RCB 4 Enforcement powers

This chapter contains guidance for issuers, and owners and other persons subject to the RCB Regulations.

The purpose of this chapter is to give guidance on the FCA's approach to the use of its enforcement powers under the RCB Regulations and to set out the FCA's policy on the imposition and amount of financial penalties.

The FCA's approach to the exercise of its enforcement powers will be consistent with its approach in DEPP and ENFG so far as appropriate.

The FCA's exercise of its powers under the RCB Regulations is without prejudice to the use of its powers under the Act or under other legislation.

1. (1)

   When deciding whether to take enforcement action under Part 7 of the RCB Regulations, and what form that enforcement action should take, the FCA will consider all relevant factors, including:

   1. (a)

      the relevant factors on decisions to take action set out in DEPP 6.2.1 G;

   2. (b)

      whether any contractual or other arrangements agreed between the parties can be used effectively to address any perceived failure under the RCB Regulations; and

   3. (c)

      the interests of investors in the relevant regulated covered bond.

2. (2)

   The FCA does not normally expect to use its enforcement powers where the issuer or the owner are in the process of rectifying non-compliance and where they have taken account of the views and interests of investors in the regulated covered bond. This is without prejudice to the FCA's use of its enforcement powers as a result of its consideration of all relevant factors, as set out in RCB 4.2.3 G (1).

The FCA's policy on imposing financial penalties (including the amount of any such penalties) under the RCB Regulations will be consistent with the policy as set out in DEPP with appropriate modifications.

When considering whether to impose a financial penalty, the amount of penalty, and whether to impose the penalty on the issuer or the owner, the FCA will have regard, where relevant, to:

1. (1)

   the statement on determining the appropriate level of a financial penalty set out in DEPP 6.5 to DEPP 6.5D;

2. (2)

   the particular arrangements between the issuer and the owner;

3. (3)

   the likely impact of the penalty on the interests of investors in a regulated covered bond; and

4. (4)

   the conduct of the issuer or the owner.