FSA fines to be more closely linked to income

Published on

The FSA has published its new penalties policy, which could see enforcement fines treble in size.

Under the new framework, fines will be linked more closely to income and be based on up to 20% of a firm’s revenue from the product or business area linked to the breach over the relevant period up to 40% of an individual’s salary and benefits (including bonuses) from their job relating to the breach in non-market abuse cases and a minimum starting point of £100,000 for individuals in serious market abuse cases.

The regulator’s policy statement, ‘Enforcement Financial Penalties’, creates a new and structured five-step penalty-setting framework. This has been established following a period of consultation with the industry subsequent to the publication of a Consultation Paper in July 2009.

The new framework is based on the three principles of disgorgement, discipline and deterrence and consists of removing any profits made from the misconduct setting a figure to reflect the seriousness of the breach considering any aggravating and mitigating factors achieving the appropriate deterrent effect and applying any settlement discount.

The policy statement also sets out a new policy in relation to the circumstances when the FSA may reduce a fine because of its financial impact and
clarifies the situations in which the FSA may publicise enforcement action in criminal cases bringing the FSA’s approach in line with other agencies.

Margaret Cole , FSA director of enforcement and financial crime, said: “Despite industry opposition we have decided to implement these proposals as we believe enforcement penalties are a powerful tool to help change behaviour in the industry. We imposed record fines in 2009

COMMENT ON MORTGAGE SOUP

We want to hear from you!
Leave a comment and get the conversation started.
You need to register to post, so please login or sign up below.

Latest articles

Wider mortgage options put borrower circumstances in focus on Lenders Live

Borrowers with historic credit problems and smaller deposits have more routes to explore, but...

Christodoulides joins ConveyBuddy as head of distribution

Former NatWest national account manager Luke Christodoulides has joined ConveyBuddy as head of distribution. Christodoulides...

MorganAsh adds BSL translation to customer websites

MorganAsh has introduced British Sign Language translations across its corporate website and itswhoiam.me consumer...

London flat owners face highest risk of resale losses

Nearly four in 10 London flats resold after being held for between five and...

Ireland boosts Help to Buy as UK prepares new first-time buyer scheme

Ireland has increased the maximum support available to first-time buyers under its Help to...

Latest publication

Other news

I’m 49. My dad’s 73. Between us we’ve found the hole in later life lending

I turn 50 in December, and the marketing has already started. Funeral plans, over-50s...

Wider mortgage options put borrower circumstances in focus on Lenders Live

Borrowers with historic credit problems and smaller deposits have more routes to explore, but...

Christodoulides joins ConveyBuddy as head of distribution

Former NatWest national account manager Luke Christodoulides has joined ConveyBuddy as head of distribution. Christodoulides...