We have extensive statutory powers of investigation, including powers to require the production of documents and to require certain persons to attend interviews. In our Enforcement Guide (EG), we say that investigators may not always consider it necessary to use statutory powers and may seek to obtain the information voluntarily (see Chapter 4 of EG). We explain our practice here.

Our standard practice is generally to use statutory powers to require the production of documents or the answering of questions in interview. This is for reasons of fairness, transparency and efficiency. It will sometimes be appropriate to depart from this standard practice, for example:

  • For suspects or possible suspects in criminal or market abuse investigations we may prefer to question that person on a purely voluntary basis. In such a case, the interviewee does not have to answer but if he does, those answers may be used against him in subsequent proceedings, including criminal or market abuse proceedings.
  • In the case of third parties with no professional connection with the financial services industry, such as the victims of an alleged fraud or misconduct, we will usually seek information voluntarily.
  • In some cases, we are asked by overseas regulators to obtain documents or conduct interviews on their behalf. In these cases, we will not necessarily adopt our standard approach as we have to consider with the overseas regulator the most appropriate method for obtaining evidence for use in their country.

We try to ensure that the position is clear to those from whom we obtain information. It will either be required from them using our statutory powers or it will be obtained on a purely voluntary basis (whether that person is part of the regulated community or not). We will always take proportionality into consideration when requiring or requesting information in our investigations.

The exercise of statutory powers does not mean that we necessarily consider a person unco-operative or suspected of something. The exercise of such powers is standard practice, even against those who are merely witnesses.

Interviews

The type of interview is a decision for the FSA. A person required to attend an interview by the use of statutory powers cannot insist that such an interview takes place voluntarily. If someone does not attend an interview required under the Financial Services and Markets Act 2000 (the Act) then he can be dealt with by the court as if he were in contempt (where the penalties can be a fine, imprisonment or both). Similarly, a person asked to attend an interview on a purely voluntary basis cannot insist on being compelled.

If someone chooses not to attend a voluntary interview, or refuses to answer any questions at such an interview, then this will not expose that person to any kind of penalty. However, if the interviewee chooses to provide answers to questions at such an interview then this may mean that he gets credit for co-operation should he be convicted ultimately of a criminal offence or be found to have committed market abuse or other misconduct.

Regulated firms and Approved Persons

Regulated firms and Approved Persons have an obligation to be open and co-operative with the FSA (as a result of Principle 11 for Businesses and Statement of Principle 4 for Approved Persons). In a formal enforcement investigation, we will, as explained above, make it clear to the person concerned whether he is required to produce information or answer questions under the Act or whether the provision of answers is purely voluntary. The fact that the person concerned is a regulated person does not affect this.

We will not bring proceedings against such a person under these Principles because he chooses not to attend or answer questions at a purely voluntary interview. However, if such a person does not comply with a requirement imposed by the exercise of statutory powers, he may be held to be in contempt of court, and we may also choose to bring proceedings for breach of Principle 11 or Statement of Principle 4 as this is a serious form of non-co-operation.

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