Context
The FCA has published details of how its Financial Penalty Scheme works, and how it uses retained penalties for the benefit of firms, in a new webpage. It has also updated its Enforcement webpage to reference the Scheme and provide a link to the new page.
Key points to note and next actions
Under the Financial Services Act 2012, the FCA must pay the financial penalties it receives from firms and individuals to the Treasury, except to the extent they equal certain defined enforcement costs (retained penalties). The Financial Penalty Scheme sets out how retained penalties are used for the benefit of other firms.
Retained penalties are used to provide a rebate for firms, in respect of the FCA’s periodic fees, in the financial year following the year the financial penalties were received. With the rebate being split by fee-block and any available discount being applied to the firms that were not subject to enforcement.
Each year the FCA publish a schedule in the annual fee rates Consultation Paper, setting out the:
- total retained penalties in the previous financial year
- amount of retained penalties allocated to each fee-block, and
- percentage rebate that will be applied in the following financial year to the periodic fees paid by the firms in those fee-blocks