Hearings and appeals
Section 23: Proceedings before Tribunal
271.Many provisions of FSMA confer on a person subject to certain decisions of the FSA the right to refer the matter to the Tribunal (defined in section 417(1) of FSMA as the Upper Tribunal). For example, section 92(7) confers such a right on a person subject to a decision of the FSA to impose a financial penalty in respect of a breach of rules made under Part 6. Part 9 of FSMA makes provision for proceedings before the Tribunal. Section 133(5) specifies that, in relation to a reference or appeal, the Tribunal must determine what (if any) is the appropriate action for the decision-maker (that is, the FSA) to take in relation to the matter referred or appealed to the Tribunal. This means that the Tribunal may substitute for the opinion of the FSA its own view as to the precise nature of regulatory action, such as a variation of a permission to carry on regulated activities under Part 4, which the FSA should take.
272.Subsection (2)(a) makes consequential amendments to section 133(1)(a) as a result of the conferral of functions on the FCA and the PRA.
273.Subsection (2)(b) replaces section 133(5) and (6) with new subsections (5) to (6A), and subsection (2)(c) inserts new subsection (7A). These amendments have the effect of preserving the arrangements under FSMA as regards the consideration of certain types of decisions of the FCA, the PRA and the Bank and the determinations which may be made by the Tribunal in respect of such decisions. The decisions within this category are decisions concerning punitive measures designed to discipline a person for a contravention of a relevant requirement (see the new subsections (5) and (7A)). For example, a person subject to a decision by the FCA to impose a penalty under section 206 (financial penalties) may refer the matter to the Tribunal which, on determining the matter and deciding that the FCA’s decision should not be upheld, must remit the matter to the FCA with such directions (if any) as it considers appropriate for the purposes of giving effect to its determination as to the action which should be taken by the FCA. These directions could, for example, specify that, in light of new evidence put before the Tribunal, the most appropriate course of action would be for the FCA to impose a financial penalty of £150,000 in respect of a contravention, rather than the £100,000 set out in the decision notice referred to the Tribunal.
274.In relation to other matters which may be referred or appealed to the Tribunal, the scope of the determinations which may be made by the Tribunal is more limited (see new subsections (6) and (6A)). For example, in relation to a decision by the PRA to vary a person’s permission to carry on regulated activities, the Tribunal will no longer be able to reach its own view as to the precise nature of the variation which should be made by the PRA. Instead, if the Tribunal were not to uphold the PRA’s decision, the Tribunal would be required to remit the matter to the PRA with a direction to reconsider the matter and reach a decision in accordance with the findings of the Tribunal. Such findings may only concern certain matters (listed in the new subsection (6A)) such as issues of fact or law. This distinction is drawn between “disciplinary” and other measures, as in line with the new judgement-based approach to supervision, the FCA, the PRA and the Bank are best placed to form a view as to the precise nature of supervisory action taken in pursuance of wider public-policy aims such as financial stability in the case of the PRA and the Bank or consumer protection, market integrity and competition in the case of the FCA.
275.Subsections (3) to (5) make consequential changes to various provisions of Part 9.
