravened a relevant requirement, or been knowingly concerned in the contravention of such a requirement, and—
a
that profits have accrued to him as a result of the contravention; or
b
that one or more persons have suffered loss or been otherwise adversely affected as a result of the contravention.
2
The FCA may exercise the power in subsection (5) if it is satisfied that a person (“the person concerned”)—
a
has engaged in market abuse, or
b
by taking or refraining from taking any action has required or encouraged another person or persons to engage in behaviour which, if engaged in by the person concerned, would amount to market abuse,
and the condition mentioned in subsection (3) is fulfilled,
3
The condition is—
a
that profits have accrued to the person concerned as a result of the market abuse; or
b
that one or more persons have suffered loss or been otherwise adversely affected as a result of the market abuse.
4
But the FCA may not exercise that power as a result of subsection (2) if, having considered any representations made to it in response to a warning notice, there are reasonable grounds for it to be satisfied that—
a
the person concerned believed, on reasonable grounds, that his behaviour did not fall within paragraph (a) or (b) of that subsection; or
b
he took all reasonable precautions and exercised all due diligence to avoid behaving in a way which fell within paragraph (a) or (b) of that subsection.
5
The power referred to in subsections (1) and (2) is a power to require the person concerned, in accordance with such arrangements as the regulator exercising the power (“the regulator concerned”) considers appropriate, to pay to the appropriate person or distribute among the appropriate persons such amount as appears to the regulator concerned to be just having regard—
a
in a case within paragraph (a) of subsection (1) or (3), to the profits appearing to the regulator concerned to have accrued;
b
in a case within paragraph (b) of subsection (1) or (3), to the extent of the loss or other adverse effect;
c
in a case within paragraphs (a) and (b) of subsection (1) or (3), to the profits appearing to the regulator concerned to have accrued and to the extent of the loss or other adverse effect.
6
“Appropriate person” means a person appearing to the regulator concerned to be someone—
a
to whom the profits mentioned in paragraph (a) of subsection (1) or (3) are attributable; or
b
who has suffered the loss or adverse effect mentioned in paragraph (b) of subsection (1) or (3).
7
“Relevant requirement” means—
a
a requirement imposed by or under this Act or by a qualifying EU provision specified, or of a description specified, for the purposes of this subsection by the Treasury by order; ...
b
a requirement which is imposed by or under any other Act and whose contravention constitutes an offence mentioned in section 402(1) ; ...
c
a requirement imposed by the Alternative Investment Fund Managers Regulations 2013
.
or
d
a requirement which is imposed by Part 7 of the Financial Services Act 2012 (offences relating to financial services) and whose contravention constitutes an offence under that Part.
8. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9
The PRA is the “appropriate regulator” in the case of a contravention of—
a
a requirement that is imposed by the PRA under any provision of this Act,
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, or
c
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.
10
In the case of a contravention of a requirement that is imposed by a qualifying
EU
provision, “the appropriate regulator” 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 this section.
11
In the case of a contravention of a requirement where the contravention constitutes an offence under this Act, the “appropriate regulator” is the regulator which has power to prosecute the offence (see section 401).
12
The FCA is the “appropriate regulator” in the case of a contravention of any other requirement.
13
The Treasury may by order amend the definition of “appropriate regulator”.
S. 384 modified (18.7.2002 for certain purposes and 21.8.2002 otherwise) by The Electronic Commerce Directive (Financial Services and Markets) Regulations 2002 (S.I. 2002/1775), regs. 1, 12(1)
S. 384(5) extended (with modifications) (1.12.2001) by S.I. 2001/2657, arts. 1(1), 3 (which was revoked (8.10.2001) by S.I. 2001/3083, arts. 1(2), 23); S.I. 2001/3538, art. 2(1)
S. 384(5) extended (with modifications) (1.12.2001) by S.I. 2001/3083, arts. 1(2), 3; S.I. 2001/3538, art. 2(1)
Words in s. 384(7)(a) inserted (1.4.2007 for certain purposes and 1.11.2007 otherwise) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2007 (S.I. 2007/126), regs. 1(2), 3(5), Sch. 5 para. 15
Pt. 25 amended (1.12.2001) by S.I. 2001/2657, arts. 1(1), 10(10), 11(10) (which was revoked (8.10.2001) by S.I. 2001/3083, arts. 1(2), 23); S.I. 2001/3538, art. 2(1)
Pt. 25 amended (1.12.2001) by S.I. 2001/3083, arts. 1(2), 10(10), 11(10); S.I. 2001/3538, art. 2(1)
Pt. 25 extended (1.12.2001) by S.I. 2001/3646, arts. 1(1), 3(1)(a)
S. 384 applied (with modifications) (1.4.2013) by The Financial Services Act 2012 (Transitional Provisions) (Enforcement) Order 2013 (S.I. 2013/441), arts. 1(1), 17(2)
S. 384 applied (with modifications) (1.4.2013) by The Financial Services Act 2012 (Transitional Provisions) (Enforcement) Order 2013 (S.I. 2013/441), arts. 1(1), 18(3)
Words in s. 384(1) substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 9 para. 23(2)(a) (with Sch. 20); S.I. 2013/113, art. 2(1)(b), Sch. Pt. 2; S.I. 2013/423, art. 3, Sch.
Words in s. 384(1) inserted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 9 para. 23(2)(b) (with Sch. 20); S.I. 2013/113, art. 2(1)(b), Sch. Pt. 2; S.I. 2013/423, art. 3, Sch.
Word in s. 384(2) substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 9 para. 23(3) (with Sch. 20); S.I. 2013/113, art. 2(1)(b), Sch. Pt. 2; S.I. 2013/423, art. 3, Sch.
Word in s. 384(4) substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 9 para. 23(3) (with Sch. 20); S.I. 2013/113, art. 2(1)(b), Sch. Pt. 2; S.I. 2013/423, art. 3, Sch.
Words in s. 384(5) substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 9 para. 23(4)(a) (with Sch. 20); S.I. 2013/113, art. 2(1)(b), Sch. Pt. 2; S.I. 2013/423, art. 3, Sch.
Words in s. 384(5) substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 9 para. 23(4)(b) (with Sch. 20); S.I. 2013/113, art. 2(1)(b), Sch. Pt. 2; S.I. 2013/423, art. 3, Sch.
Words in s. 384(6) substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 9 para. 23(5) (with Sch. 20); S.I. 2013/113, art. 2(1)(b), Sch. Pt. 2; S.I. 2013/423, art. 3, Sch.
Words in s. 384(7)(a) substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 9 para. 23(6)(a) (with Sch. 20); S.I. 2013/113, art. 2(1)(b), Sch. Pt. 2; S.I. 2013/423, art. 3, Sch.
Words in s. 384(7)(b) substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 9 para. 23(6)(b) (with Sch. 20); S.I. 2013/113, art. 2(1)(b), Sch. Pt. 2; S.I. 2013/423, art. 3, Sch.
S. 384(8) omitted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by virtue of Financial Services Act 2012 (c. 21), s. 122(3), Sch. 9 para. 23(7) (with Sch. 20); S.I. 2013/113, art. 2(1)(b), Sch. Pt. 2; S.I. 2013/423, art. 3, Sch.
S. 384(9)-(13) inserted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 9 para. 23(8) (with Sch. 20); S.I. 2013/113, art. 2(1)(b), Sch. Pt. 2; S.I. 2013/423, art. 3, Sch.
Words in s. 384 heading substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 9 para. 23(9) (with Sch. 20); S.I. 2013/113, art. 2(1)(b), Sch. Pt. 2; S.I. 2013/423, art. 3, Sch.
Words in s. 384 cross-heading substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 9 para. 23(10) (with Sch. 20); S.I. 2013/113, art. 2(1)(b), Sch. Pt. 2; S.I. 2013/423, art. 3, Sch.
Pt. 25 applied (with modifications) (E.W.) (9.7.2013) by The Legal Aid, Sentencing and Punishment of Offenders Act 2012 (Referral Fees) Regulations 2013 (S.I. 2013/1635), regs. 1, 24(1)
Word in s. 384(7) omitted (22.7.2013) by virtue of The Alternative Investment Fund Managers Regulations 2013 (S.I. 2013/1773), reg. 1, Sch. 1 para. 29(a)
S. 384(7)(c) and word inserted (22.7.2013) by The Alternative Investment Fund Managers Regulations 2013 (S.I. 2013/1773), reg. 1, Sch. 1 para. 29(b)
S. 384 applied (with modifications) (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by The Financial Services Act 2012 (Consumer Credit) Order 2013 (S.I. 2013/1882), arts. 1(1), 3(10)
S. 384(7)(d) and word inserted (1.4.2014) by Financial Services (Banking Reform) Act 2013 (c. 33), s. 148(5), Sch. 10 para. 3(4); S.I. 2014/377, art. 2(2)(c)
Word in s. 384(7)(b) omitted (1.4.2014) by virtue of Financial Services (Banking Reform) Act 2013 (c. 33), s. 148(5), Sch. 10 para. 3(4); S.I. 2014/377, art. 2(2)(c)