FCA Bans Three People From Working in Financial Services Industry, for Non-Financial Misconduct

McGuireWoods LLP

On 5 November 2020, the Financial Conduct Authority (FCA), the UK’s financial services regulator, announced that it has permanently banned three men convicted of criminal offences from ever working in the financial services industry, on the basis that they do not meet the FCA fit-and-proper-person criteria. The offences all occurred while the three men were FCA-approved persons, but the offences were not committed at, or linked to, their work. The FCA, in reaching its decisions in all three cases, noted that the men lacked the necessary integrity and reputation to work in the regulated financial services sector.

The FCA has, since its inception, had the power to ban people it does not deem fit and proper from working in the financial services sector. The fit-and-proper standard considers honesty, competence, capability and financial soundness. Whilst it is common for the FCA to use its enforcement powers in relation to financial misconduct, this latest announcement makes it clear that the FCA will consider and act on wider behaviours, including those which take place outside the regulated financial environment.

Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA, said in the 5 November announcement: “The FCA expects high standards of character, probity and fitness and properness from those who operate in the financial services industry and will take action to ensure these standards are maintained.” The FCA has previously emphasised to regulated firms that “non-financial misconduct is misconduct, plain and simple.”

Both firms and individuals employed in the financial services sector should be left in no doubt that the FCA will treat any misconduct as misconduct, even if the misconduct is not directly related to the financial services industry.

Firms are under a duty to ensure they regularly assess the conduct of their approved persons to ensure standards are met on an ongoing basis. 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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