FSA - quick query

Sally_A

We've heard of them fining companies for millions for mis-selling, or not handling their procedures correctly.

As a matter of interest, who does the fine payment go to?

Now FSA admits they screwed up on monitoring RBS, will they get fined? if so, who will get the money?

dunstonh

As a matter of interest, who does the fine payment go to?

Redecorating Canary Wharf and the Christmas party

ACG

Does it not go into a big pot (so to speak). Then its there to pay out under the FSCS?

I dont actually know the answer, im as intrigued as you are now. But i imagine some of it probably goes in someones back pocket (as a bonus) or to pay for the xmas do.

Annisele

The fines go into the FSA's pot, and are used to reduce the levy for other firms.

From page 71 of its business plan

Applying financial penalties

Under the Financial Services and Markets Act 2000 (FSMA) we are required to ensure that financial penalties are applied for the benefit of authorised persons, or (in the case of Listing rules breaches) issuers of listed securities. The benefit is applied through discounts to our fees.

The Financial Penalty Discount (FPD) is applied to the fee-block(s) paying the
enforcement costs of a case. Then any financial penalties in excess of the cost of a case are applied as follows:

Across all ‘A’ fee blocks, in the case of: breaches by authorised persons; market abuse by neither authorised nor approved persons; and market abuse by an authorised or approved person.

To the benefit of securities issuers only (fee block E), in cases of breaches under the Listing rules.

The FPDs are distributed across fee-blocks in proportion to the AFR recovered in the year that the FPD is being applied, which is the financial year after we receive the financial penalty. In all instances the offending firm is excluded from benefiting from the fees discount (unless the value of the individual discount is less
than £250).

The value of financial penalties collected,as of the end of January 2011, was £79.1m. When rebated to firms this equates to a discount of 16% to the 2011/12 fees. This compares with financial penalties collected in 2009/10 of £33.2m, equating to a 7% discount to the 2010/11 fees. On this basis the net periodic fees for 2011/12 would be £421.4m – representing no increase to the actual net cost to firms.

Probably far more than you ever wanted to know!

Sally_A

Thanks Annisele, so if the FSA get fined for incompetence over RBS, who fines them, and where does the money go - other than some fat cat lawyer stretching it out as long as possible.

Or are the FSA untouchable?

Can't remember who said it, but it was along the lines of "Who audits the auditors?"

rs65

Sally_A wrote: »

Or are the FSA untouchable?

They are a company owned by the government so ultimately they answer to parliament.

They are not regulated by themselves.

ACG

The FSA are going soon anyway, to be replaced by the FCA. So probably not a lot will happen???

dunstonh

ACG wrote: »

The FSA are going soon anyway, to be replaced by the FCA. So probably not a lot will happen???

What is the difference between the PIA, the FSA and the FCA?

Whatever your printer charges you for changing the letters on your stationery

kingstreet

I'm sure of one thing. The FCA will be staffed by ex-bankers just like the FSA, earn nice bonuses just like the FSA and will cost at least £50m a year more than the FSA.

And guess who picks up the tab?

ACG

True, it will probably be the same staff with a different title and new business cards, it would be a huge waste of money to make them all redundant...and then re-employ the same people...im sure theyre not THAT daft?. Some things will change, hopefully for the better.