MLR1PP7150 - penalties guidance: suspension of the penalty framework

The penalty framework is intended to ensure that we meet the objectives for civil penalties under the Regulations. The penalty framework will be used for most regulatory breaches.

There is however no obligation on us to use this framework and it can be suspended in certain circumstances such as the following:

  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • the business has failed to co-operate with us and has not provided sufficient information to enable the use of the penalty framework or it has not been possible to make a determination of any relevant details
  • the regulatory breaches are systemic or deliberate and we have reason to believe that the level of the penalty calculated using the penalty framework will not be dissuasive. Under these circumstances consideration should first be given as to whether a criminal investigation or withdrawal of fit and proper status, and cancellation of registration is the appropriate course of action
  • an MSB/HVD has a turnover of less than £50,000 so the penalty has been capped at the £5,000 fixed starting penalty but penalties set at this level have failed to improve compliance so a more severe penalty is appropriate. Under these circumstances consideration should again first be given as to whether a criminal investigation or withdrawal of fit and proper status and cancellation of registration is the appropriate course of action (for MSBs).
  • an ASP/TCSP/EAB has a small number of significant clients who pay high fees. The penalty framework may produce a penalty which is too low and which is therefore not proportionate or dissuasive.
  • there may be special circumstances when due to the complexity of a specific process or events we recognise that a standard fixed penalty of less than would be set by the penalty framework will be more appropriate

(This content has been withheld because of exemptions in the Freedom of Information Act 2000) MLR1PP7160(This content has been withheld because of exemptions in the Freedom of Information Act 2000)