Disciplinary action
If the FSA considers that its rules have been broken then it can then take disciplinary action which can include,
- Public announcements
- Fines
- Conditions on future business
- Obtaining a court injunction
- Ordering compensation for customers
- Withdrawing authorisation
- Prohibiting any individual from carrying out regulated activities.
Because of registration of individuals who perform controlled functions or act as controllers, then disciplinary action can be taken against individuals.
Appeals can be made to the Financial Services and Markets Tribunal.
Firms are not allowed to take out insurance to pay FSA fines or penalties.
Authorisation
Under section 19 of the FSMA 2000 it is an offence to carry on a regulated activity unless the person is exempt or authorised by the FSA. This is called the general prohibition.
Authorisation is given by the FSA under set areas of ‘permission’. Each firm must be authorised in the permission area in which is wishes to carry on a regulated activity.
Changes or extensions in permission areas require further FSA authorisation.
Previously authorised firms
Firms previously authorised under past acts are grandfathered in and regarded as authorised by the FSA. Previous acts examples include,
- Banking act 1987,
- Insurance Companies Act 1982,
Professional firms previously authorised by recognised professional body (RPB) under the Financial Services Act 1986 were not grandfathered in. These firms do not need authorisation for regulated activities which are incidental to their professional services. As an example a solicitor would not need to be authorised to assist a client in making a claim under the life insurance policy. However authorisation would be required if the same solicitor wanted to start selling life insurance.