C24Part V Performance of Regulated Activities
Conduct F20of approved persons
Words in cross-heading before s. 64 inserted (8.6.2010) by Financial Services Act 2010 (c. 28), ss. 24(1), 26(2)(d)(e), Sch. 2 para. 7
64 Conduct: statements and codes.
1
The Authority may issue statements of principle with respect to the conduct expected of approved persons.
2
If the Authority issues a statement of principle under subsection (1), it must also issue a code of practice for the purpose of helping to determine whether or not a person’s conduct complies with the statement of principle.
3
A code issued under subsection (2) may specify—
a
descriptions of conduct which, in the opinion of the Authority, comply with a statement of principle;
b
descriptions of conduct which, in the opinion of the Authority, do not comply with a statement of principle;
c
factors which, in the opinion of the Authority, are to be taken into account in determining whether or not a person’s conduct complies with a statement of principle.
4
The Authority may at any time alter or replace a statement or code issued under this section.
5
If a statement or code is altered or replaced, the altered or replacement statement or code must be issued by the Authority.
6
A statement or code issued under this section must be published by the Authority in the way appearing to the Authority to be best calculated to bring it to the attention of the public.
7
A code published under this section and in force at the time when any particular conduct takes place may be relied on so far as it tends to establish whether or not that conduct complies with a statement of principle.
8
Failure to comply with a statement of principle under this section does not of itself give rise to any right of action by persons affected or affect the validity of any transaction.
9
A person is not to be taken to have failed to comply with a statement of principle if he shows that, at the time of the alleged failure, it or its associated code of practice had not been published.
10
The Authority must, without delay, give the Treasury a copy of any statement or code which it publishes under this section.
11
The power under this section to issue statements of principle and codes of practice—
a
includes power to make different provision in relation to persons, cases or circumstances of different descriptions; and
b
is to be treated for the purposes of section 2(4)(a) as part of the Authority’s rule-making functions.
12
The Authority may charge a reasonable fee for providing a person with a copy of a statement or code published under this section.
13
“Approved person” means a person in relation to whom the Authority has given its approval under section 59.
C1C265 Statements and codes: procedure.
1
Before issuing a statement or code under section 64, the Authority must publish a draft of it in the way appearing to the Authority to be best calculated to bring it to the attention of the public.
2
The draft must be accompanied by —
a
a cost benefit analysis; and
b
notice that representations about the proposal may be made to the Authority within a specified time.
3
Before issuing the proposed statement or code, the Authority must have regard to any representations made to it in accordance with subsection (2)(b).
4
If the Authority issues the proposed statement or code it must publish an account, in general terms, of—
a
the representations made to it in accordance with subsection (2)(b); and
b
its response to them.
5
If the statement or code differs from the draft published under subsection (1) in a way which is, in the opinion of the Authority, significant—
a
the Authority must (in addition to complying with subsection (4)) publish details of the difference; and
b
those details must be accompanied by a cost benefit analysis.
6
Neither subsection (2)(a) nor subsection (5)(b) applies if the Authority considers—
a
that, making the appropriate comparison, there will be no increase in costs; or
b
that, making that comparison, there will be an increase in costs but the increase will be of minimal significance.
7
Subsections (1) to (6) do not apply if the Authority considers that the delay involved in complying with them would prejudice the interests of consumers.
8
A statement or code must state that it is issued under section 64.
9
The Authority may charge a reasonable fee for providing a copy of a draft published under subsection (1).
10
This section also applies to a proposal to alter or replace a statement or code.
11
“Cost benefit analysis” means an estimate of the costs together with an analysis of the benefits that will arise—
a
if the proposed statement or code is issued; or
b
if subsection (5)(b) applies, from the statement or code that has been issued.
12
“The appropriate comparison” means—
a
in relation to subsection (2)(a), a comparison between the overall position if the statement or code is issued and the overall position if it is not issued;
b
in relation to subsection (5)(b), a comparison between the overall position after the issuing of the statement or code and the overall position before it was issued.
C3C4C5C666 Disciplinary powers.
1
The Authority may take action against a person under this section if—
a
it appears to the Authority that he is guilty of misconduct; and
b
the Authority is satisfied that it is appropriate in all the circumstances to take action against him.
2
A person is guilty of misconduct if, while an approved person—
a
he has failed to comply with a statement of principle issued under section 64; or
b
he has been knowingly concerned in a contravention by the relevant authorised person of a requirement imposed on that authorised person by or under this Act F1or by any directly applicable Community regulation F2or decision made under the markets in financial instruments directiveF3or the UCITS directiveF21or by the emission allowance auctioning regulation.
3
If the Authority is entitled to take action under this section against a person, F4it may do one or more of the following——
C7a
impose a penalty on him of such amount as it considers appropriate;
F5aa
suspend, for such period as it considers appropriate, any approval of the performance by him of any function to which the approval relates;
ab
impose, for such period as it considers appropriate, such limitations or other restrictions in relation to the performance by him of any function to which any approval relates as it considers appropriate; or
b
publish a statement of his misconduct.
F63A
The period for which a suspension or restriction is to have effect may not exceed two years.
3B
A suspension or restriction may have effect in relation to part of a function.
3C
A restriction may, in particular, be imposed so as to require any person to take, or refrain from taking, specified action.
3D
The Authority may—
a
withdraw a suspension or restriction; or
b
vary a suspension or restriction so as to reduce the period for which it has effect or otherwise to limit its effect.
4
The Authority may not take action under this section after the end of the period of F7three years beginning with the first day on which the Authority knew of the misconduct, unless proceedings in respect of it against the person concerned were begun before the end of that period.
5
For the purposes of subsection (4)—
a
the Authority is to be treated as knowing of misconduct if it has information from which the misconduct can reasonably be inferred; and
b
proceedings against a person in respect of misconduct are to be treated as begun when a warning notice is given to him under section 67(1).
F85A
Approval” means an approval given under section 59.
6
“Approved person” has the same meaning as in section 64.
7
“Relevant authorised person”, in relation to an approved person, means the person on whose application approval F9. . . was given.
F108
In relation to any time while a suspension is in force under subsection (3)(aa) in relation to part of a function, any reference in section 59 or 63A to the performance of a function includes the performance of part of a function.
9
If at any time a restriction imposed under subsection (3)(ab) is contravened, the approval in relation to the person concerned is to be treated for the purposes of sections 59 and 63A as if it had been withdrawn at that time.
C8C9C10C1167 Disciplinary measures: procedure and right to refer to Tribunal.
1
If the Authority proposes to take action against a person under section 66, it must give him a warning noticeF11; and if it proposes to take action under subsection (3)(aa) or (ab) of that section, it must also give each of the other interested parties a warning notice.
2
A warning notice about a proposal to impose a penalty must state the amount of the penalty.
F122A
A warning notice about a proposal—
a
to suspend an approval, or
b
to impose a restriction in relation to the performance of a function,
must state the period for which the suspension or restriction is to have effect.
3
A warning notice about a proposal to publish a statement must set out the terms of the statement.
C124
If the Authority decides to take action against a person under section 66, it must give him a decision noticeF13; and if it decides to take action under subsection (3)(aa) or (ab) of that section, it must also give each of the other interested parties a decision notice.
5
A decision notice about the imposition of a penalty must state the amount of the penalty.
F145A
A decision notice about—
a
the suspension of an approval, or
b
the imposition of a restriction in relation to the performance of a function,
must state the period for which the suspension or restriction is to have effect.
6
A decision notice about the publication of a statement must set out the terms of the statement.
7
If the Authority decides to take action against a person under section 66, he may refer the matter to the TribunalF15; and if the Authority decides to take action under section 66(3)(aa) or (ab), each of the other interested parties may also refer the matter to the Tribunal.
F168
Approval” means an approval given under section 59.
9
“Other interested parties”, in relation to an approved person (“A”), are—
a
the person on whose application the approval was given (“B”); and
b
the person by whom A's services are retained, if not B.
The reference in this subsection to an approved person has the same meaning as in section 64.
C13C14C1568 Publication.
After a statement under section 66 is published, the Authority must send a copy of it to the person concerned and to any person to whom a copy of the decision notice was given.
C16C17C18C1969 Statement of policy.
1
The Authority must prepare and issue a statement of its policy with respect to—
F17a
the imposition of penalties, suspensions or restrictions under section 66;
b
the amount of penalties under that section; and
c
the period for which suspensions or restrictions under that section are to have effect.
2
The Authority’s policy in determining what the amount of a penalty should be F18, or what the period for which a suspension or restriction is to have effect should be, must include having regard to—
a
the seriousness of the misconduct in question in relation to the nature of the principle or requirement concerned;
b
the extent to which that misconduct was deliberate or reckless; and
c
whether F19the person against whom action is to be taken is an individual.
3
The Authority may at any time alter or replace a statement issued under this section.
4
If a statement issued under this section is altered or replaced, the Authority must issue the altered or replacement statement.
5
The Authority must, without delay, give the Treasury a copy of any statement which it publishes under this section.
6
A statement issued under this section must be published by the Authority in the way appearing to the Authority to be best calculated to bring it to the attention of the public.
7
The Authority may charge a reasonable fee for providing a person with a copy of the statement.
8
In exercising, or deciding whether to exercise, its power under section 66 in the case of any particular misconduct, the Authority must have regard to any statement of policy published under this section and in force at the time when the misconduct in question occurred.
C20C21C22C2370 Statements of policy: procedure.
1
Before issuing a statement under section 69, the Authority must publish a draft of the proposed statement in the way appearing to the Authority to be best calculated to bring it to the attention of the public.
2
The draft must be accompanied by notice that representations about the proposal may be made to the Authority within a specified time.
3
Before issuing the proposed statement, the Authority must have regard to any representations made to it in accordance with subsection (2).
4
If the Authority issues the proposed statement it must publish an account, in general terms, of—
a
the representations made to it in accordance with subsection (2); and
b
its response to them.
5
If the statement differs from the draft published under subsection (1) in a way which is, in the opinion of the Authority, significant, the Authority must (in addition to complying with subsection (4)) publish details of the difference.
6
The Authority may charge a reasonable fee for providing a person with a copy of a draft published under subsection (1).
7
This section also applies to a proposal to alter or replace a statement.
Pt. V (ss. 56-71) modified (1.12.2001) by S.I. 2001/3592, arts. 1(2), 114(3)(a), 128(3)(a) (with art. 23(2))