UK Offence Report

Misleading the FCA or PRA

paragraph 16(3) of SCHEDULE 1 of The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017

This offence was read from the text as made, and no revised version was available, so a later revocation could not be ruled out. Check the current text at legislation.gov.uk.

What the provision says

3 A person who contravenes sub-paragraph (1) or (2) is guilty of an offence.

Text as made, from legislation.gov.uk. © Crown copyright, reused under the Open Government Licence v3.0. This is the text as originally made; later amendments are not shown here.

Who it binds, and what has to be proved

Binds
a person
Conduct
contravening a requirement of the instrument
Fault element
Strict liability
Burden of proof
No statutory defence — prosecution proves everything

The prosecution must prove that the conduct happened. This is a strict liability offence as drafted: the provision uses no word of intention, knowledge, recklessness or negligence, so there is no need to show that a person meant to do it, knew about it, or was careless.

Intention, knowledge and carelessness are irrelevant to guilt. They may still matter a great deal to sentence.

The provision states no defence, so the prosecution bears the burden on every element of the offence.

Classifier’s reasoning: no word of intention, knowledge, recklessness or negligence in the offence or its provision.

What would breach paragraph 16(3) of SCHEDULE 1?

These are illustrations, not law. They are generated from the provision’s own words to show the shape of the offence. Whether any particular conduct is caught depends on the full text, on any amendment since, and on the facts.

  1. On these words an offence is committed where a person contravenes sub-paragraph (1) or (2).
  2. Doing the thing the provision prohibits under the Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017, whatever the reason for doing it.
  3. Where the requirement is a positive duty, letting the time for performing it pass without performing it.

Penalty

Mode of trial
Either way — magistrates’ court or Crown Court
Maximum fine
Unlimited
Maximum prison (summary)
Not determined

expressed as the statutory maximum (the prescribed sum): the same words mean £5,000 in England and Wales and £10,000 in Scotland.

Sentencing

Offences of this kind are usually sentenced under the guidelines below. This is a mapping by subject, not a finding about this provision, and the links go to a search of the Sentencing Council’s own site.

Prosecution figures

No published per-offence figure was found for this provision, and it could not be matched to a Ministry of Justice offence code. Offences created by statutory instrument very largely do not have one. Absence of a figure is not evidence that the offence is unused.

Status and lifecycle

Current status
Status not determined
Made
21 June 2017
In force from
Not determined
Extent
Not stated

How this was established: read from the text as made; no revised version available, so later revocation could not be ruled out.

What the instrument is for

(This note is not part of the Regulations) — the explanatory note published with the instrument, © Crown copyright.

These Regulations implement parts of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments (recast) (OJ L173, 12/6/2014 p.349) (“MiFID II”) and Regulation (EU) No 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments (OJ L173, 12/06/2014 p.84) (“MiFIR”). MiFID II and MiFIR together replace Directive 2004/39/EC on markets in financial instruments (OJ L145, 30/04/2004 p.1) (“MiFID I”). Part 1 of these Regulations designates the Financial Conduct Authority (“FCA”), the Prudential Regulation Authority (“PRA”), and the Bank of England as the competent authorities in the United Kingdom responsible for carrying out the duties of competent authorities under Titles I to IV, VI and VII of MiFID and under MiFIR. Chapter 1 of Part 2 of the Regulations permits investment firms authorised in the United Kingdom to apply to be treated as being exempt from the requirements of MiFID II (subject to certain conditions). This Chapter implements Article 3 of MiFID II, which allows Member States to choose not to apply the Directive to certain types of firm for which they are the home Member State. Chapter 2 of Part 2 of these Regulations contains provisions concerning the status and supervision of third country (non-EU) firms providing investment services to the United Kingdom. These provisions give effect to Title VIII of MiFIR, which regulates how such firms may access the EU. Part 3 of these Regulations gives the FCA powers to put in place limits on the size of a position a person can hold in commodity derivatives, sets out the procedure for doing so (including ESMA’s role), and gives the FCA powers to supervise the position limits regime. Part 3 also requires persons in the United Kingdom to obey limits set by the competent authorities of other EEA States acting for the purposes of MiFID II. Part 3 implements Article 57 of MiFID II which creates an EU wide regime on position limits. Part 4 of these Regulations imposes controls relating to algorithmic trading etc. on certain firms and individuals, such as insurance undertakings, that are otherwise exempt from MiFID II. Part 4 implements Article 1.5 MiFID II, which applies Article 17 and 50 MiFID II to individuals and firms that are otherwise exempt from the directive. Part 5 gives the FCA and the PRA powers to remove a person from the management board of an investment firm, credit institution, or recognised investment exchange, for the purposes of MiFID II in order to implement Article 69.2(u) of MiFID II. Part 6 confers miscellaneous functions on the FCA for the purposes of MiFID II and MiFIR. These include duties to provide information to ESMA and the competent authorities of other EEA States and to authorise members of the management bodies of recognised investment exchanges to hold additional non-executive directorships (where there is a limitation on the number that can be held). The FCA are also given powers to direct the form in which various applications, reports, and notifications under MiFID II and MiFID are to be made to the FCA. Part 7 deals with refunds of Gambling Commission fees due to changes resulting from the Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2017 (S.I. 2017/488) (this Order also implements parts of MiFID II), introduces the Schedule to the Regulations, and imposes a requirement on the Treasury to review these Regulations within five years. Schedule 1 to these Regulations contains provisions on the administration and enforcement of these Regulations. Schedules 2 to 5 contain amendments to the Act, secondary legislation made under the Act, other primary legislation, and other secondary legislation. These amendments firstly implement various provisions of MiFID II via changes to existing legislation. The amendments also make consequential changes to primary and secondary legislation resulting from the replacement of MiFID I by MiFID 2 and MiFIR. There are also minor amendments to section 853E(6) of the Companies Act 2006 (c.46) and the Financial Services and Markets Act 2000 (Disclosure of Confidential Information) Regulations 2001 (S.I. 2001/2188) relating to the implementation of Regulation (EU) No 596/2014 of the European Council and of the Parliament of 16 April 2014 on market abuse (OJ No L 173 12/06/2014 p.1). A transposition note setting out how MiFID II is transposed into UK law and a full impact assessment of the effect this Order will have on the costs of business and the voluntary sector is available from HM Treasury, 1 Horse Guards Road, London SW1A 2HQ or www.gov.uk and is published alongside this Order on www.legislation.gov.uk.

Read the full note and every offence in this instrument

How this became law

This instrument became law without a debate or a vote. Under the negative procedure it took effect unless a motion to stop it succeeded, and none was tabled.

Neither House could have amended it. A statutory instrument is put to each House as a whole thing, to be approved or not; the Houses can reject an instrument or record their regret, but they cannot change a word of it. That is the constitutional position for every offence on this site.

The full procedural history →

What Parliament said

Mentions of this instrument in Hansard. Parliamentary material is reused under the Open Parliament Licence v3.0.

How this was identified as an offence

Everything above rests on the judgement that this provision creates a criminal offence, rather than mentioning one. That judgement is made by rule, from the words of the provision, and this is the rule that made it — with a confidence of 0.92.

Basis
the provision says a person is “guilty of an offence”
Confidence
0.92 of 1.00

A provision that states a penalty for an offence created elsewhere can read very like one that creates an offence, and the rules can mistake the one for the other. If the text quoted above sets a penalty for something made an offence by another provision, treat the classification on this page with that in mind, and read the instrument.

Check the source