S. 36 in force at 7.3.2016 by S.I. 2015/490, art. 2(1)(c) (with savings and transitional provisions in S.I. 2015/492 (as amended by S.I. 2015/1660))

Words in s. 36(4)(a)(i) substituted (28.4.2022) by The Criminal Justice Act 2003 (Commencement No. 33) and Sentencing Act 2020 (Commencement No. 2) Regulations 2022 (S.I. 2022/500), regs. 1(2), 5(1), Sch. Pt. 1

Words in s. 36(4)(a)(i) substituted (7.2.2023 at 12.00 p.m.) by The Judicial Review and Courts Act 2022 (Magistrates’ Court Sentencing Powers) Regulations 2023 (S.I. 2023/149), regs. 1(2), 2(1), Sch. Pt. 1 table

http://www.legislation.gov.uk/ukpga/2013/33/section/36Financial Services (Banking Reform) Act 2013An Act to make further provision about banking and other financial services, including provision about the Financial Services Compensation Scheme; to make provision for the amounts owed in respect of certain deposits to be treated as a preferential debt on insolvency; to make further provision about payment systems and securities settlement systems; to make provision about the accounts of the Bank of England and its wholly owned subsidiaries; to make provision in relation to persons providing claims management services; and for connected purposes.texttext/xmlenStatute Law Database2024-09-06Expert Participation2024-08-01PART 4Conduct of persons working in financial services sectorOffence
36Offence relating to a decision causing a financial institution to fail1

A person (“S”) commits an offence if—

a

at a time when S is a senior manager in relation to a financial institution (“F”), S—

i

takes, or agrees to the taking of, a decision by or on behalf of F as to the way in which the business of a group institution is to be carried on, or

ii

fails to take steps that S could take to prevent such a decision being taken,

b

at the time of the decision, S is aware of a risk that the implementation of the decision may cause the failure of the group institution,

c

in all the circumstances, S's conduct in relation to the taking of the decision falls far below what could reasonably be expected of a person in S's position, and

d

the implementation of the decision causes the failure of the group institution.

2

A “group institution”, in relation to a financial institution (“F”), means F or any other financial institution that is a member of F's group for the purpose of FSMA 2000 (see section 421 of that Act).

3

Subsections (1) and (2) are to be read with the interpretative provisions in section 37.

4

A person guilty of an offence under this section is liable—

a

on summary conviction—

i

in England and Wales, to imprisonment for a term not exceeding the general limit in a magistrates’ court (or 6 months, if the offence was committed before 2 May 2022) or a fine, or both;

ii

in Scotland, to imprisonment for a term not exceeding 12 months or a fine not exceeding the statutory maximum, or both;

iii

in Northern Ireland, to imprisonment for a term not exceeding 6 months or a fine not exceeding the statutory maximum, or both;

b

on conviction on indictment, to imprisonment for a term not exceeding 7 years or a fine, or both.

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<p>
S. 36 in force at 7.3.2016 by
<ref href="http://www.legislation.gov.uk/id/uksi/2015/490">S.I. 2015/490</ref>
,
<ref href="http://www.legislation.gov.uk/id/uksi/2015/490/article/2/1/c">art. 2(1)(c)</ref>
(with savings and transitional provisions in
<ref href="http://www.legislation.gov.uk/id/uksi/2015/492">S.I. 2015/492</ref>
(as amended by
<ref href="http://www.legislation.gov.uk/id/uksi/2015/1660">S.I. 2015/1660</ref>
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<p>
Words in
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substituted (28.4.2022) by
<ref href="http://www.legislation.gov.uk/id/uksi/2022/500">The Criminal Justice Act 2003 (Commencement No. 33) and Sentencing Act 2020 (Commencement No. 2) Regulations 2022 (S.I. 2022/500)</ref>
,
<ref href="http://www.legislation.gov.uk/id/uksi/2022/500/regulation/1/2">regs. 1(2)</ref>
,
<ref href="http://www.legislation.gov.uk/id/uksi/2022/500/regulation/5/1">5(1)</ref>
,
<ref href="http://www.legislation.gov.uk/id/uksi/2022/500/schedule/part/1">Sch. Pt. 1</ref>
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Words in
<ref href="http://www.legislation.gov.uk/id/ukpga/2013/33/section/36/4/a/i">s. 36(4)(a)(i)</ref>
substituted (7.2.2023 at 12.00 p.m.) by
<ref href="http://www.legislation.gov.uk/id/uksi/2023/149">The Judicial Review and Courts Act 2022 (Magistrates’ Court Sentencing Powers) Regulations 2023 (S.I. 2023/149)</ref>
,
<ref href="http://www.legislation.gov.uk/id/uksi/2023/149/regulation/1/2">regs. 1(2)</ref>
,
<ref href="http://www.legislation.gov.uk/id/uksi/2023/149/regulation/2/1">2(1)</ref>
,
<ref href="http://www.legislation.gov.uk/id/uksi/2023/149/schedule/part/1">Sch. Pt. 1</ref>
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<part eId="part-4" period="#period1">
<num>
<strong>PART 4</strong>
</num>
<heading>Conduct of persons working in financial services sector</heading>
<hcontainer name="crossheading" eId="part-4-crossheading-offence" period="#period1">
<heading>
<em>Offence</em>
</heading>
<section eId="section-36" period="#period1">
<num>
<noteRef href="#key-8fee51807d8d4febe5113839ba50c6d7" marker="I1" class="commentary I"/>
36
</num>
<heading>Offence relating to a decision causing a financial institution to fail</heading>
<subsection eId="section-36-1">
<num>1</num>
<intro>
<p>A person (“S”) commits an offence if—</p>
</intro>
<paragraph eId="section-36-1-a">
<num>a</num>
<intro>
<p>at a time when S is a senior manager in relation to a financial institution (“F”), S—</p>
</intro>
<subparagraph eId="section-36-1-a-i">
<num>i</num>
<content>
<p>takes, or agrees to the taking of, a decision by or on behalf of F as to the way in which the business of a group institution is to be carried on, or</p>
</content>
</subparagraph>
<subparagraph eId="section-36-1-a-ii">
<num>ii</num>
<content>
<p>fails to take steps that S could take to prevent such a decision being taken,</p>
</content>
</subparagraph>
</paragraph>
<paragraph eId="section-36-1-b">
<num>b</num>
<content>
<p>at the time of the decision, S is aware of a risk that the implementation of the decision may cause the failure of the group institution,</p>
</content>
</paragraph>
<paragraph eId="section-36-1-c">
<num>c</num>
<content>
<p>in all the circumstances, S's conduct in relation to the taking of the decision falls far below what could reasonably be expected of a person in S's position, and</p>
</content>
</paragraph>
<paragraph eId="section-36-1-d">
<num>d</num>
<content>
<p>the implementation of the decision causes the failure of the group institution.</p>
</content>
</paragraph>
</subsection>
<subsection eId="section-36-2">
<num>2</num>
<content>
<p>
A “
<term refersTo="#term-group-institution">group institution</term>
”, in relation to a financial institution (“F”), means F or any other financial institution that is a member of F's group for the purpose of FSMA 2000 (see section 421 of that Act).
</p>
</content>
</subsection>
<subsection eId="section-36-3">
<num>3</num>
<content>
<p>Subsections (1) and (2) are to be read with the interpretative provisions in section 37.</p>
</content>
</subsection>
<subsection eId="section-36-4">
<num>4</num>
<intro>
<p>A person guilty of an offence under this section is liable—</p>
</intro>
<paragraph eId="section-36-4-a">
<num>a</num>
<intro>
<p>on summary conviction—</p>
</intro>
<subparagraph eId="section-36-4-a-i">
<num>i</num>
<content>
<p>
in England and Wales, to imprisonment for a term not exceeding
<ins class="substitution key-75fc43aa2328ed4df5a5981ceb33bb4d-1677579713125 first last">
<noteRef href="#key-75fc43aa2328ed4df5a5981ceb33bb4d" marker="F2" class="commentary attribute F"/>
the general limit in a magistrates’ court
</ins>
(or 6 months, if the offence was committed before
<ins class="substitution key-43b258b20ce3195fc39ec5caf5a05ed0-1658396327269 first last">
<noteRef href="#key-43b258b20ce3195fc39ec5caf5a05ed0" marker="F1" class="commentary attribute F"/>
2 May 2022
</ins>
) or a fine, or both;
</p>
</content>
</subparagraph>
<subparagraph eId="section-36-4-a-ii">
<num>ii</num>
<content>
<p>in Scotland, to imprisonment for a term not exceeding 12 months or a fine not exceeding the statutory maximum, or both;</p>
</content>
</subparagraph>
<subparagraph eId="section-36-4-a-iii">
<num>iii</num>
<content>
<p>in Northern Ireland, to imprisonment for a term not exceeding 6 months or a fine not exceeding the statutory maximum, or both;</p>
</content>
</subparagraph>
</paragraph>
<paragraph eId="section-36-4-b">
<num>b</num>
<content>
<p>on conviction on indictment, to imprisonment for a term not exceeding 7 years or a fine, or both.</p>
</content>
</paragraph>
</subsection>
</section>
</hcontainer>
</part>
</portionBody>
</portion>
</akomaNtoso>