02 Aug 2013 | 03:39 pm |
The FCA has 'written off' over £10m in 'discounts' on penalties for financial services which have broken rules, according to an analysis by international law firm Pinsent Masons.
Since its inception on 1 April, the FCA has published around 30 enforcement notices, of which almost a quarter have allowed for a discount on the penalty levied.
Discounts are typically applied where the business under scrutiny accepts some degree of wrongdoing at an early stage in order to secure a speedier resolution.
Although this type of early settlement typically reduces enforcement costs for the City watchdog, they have been controversial in the past.
In February this year the Treasury Select Committee said that regulators should be prepared to take a tougher line in settlements with banks found to have broken the rules.
Over recent months financial institutions including JP Morgan and Swinton have been granted discounts of 30% for compliance with regulatory investigations. In total £10,049,549 has been written off as a result.
Monica Gogna, a regulatory expert in the Financial Services group at international law firm Pinsent Masons, says:
"The discounting regime is an effective way of incentivizing regulated businesses to comply with investigations. People may be surprised by the £10m figure though, and will be watching carefully to see whether the recent run of discounts is a 'flurry' or a more subtle shift in FCA policy."
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