Enforcing the Law
Related information
The FSA's Enforcement Division investigates when firms breach our rules or the provisions of the Financial Services and Markets Act 2000 (FSMA).
FSMA allows us to take action such as:
- withdrawing a firm's authorisation;
- disciplining authorised firms and people approved by the FSA to work in those firms;
- imposing penalties for market abuse;
- applying to the Court for injunction and restitution orders; and
- prosecuting various offences.
A chronological list of Final Notices can be found here (see also Financial Penalty notices, Market Misconduct notices).
FSMA also gives us powers to take action under the insider dealing provisions of the Criminal Justice Act 1993 and the Money Laundering Regulations 2007. FSMA gives us the tools we need to do the job of enforcement – including the power to interview people and require them to hand over documents. It also sets out the circumstances when we are allowed to use those powers.
The General Prohibition
We also investigate people who are carrying on regulated activities – such as accepting deposits or giving investment advice – without authorisation. This is described by FSMA as a breach of the general prohibition. As a prosecuting body, we take a serious view of such criminal offences. Those breaking the law risk imprisonment and other sanctions.
Liaison with other bodies
We work with other regulatory bodies and law enforcement agencies, such as the police, both here and abroad. We work together to ensure that issues are taken forward by the right authority.
Enforcement's standards
We take a risk-based approach in selecting which cases to pursue: this includes considering our Regulatory Objectives, the Principles of Good Regulation and our Referral Criteria. We consider carefully what course of action would be a proportionate response, exercise a common standard of fairness in the use of our powers and act in a manner consistent with the Human Rights Act 1998. There is more information on how we operate in the Decision Procedure and Penalties manual (DEPP) and Enforcement Guide (EG)
Decision making
Enforcement staff prepare and recommend action in individual cases. These are then considered by a separate Committee of the FSA, called the Regulatory Decisions Committee (RDC).
Settlement is possible at any stage of the process. All settlement decisions are made by two senior members of FSA staff (of at least Director of Division level). The RDC is the decision-maker for enforcement matters which do not settle. RDC members come from a wide range of backgrounds reflecting the interests of industry and consumers. The independent Financial Services and Markets Tribunal handles appeals in the decisions process for those who do not agree with our decision.
Understanding the work of the Enforcement division
For more detailed information about what we do see Enforcement in Focus.
