The FCA has given firms over £10m worth of discounts on penalties in the past four months, according to research by Pinsent Masons.
Discounts are usually applied when a business being investigated for wrongdoing accepts responsibility early to secure a speedy resolution.
Since the regulator’s inception on 1 April, it has published around 30 enforcement notices. Almost one in four have applied a discount on the fine. A similar discount system was applied by the FSA.
Pinsent Masons financial services regulation partner Monica Gogna says: “The discounting regime is an effective way of incentivising regulated businesses to comply with investigations. People may be surprised by the £10m figure though and will be watching carefully to see whether the recent run of discounts is a ‘flurry’ or a more subtle shift in FCA policy.”
The second biggest discount was applied to an £8,616,000 handed to Sesame Bankhall Group in May. The £2,584,800 discount reduced this fine levied to £6,031200.
An FCA spokesman says: “Investigations take time and can be costly, so the discount system encourages firms to comply with our investigations and settle early. As well as providing savings to firms or individuals being investigated as well as the FCA, it also means compensations, where it is due, can be paid out earlier than would otherwise be the case.”
|Firm||Original Fine||Discount Rate||Actual Fine||Cash Difference|
|Sesame Bankhall Group||£8,616,000||30%||£6,031,200||£2,584,800|
|Royal Bank of Scotland||£5,029,137||30%||£3,520,395.90p||£1,508,741.10p|
|Policy Administration Services||£4,049,637||30%||£2,834,745.90p||£1,214,891.10p|