Senior managers and discipline
| Pages | 284-289 |
| Date | 01 September 2002 |
| DOI | https://doi.org/10.1108/13581980210810274 |
| Published date | 01 September 2002 |
| Author | Philip Ryley,John Virgo |
| Subject Matter | Accounting & finance |
Senior managers and discipline
Philip Ryley* and John Virgo
Received: 22nd April, 2002
*Head of Compliance and Training Consultancy, TLT Solicitors, One Redcliff Street, Bristol BS99
7JZ, UK; tel: +44 (0)117 917 7777; fax: +44 (0)117 917 7778; e-mail: pryley@tltsolicitors.com
Philip Ryley is an associate and head of
the compliance and training consultancy at
TLT Solicitors, Bristol and specialises in
financial services, general insurance and
mortgage regulation, including supervision
and enforcement issues.
John Virgo is a barrister specialising in
financial services law and regulatory
issues. Both are Associates of the Compli-
ance Institute and represent authorised
firms and individuals in disciplinary
actions.
ABSTRACT
(the Act) establishes extensive investigative
powers and disciplinary powers that may be
exercised by the Financial Services Authority
(FSA) in certain circumstances. The Act
further empowers the FSA to take disciplinary
action against approved persons, as well as
authorised firms. This paper examines the cir-
cumstances in which senior managers may find
themselves personally culpable for regulatory
breaches and become the subject of disciplinary
proceedings.
INTRODUCTION
The power to take disciplinary action
against individuals is not a new concept.
The Personal Investment Authority (PIA)
Rules (Rule 10.1.3) empowered the PIA
to:
— discipline a registered individual if it
was satisfied that there was evidence to
show that the registered individual had
failed to comply with any of the PIA
requirements
— impose stipulations upon the registra-
tion of that individual or terminate the
registration in circumstances where the
individual was deemed no longer fit
and proper to perform the functions for
which he was registered
— order a public reprimand, impose a
fine, issue stipulations, terminate regis-
tration and order the individual to pay
costs.
Similar disciplinary powers were available
to the Securities and Futures Authority
(SFA) (Rule 7.23A) and Investment Man-
agement Regulatory Organisation
(IMRO) (Rule 4.6(4)). Unlike the self-reg-
ulatory organisations (SROs), however,
the FSA’s power to discipline is not based
upon any contractual right or undertaking
but is now statutorily based in the Financial
Services and Markets Act 2000 (the Act).
Also, whereas the focus of disciplinary
power was formerly in securing compli-
ance with the various SRO rules, the Act
effectively creates a positive obligation on
the part of the senior managers of an
authorised firm competently to manage the
firm’s business. The Act also creates an
independent disciplinary tribunal in the
name of the Financial Services and Markets
Tribunal (the Tribunal), appointed and
administered by the Lord Chancellor’s
Journal of Financial Regulation
and Compliance, Vol. 10, No. 3,
2002, pp. 284–289
#Henry Stewart Publications,
1358–1988
Journal of Financial Regulation and Compliance Volume 10 Number 3
Page 284
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