Penalties

The FCA may decide to impose a financial penalty or issue a public censure. The purpose of this form of penalty is:

• to promote high standards of regulatory and market conduct;
• to deter firms or persons who have committed regulatory breaches from continuing to commit further breaches;
• to deter other firms from committing similar breaches; and
• to demonstrate the benefits of compliant behaviour.

In deciding whether to impose a financial penalty or public censure, the FCA will take into consideration a number of facts. The following, are some of the factors they would consider:

• The nature, seriousness and impact of the breach, including:
  o whether it was deliberate or reckless;
  o frequency;
  o the amount of any benefit gained or loss avoided as a result of the breach;
  o whether the breach reveals serious or systematic weaknesses in the firms systems and controls;
  o whether confidence in the markets has been damaged or put at risk;
  o loss to consumers;
  o if it involves any financial crime; and
  o whether a number of small issues collectively warrant discipline, if not individually.

• The conduct of the firm after the breach including:

o whether the firm informed the FCA and if they did how quickly, effectively they did so;
o degree of the firm’s co-operation during the investigation;
o remedial steps the firm had put in place;
o likelihood that the same type of breach would re-occur if no action was taken;
o whether the person involved has complied with other regulatory body rulings in relation to their behaviour; and
o if the person has tried to mislead the FCA by providing false, incomplete or misleading information.

• The previous disciplinary record of the firm or person.
• FCA guidance and other published materials.
• Action taken by the FCA in similar cases.
• Action taken by other domestic or international regulatory authorities.