Overview

For all the talk in CP09/19 and CP09/19 about introducing more transparency and consistency to the penalty-setting process, the FSA retains for itself a remarkable degree of flexibility. While there are elements of objectivity built into the new framework, many aspects will remain to be assessed at the discretion of the regulator – and the credible deterrence strategy is undoubtedly leading the way. The one thing that is predictable is that penalties will rise – substantially so in cases where the FSA wants to send a strong message to firms and individuals.

The new regime, which involves wholesale changes to the Decision Procedure and Penalties manual ("DEPP"), comes into effect almost immediately and will apply to any enforcement action taken in relation to breaches occurring on or after 6 March 2010. When a breach begins before 6 March 2010 and continues after that date, the pre-existing penalty regime will apply to conduct before that date and the new penalties regime will apply to conduct from that date onwards.

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