Financial Services Act 2012

Financial Services Act 2012

2012 CHAPTER 21

Commentary

Part 2 - Amendments of Financial Services and Markets Act 2000

Recognised investment exchanges and clearing houses

Section 33: Power to take disciplinary measures against recognised bodies

395. Section 33 inserts into FSMA new sections 312E to 312K. New sections 312E and 312F confer on the Bank and the FCA new disciplinary powers.

396. New section 312E confers on the FCA and the Bank the power to publish a statement that a recognised body has contravened a relevant requirement (defined in subsections (2) and (3) respectively). This is consistent with the power available to the FCA and the PRA to publish similar statements in relation to authorised persons (section 205 (public censure)).

397. New section 312F confers on the Bank and the FCA the power to impose on a recognised clearing house or recognised investment exchange (as the case may be) a financial penalty. This is consistent with the power available to the FCA and the PRA in relation to authorised persons (section 206 (financial penalties)).

398. New section 312G requires the Bank and the FCA, before publishing a statement under section 312E, or imposing a financial penalty, to issue a warning notice. This is consistent with the requirement imposed on the PRA and the FCA (section 207 (proposal to take disciplinary measures)). If, after considering any representations received in response to the warning notice, the Bank or the FCA decide to take the proposed disciplinary step, the relevant regulator must issue a decision notice in accordance with the requirement imposed by the new section 312H. Again, this is consistent with the requirement imposed on the FCA and the PRA in relation to a decisions to take disciplinary measures in relation to authorised persons (section 208 (decision notice)). A person who receives a decision notice under this section has the right to refer the matter to the Tribunal (subsection (4)).

399. New section 312I requires the Bank and the FCA (as the case may be) to provide a copy of a statement published under section 312E to the recognised body concerned, and to any person to whom a copy of the decision notice was given under section 393(4) (third party rights).

400. New section 312J requires the Bank and the FCA to prepare and issue a statement of policy with respect to the imposition of financial penalties under new section 312F and the amount of penalties under that section. The policy as regards the amount of a penalty must include having regard to the seriousness of the contravention in question and the extent to which the contravention was deliberate or reckless. Before issuing a statement of policy under this section, the Bank and the FCA are required to publish a copy of the statement in draft form and conduct a consultation exercise (new section 312K).