Regulator demands more cooperation on enforcement
The UK's financial regulator will take a dim view of companies that respond in a legalistic way to its investigations, threatening exemplary sanctions against those that don't cooperate fully.
The enforcement division at the UK?s financial markets regulator is changing its approach under the uncompromising stewardship of its director, Andrew Procter.
The 220-man team at the Financial Services Authority that Procter heads will no longer put up with ill-informed or uninterested management who see a regulatory investigation as a purely legal matter.
Companies that fail to cooperate fully with the FSA will face increasingly hefty fines, while those that are prepared to take seriously findings about internal controls or disclosure systems and take immediate remedial action will be handed down much more modest penalties.
This means board-level involvement right from the start and a willingness among senior executives to dedicate time and brainpower to an area that was previously the preserve of lawyers and other advisers.
Going beyond the statute
?We expect chief executives to do more than what is required of them by the statute. We expect them to be cooperative in a proactive way,? says Procter. ?We expect them to identify solutions and we expect them to identify compensation arrangements. We don?t expect them to sit back and wait for us to tell them what to do. This is not a criticism of general counsel or heads of legal at all, just a recognition that quite often what is at stake is wider than just legal issues.?