- Parliamentary Commission on Banking Standards, First Report, para 45.
- Ibid, para 7.
- The main source of confl ict is that corporate law regards the duties of directors as owed to each individual company within a group, whereas the FSMA 2000 regulatory rules for senior management—Senior Management Arrangements, Systems and Controls (SYSC)—require enior managers to manage the group as a whole.
- FSMA 2000. The relevant sanctions include: withdrawal or suspension of ‘approved person’ status (ss 63, 66); a financial penalty (s 66); or a public statement of misconduct (s 66). A prohibition order (under s 56) preventing an individual from engaging in specified regulated activities is a broader sanction that is not limited to the approved persons regime and is regarded by the FSA as a more serious penalty than withdrawal of approval.
- See FSMA 2000 s 66(2)(b).
- See FSA Handbook GEN 6.1, EG 7.8, 7.8A, 7.9. This follows the approach in company law which provides that a company may not provide an indemnity to a director in respect of a fine imposed in criminal proceedings or a penalty payable to a regulator as a result of contravention of a regulatory requirement. The FSMA 2000 prohibition is wider in its scope as it applies to all employees but it is of most relevance to directors and senior managers, who are the most likely target for FSA enforcement action.
- FSMA 2000 s 66(1)(b).
- See, for example, the transcript of oral evidence given by Peter Cummings, a former HBOS director, to the Parliamentary Commissio(www.parliament.uk/business/committees/committees-a-z/joint-select/professional-standards-in-the-banking-industry/publications/) at Q1218 responding to the question as to whether it was unfair that he was only bank director or official against whom the FSA took action in the wake of the credit crisis: “Yes, I do think it is unfair. It is unfair, and it is also seems a bit sinister. We are not the only failed bank. There are at least four or five of them, and I find it curious that I was singled out. So someone, somewhere decided that that was the appropriate action to be taken, and it is the best part of four years later, and this is the first time that I have been asked that question. I think it is sinister and curious.”
- See LFMR editorial “The FSA Board Report on RBS: Enforcement and law Reform” (January 2012).
Law and Financial Markets Review
Volume 7, 2013 - Issue 1