FCA seeks to ban regulated person for non-financial misconduct
The Financial Conduct Authority has recently published a decision notice highlighting the potential consequences of non-financial misconduct for regulated persons. Here, Charlotte Gregory and Sallyanne Caswell explore the significance of this decision.
An individual identified as JF, a financial adviser, was found guilty of attempting to meet a child following sexual grooming. As a result, the FCA considered JF was neither fit nor proper to perform any function in relation to a regulated activity. His lack of necessary integrity and reputation posed a risk to consumers and to confidence in the financial system. For his actions, JF will be banned from carrying out regulated activities.
The decision in JF’s case follows a trend in recent years, of the FCA handing out bans for non-financial misconduct. This phenomenon is fairly novel. Until the banning of three individuals for sexual offences in November 2020, the FCA did not sanction non-financial misconduct in the same way as financial misconduct (for example, misappropriation of client assets). You can read the decision notice here.
The hardened approach taken by the FCA reiterates an expectation of high standards of character from those who operate in the financial services industry. Whilst the facts of JF is mostly exceptional, in its decision, the FCA has conveyed how important it is for firms to have appropriate policies and procedures in place to handle non-financial misconduct of staff.
If you are an authorised firm and would like more information on how to ensure such policies are embedded within your business, please contact us.
