FSA and stiffer penalties to individuals Essay Example | Topics and Well Written Essays - 3000 words

FSA and stiffer penalties to individuals - Essay ExampleFSA in addition protects consumers by step-down monetary crimes in the financial commercializes (Davidson 2010). In the past few weeks, FSA has imposed heavy penalties on individuals for regulatory breaches. FSA has been much more efficient in ensuring prosecution of individuals who breach regulatory requirements. FSA has implemented a brand-new policy that is aimed at deterring financial crimes through imposing penalties that reflect the magnitude of the regulatory breach, or financial scandal (Pettet 2001). The recent penalties are based on numerous factors including the need to achieve an appropriate bullying effect and removal of any profits that may have accrued due to the regulatory breach. FSA has also considered the mitigating and aggravating factors and need to apply any settlement discount in imposing the high penalties (Davidson 2010). of import legal aspects of the cases The monetary Services and Markets Act 2000 and Market Abuse regulations of 2005 mainly deal with insider traffic and commercialise price manipulation misconducts. The criminal offense must occur in the prescribed markets. The prescribed markets embarrass the markets governed by UK recognized investment exchanges (RIE) and other markets in the EEA countries. Some of the financial markets in the UK, where such(prenominal) market insult occur include ICE futures, London stock exchange and London Metal exchange limited. other markets include the NYMEX Europe limited and EDX London Ltd (Davidson 2010). The qualifying investments that are governed by FSA market abuse regulations include the transferable securities like shares, securitized debts and bonds that are correct by the ISD directive. Other securities include the forward interest agreements, notes and interest rate swaps, future contracts and derivative securities. Firms are required to report any suspect dealings and implement adequate internal control and co mpliance mechanisms (Davidson 2010). FSA has the powers to deal with misconduct that is not necessarily market abuse but that breach the guiding principles of FSA. Sections 401 and 402 allow FSA to prosecute various financial markets offenses under the Financial Services and Markets Act of 2000 and any other relevant legislation (Pettet 2001). Some offenses include offering securities for change to the public without publishing a prospectus since FSA listing requirements under Section 85(2) require the issuer to provide a prospectus before the actual listing. Section 397 of the Act prohibits firms and individuals from making fraudulent and misleading statements and manipulating the market basic principle (Pettet 2001). Insider dealing is one of the criminal offenses that have led to high penalties to individuals. Insider trading is a criminal offence if the individual transacts the securities with inside information, or encourages another person to transact in the securities while in stubbornness of inside information that is not available to other market participants (Davidson 2010). If the insider avails information to a market impostor other than in the ordinary performance of his duties or employment, FSA will consider such act as criminal insider dealing. Section 52(3) outlines that the above offenses are committed when dealing with a security in the regulated market or where transactions of price affected securities are executed by an individual use the inside information or are conducted by a professional intermediary using such inside