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Watchdog to use new 'suspension' power

Published on 26 Apr 2010 under category: legal

The finance industry watchdog has released plans on how it will use its newly granted suspension power.

Suspension is to play a key role in the financial services watchdog's armoury of deterrents, according to the body's new consultation document.

The Financial Services Authority (FSA) gained the power to suspend companies under the Financial Services Act 2010.

It currently has the power to deliver fines and public notices of behaviour.

Suspension works differently from financial deterrents, according to the watchdog.

It will make public the precise cause of misconduct, because the company and the implicated individual will have to 'suspend' the activity.

In addition, its deterrent effect will be that it will immediately impact on the firm's day to day activities.

However, in applying the penalty certain factors will be taken into account.

These include the cost to employees' personal finances, potential losses during the period of suspension and the consequences for unrelated business at the same firm.

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