Section 384: Power of FCA or PRA to require restitution., Financial Services and Markets Act 2000

The appropriate regulator may exercise the power in subsection (5) if it is satisfied that an authorised person or recognised investment exchange ("the person concerned") has contravened a relevant requirement, or been knowingly concerned in the contravention of such a requirement, and—

that profits have accrued to him as a result of the contravention; or

that one or more persons have suffered loss or been otherwise adversely affected as a result of the contravention.

The FCA may exercise the power in subsection (5) if it is satisfied that—

a person ("the person concerned") has contravened Article 14 (prohibition of insider dealing and of unlawful disclosure of inside information) or Article 15 (prohibition of market manipulation) of the market abuse regulation; and

the condition mentioned in subsection (3) is fulfilled.

The condition is—

that profits have accrued to the person concerned as a result of the contravention of Article 14 or 15 of the market abuse regulation; or

that one or more persons have suffered loss or been otherwise adversely affected as a result of the contravention of Article 14 or 15 of the market abuse regulation.

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The power referred to in subsections (1) and (2) is a power to require the person concerned, in accordance with such arrangements as the regulator exercising the power ("the regulator concerned") considers appropriate, to pay to the appropriate person or distribute among the appropriate persons such amount as appears to the regulator concerned to be just having regard—

in a case within paragraph (a) of subsection (1) or (3), to the profits appearing to the regulator concerned to have accrued;

in a case within paragraph (b) of subsection (1) or (3), to the extent of the loss or other adverse effect;

in a case within paragraphs (a) and (b) of subsection (1) or (3), to the profits appearing to the regulator concerned to have accrued and to the extent of the loss or other adverse effect.

"Appropriate person" means a person appearing to the regulator concerned to be someone—

to whom the profits mentioned in paragraph (a) of subsection (1) or (3) are attributable; or

who has suffered the loss or adverse effect mentioned in paragraph (b) of subsection (1) or (3).

"Relevant requirement" means—

a requirement imposed by or under this Act or by a qualifying provision specified, or of a description specified, for the purposes of this subsection by the Treasury by order; ...

a requirement which is imposed by or under any other Act and whose contravention constitutes an offence mentioned in section 402(1) ; ...

a requirement imposed by the Alternative Investment Fund Managers Regulations 2013. and

a requirement which is imposed by Part 7 of the Financial Services Act 2012 (offences relating to financial services) and whose contravention constitutes an offence under that Part.

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The PRA is the "appropriate regulator" in the case of a contravention of—

a requirement that is imposed by the PRA under any provision of this Act,

a requirement under section 56(6) where the authorised person concerned is a PRA-authorised person and the prohibition order concerned is made by the PRA, or

a requirement under section 59(1) or (2) where the authorised person concerned is a PRA-authorised person and the approval concerned falls to be given by the PRA.

In the case of a contravention of a requirement that is imposed by a qualifying provision, "the appropriate regulator" is whichever of the PRA or the FCA (or both) is specified by the Treasury by order in relation to the qualifying provision for the purposes of this section.

In the case of a contravention of a requirement where the contravention constitutes an offence under this Act, the "appropriate regulator" is the regulator which has power to prosecute the offence (see section 401).

The FCA is the "appropriate regulator" in the case of a contravention of any other requirement.

The Treasury may by order amend the definition of "appropriate regulator".

Section 384: Power of FCA or PRA to require restitution.

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