Enforcement Referral Criteria
When we consider whether to refer a case to our Enforcement division for investigation, we take a number of criteria into account1. You can find them listed below.
We have framed the criteria as a set of questions. They take into account our statutory objectives, business priorities and other issues such as the response of the firm or individual to the issues we are considering for referral.
Not all the criteria will be relevant to every case and there may be other considerations we have not mentioned that are relevant to a particular case. Staff from the referring department, the Enforcement division and, in some cases, from other areas of the FSA work together to decide whether to refer a case for investigation.
The Referral Criteria
- Has there been actual or potential consumer loss/detriment?
- Is there evidence of financial crime or risk of financial crime?
- Are there actions or potential breaches that could undermine public confidence in the orderliness of financial markets?
- Are there issues that indicate a widespread problem or weakness at the firm/issuer?
- Is there evidence that the firm/issuer/individual has profited from the action or potential breaches?
- Has the firm/issuer/individual failed to bring the actions or potential breaches to the attention of the FSA?
- Is the issue to be referred relevant to an FSA strategic priority?
- If the issue does not fall within an FSA strategic priority, does the conduct in question make the conduct particularly egregious and presenting a serious risk to one of the FSA's Objectives?
- What was the reaction of the firm/issuer/individual to the breach?
- Overall, is the use of the enforcement tool likely to further the FSA's aims and Objectives?
1 Certain additional considerations may apply in cases of suspected market misconduct; these are set out in the Enforcement Manual Decision Procedure and Penalties manual. Cases involving unauthorised business or breaches of the Threshold Conditions are not assessed using these criteria.