Discipline and enforcement – prohibition orders, injunctions, restitution and redress

After covering the FSA’s wide-ranging powers to conduct general and specific investigations and the challenges that may be raised to their exercise, John Virgo, barrister and Philip Ryley, solicitor turn their attention to non-disciplinary enforcement. In this article they look at the regulator’s use of prohibition orders, injunctions, restitution and redress.

Prohibition orders

One step up from the withdrawal of approval is the power vested in the Authority to prohibit those individuals from carrying out functions in relation to regulated activities who are regarded as not fit and proper to do so. Under section 56 of the Financial Services and Markets Act 2000 the Authority may make a prohibition order, prohibiting an individual from performing a specified function, any function falling within a specified description or any function at all, if it appears that the individual is not a fit and proper person to perform such function(s) in relation to a regulated activity carried on by the authorised firm. Again, the power is to be viewed as part of the panoply of regulatory tools available to assist the FSA in fulfilling its regulatory objectives of maintaining market confidence, promoting public understanding of the financial system, protecting consumers and reducing financial crime.