Disciplinary Action
| Published date | 01 January 1997 |
| DOI | https://doi.org/10.1108/eb024914 |
| Pages | 92-93 |
| Date | 01 January 1997 |
| Author | Joanna Gray |
| Subject Matter | Accounting & finance |
Journal of Financial Regulation and Compliance Volume 5 Number 1
Disciplinary Action
i) On 12 July 1996, SFA issued Board
Notice 345 containing details of its disci-
plinary action against John Edmund Odell
and Branston & Gothard Ltd.
SFA commenced disciplinary proceedings
against Mr. Odell and B & G Ltd in February
1995.
Mr Odell was working for B & G Ltd.
from home on a self-employed half commis-
sion basis. He caused B & G Ltd to be in
breach of SFA Conduct of Business rules relat-
ing to discretionary management of a client's
assets including rules on over-frequent dealing,
suitability, periodic reporting.
As a result of his conduct his agreement
with B & G Ltd was terminated and he reap-
plied for individual registration giving false
and misleading information. Mr. Odell has
been expelled from SFA's Registers and
ordered to pay £3,000 costs. B & G Ltd has
agreed a settlement of proceedings against it
with SFA and has been reprimanded, fined
£10,000 and paid costs of £6,000.
ii) On 24 July SFA 1996, issued Board
Notice 349 containing details of its disci-
plinary action against Kidder Peabody
Securities Company, Messrs. Bryant and
Villon.
In December 1995 SFA instituted disciplinary
proceedings against KPSC and Messrs Bryant
and Villon, co-heads of the European Govern-
ment Bond Options Desk at KPSC. The two
individuals admitted failing to input and
update correct data into the position risk calcu-
lation computer model on the Option Desk.
KPSC admitted certain failures of management
and internal control and supervision of the
marking of position risk on the Options Desk.
SIB Principles 1 & 2 were contravened. KPSC
has been reprimanded, fined £40,000 and
ordered to pay £27,000 costs. Messrs Bryant
and Villon have been reprimanded, fined
£5,000 and £2,500 respectively and ordered
to pay costs of £3,300 and £3,000 respec-
tively.
Rule Changes
i) Effective from 1 October 1996
Amendment to the Financial (Investment Ser-
vices Directive)
Rules (details contained in SFA
Board Notice 344
12
July 1996)
The changes relate to the Financial (Investment
Services Directive) Rules in respect of Large
Exposures, and include new reporting forms
and guidance notes for completing the quar-
terly reporting of large exposures, referred to
as Large Exposures Monitoring (LEM).
ii) Effective from 1 August 1996
Client Money Rule Changes for Firms that
Hold Client Money and amendments to client
money reporting requirements, (details con-
tained in SFA. Board Notice 347
12
July 1996)
Guidance issued by SFA
On 12 July 1996 SFA issued Guidance to both
ISD and non-ISD member firms in Board
Notice 341 in order to clarify which of the
Financial rules must be applied by firms in the
calculation of Counterparty Risk Requirement
(CRR) in specific scenarios. On 1 August
1996 SFA issued Guidance to member firms in
Board Notice 350 which replaces Appendix 39
of SFA Rules and is intended to clarify and
explain the scope of the Investment Services
Directive and the
Second
Banking
Co-ordination
Directive ("2BCD") and the relationship
between the two Directives along with the
workings and effect of the ISD.
4) IMRO
Rule Change
On
12
July 1996 IMRO issued Rules Notice -
No 30 which contained rule changes effective
from 18 July 1996 consequent to the imple-
mentation of the post-BCCI Directive by the
Financial Institutions (Prudential Supervision)
Regulations 1996. They amend IMRO's rules
relating to the admission, discipline and expul-
sion of firms so as to enable to refuse admis-
sion to or terminate the membership of an
Page 92
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