In today’s paper on the scope of the FCA, the FSA said new regulator’s lower tolerance to consumer detriment will require enforcement action to be enhanced.
It said: “Based on FSA experience of thematic work, a greater use of cross-firm supervision is likely to result in more enforcement cases, and thus a need for greater enforcement resource.”
It continued that the FCA’s ‘credible deterrence’ strategy will be strengthened by the FSA’s new penalty framework, which gives a stronger link between the benefit a firm gets from its misconduct and the size of the firm.
In addition, the FCA will make public disciplinary action at an earlier stage, as part of its aim of greater transparency.
The government has previously announced that the FCA will have the power to publish warning notices. Today’s paper noted that this power must strike a balance between openness and respecting private rights and due process.
Given this, the government has said it will be a requirement to consult the person concerned before a warning notice is published, so taking into account the risk of, for example, reputational damange.
In the paper, it said: “The FCA will build on the FSA’s success and maintain the momentum so that markets are cleaner and consumers are treated fairly.
“It will be ready to utilise new powers provided under the Financial Services Act 2010, including powers to suspend authorised and approved persons; impose penalties on persons that perform controlled functions without approval; both fine an authorised person and withdraw authorisation with respect to the same rule breaches; and publish information about decision notices.”
