The Financial Services Authority (FSA), the UK's principal financial watchdog, has seen a rise in the average amount of fines it levied last year amid reports that it wants to impose harsher penalties still.
The Financial Times newspaper reports that the FSA wants to engender the same respect served to the Securities and Exchange Commission in the US, and the body apparently sees tougher penalties as one way to achieve this.
The FSA levied GBP17.43 million in financial penalties during the year. Of this, GBP14 million was paid by Citigroup Global Markets and GBP3.5 million by 16 other individuals or companies. In 2004/05, the total was GBP22.25 million, of which GBP17 million was paid by the Shell Transport and Trading Company and GBP5.25 million by 30 firms or individuals.
However, while the total in fines was lower than 2005, the average fine levied by the FSA rose by 23% to GBP216,800 this year.
The past year has been one of continuity for the FSA. The economic environment in which we operate has continued to be benign; there have, I am glad to say, been no major changes to the FSA’s responsibilities; and, as a consequence, we have been able to deal steadily with the many tasks which fall to us, says the FSA’s chairman Callum McCarthy.
However the UK government has recently announced a review of the FSA’s first five years in operation, triggering speculation that ministers are unhappy with its performance following some high profile reverses, such as the split cap scandal and the Equitable Life mis-selling saga.
We are, of course, determined to be fair as well as proportionate in our regulation, Mr McCarthy adds. The review of the FSA’s enforcement procedures we completed last year shows that when we recognize failures in our processes we will seek to remedy them.