City watchdog plans much harsher penalties

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The Independent Online
THE WATCHDOG responsible for City of London traders yesterday unveiled plans to introduce far stiffer penalties for breaches of its rules. If the proposals from the Securities and Futures Authority (SFA) are accepted, penalties for firms that fall foul of the regulator could increase fourfold.

Individuals who breach SFA rules could find themselves with double the penalties they could expect to receive under the current regime.

The SFA says also it wants to "foster the notion that good compliance is good business" and is proposing that fines be reduced, or even waived altogether, if firms have good compliance procedures and notify the SFA of any breaches.

The watchdog said: "If a firm with adequate controls discovers an issue in a timely way and promptly informs the SFA, giving the full facts together with a proposed course of remedial action - including compensation where necessary - disciplinary action will be very much less likely."

The SFA proposals, released yesterday, listed additional factors that it believes should be taken into consideration when setting fines. These include the number of rule breaches, the time scale over which the breaches occurred, whether there was widespread wrongdoing throughout the firm and the means of the firm in question to pay fines.

Firms have until 30 April to respond.

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