The FCA has published its regulation round-up for November 2015. A ‘hot topic’ in the round-up is the FCA’s use of its restriction and suspension powers in an enforcement context. Points of interest include:
- The FCA will use its restrictions and suspensions in enforcement actions where they are considered to be more effective than financial penalties in changing behaviour
- The FCA uses its powers to restrict or suspend authorised firms as a disciplinary sanction, primarily for deterrence, rather than a proactive measure for addressing the harm caused by a breach
- Previous enforcement actions show that the FCA is able to impose a restriction or suspension, either together with a financial penalty, or as an alternative sanction if a financial penalty would cause serious financial hardship
Another ‘hot topic’ relates to firms applying to operate an electronic platform in relation to lending. The FCA explains that of the 185 firms registered for interim permission for P2P activities, only 42 firms will apply for authorisation for P2P activities. This is because many of the firms don’t actually offer P2P services, the FCA expects the other 143 firms with interim permission to apply for other consumer credit permissions that better reflect the services they offer.
The FCA makes clear, that despite some media reports, the decrease is not due to P2P firms leaving the market. It is about firms understanding which permissions are right for them and applying for the permissions that are best for their business model. The FCA has not yet refused authorisation for any P2P firm, whether they held interim permission or were new to the market.