Financial Services and Markets Act 2000, section 401

Proceedings for offences

Part XXVII Offences

[F3142 (1) In this section “offence” means—

(a)an offence under this Act,

(b)an offence under subordinate legislation made under this Act, or

(c)an offence under Part 7 of the Financial Services Act 2012 (offences relating to financial services).F3142]

(2)Proceedings for an offence may be instituted in England and Wales only—

(a)by the [F3143appropriate regulatorF3143] or the Secretary of State; or

(b)by or with the consent of the Director of Public Prosecutions.

(3)Proceedings for an offence may be instituted in Northern Ireland only—

(a)by the [F3144appropriate regulatorF3144] or the Secretary of State; or

(b)by or with the consent of the Director of Public Prosecutions for Northern Ireland.

[F3145 (3A) For the purposes of subsections (2)(a) and (3)(a), the PRA is the “appropriate regulator” in respect of each of the following offences—

(a)an offence under section 55P(10) where the contravention is of a requirement imposed by the PRA;

(b)an offence under section 56(4) where the prohibition order is made by the PRA;

(c)an offence under section 177(3) where the investigation is being, or is likely to be, conducted on behalf of the PRA;

(d)an offence under section 177(4) where the requirement is imposed by the PRA;

(e)an offence under section 177(6) where the warrant is issued as a result of information on oath given by the PRA or a person appointed by the PRA to conduct an investigation on its behalf;

(f)an offence under section 191F(1) where the notice should have been given to the PRA;

(g)an offence under any of section 191F(2) to [F3146 (4) and (5) toF3146] (7) where the notice, approval or information was given to or by the PRA;

(h)an offence under section 366(3), unless the activity of effecting or carrying out long-term contracts of insurance is not to any extent a PRA-regulated activity;

(i)an offence under section 398(1) where the information was given to the PRA.

[F3147 (3AB) For the purposes of subsections (2)(a) and (3)(a), the Bank of England is the “appropriate regulator” in respect of an offence under section 191F(4A). F3147]

(3B) For the purposes of subsections (2)(a) and (3)(a), the FCA is the “appropriate regulator” in respect of any other offence. F3145]

F3148 (4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5)In exercising its power to institute proceedings for an offence, the [F3149appropriate regulatorF3149] must comply with any conditions or restrictions imposed in writing by the Treasury.

(6)Conditions or restrictions may be imposed under subsection (5) in relation to—

(a)proceedings generally; or

(b)such proceedings, or categories of proceedings, as the Treasury may direct.

Read section 401 in the full Act → Definitions (7) Cases (5)

Definitions used in section 401

appropriate regulator

(11) The FCA is the “appropriate regulator” in the case of a contravention of any other requirement , other than a case falling within paragraph 26 of Schedule 17A .

Defined in s.380(11) · see it in the full Act
director

“director”, in relation to a body corporate, includes—

(a)

a person occupying in relation to it the position of a director (by whatever name called); and

(b)

a person in accordance with whose directions or instructions (not being advice given in a professional capacity) the directors of that body are accustomed to act;

Defined in s.417(1) · see it in the full Act
the PRA

“the PRA” means the Prudential Regulation Authority;

Defined in s.417(1) · see it in the full Act
prohibition order

“prohibition order” (except in the expression “Part 9C prohibition order” or “Part 18C prohibition order” ) has the meaning given in section 56(2);

Defined in s.417(1) · see it in the full Act
PRA-regulated activity

“PRA-regulated activity” has the meaning given in section 22A;

Defined in s.417(1) · see it in the full Act
Bank of England

“Bank of England” is to be read in accordance with section 2A(4) to (6);

Defined in s.417(1) · see it in the full Act
the FCA

(2) The Financial Conduct Authority is in this Act referred to as “the FCA”.

Defined in s.1A(2) · see it in the full Act

“the FCA” means the Financial Conduct Authority;

Defined in s.417(1) · see it in the full Act

Cases considering section 401 (5)

R v Rollins

[2010] UKSC 39 · 28 July 2010Limits

The section is not part of an exhaustive code of the Authority’s prosecutorial powers. It regulates prosecution of offences under the Act and subordinate legislation made under it. (see paras [15]; [19]; [24]; [26]) The subsection defines the offences governed by section 401 as offences under the Act or subordinate legislation made under it. It does not define the entire range of offences which the Authority may prosecute. (see paras [6]; [15]) The subsection limits the persons who may prosecute offences within section 401. It does not itself confer an exhaustive prosecutorial power on the Authority. (see paras [15]; [20]–[21]) The subsection requires the Authority to comply with written Treasury conditions or restrictions when prosecuting an offence governed by section 401. (see para [6]) The subsection permits Treasury conditions or restrictions to apply generally or to specified proceedings or categories of proceedings. (see para [6])

City of York Council, R (on the application of) & v AUH & Ors

[2023] EWCA Crim 6 · 16 January 2023Disapplies

Section 401 was examined to determine whether its consent requirement governed a local authority’s prosecution of illegal moneylending (see paras [28]–[45]). The court used the definition of offence in section 401(1) to identify the offences to which section 401 applied, while holding that the local authority’s prosecutorial power arose elsewhere (see paras [32]–[40]). The court held that section 401(2) did not apply to the separate statutory power enabling local weights and measures authorities to prosecute illegal moneylending (see paras [39]–[45]). The provision was set out as part of section 401(2)’s prosecutorial restrictions; it did not govern the separate power arising under the 2013 Order (see paras [32], [39]–[45]). The court held that the DPP’s consent was not required because the local authority’s power to prosecute illegal moneylending derived from separate legislation and article 9 of the 2013 Order (see paras [28]–[45]).

Rollins, R. v

[2009] EWCA Crim 1941 · 9 October 2009Interprets

The provision’s essential purpose is to limit those who may prosecute offences under the Act and to enable the Authority to prosecute those offences without consent. It does not exhaust the Authority’s other prosecutorial powers. (see paras [22]-[25]) The subsection permits the Authority to institute proceedings for offences under the Act without obtaining the Director of Public Prosecutions’ consent. It does not imply that other prosecutorial powers are absent. (see para [23]) The corresponding Northern Ireland restriction likewise concerns who may prosecute the specified offences. It does not define the wider extent of the Authority’s prosecutorial power. (see para [23]) The reference to the Office of Fair Trading identifies an additional specialist prosecutor. It supports the conclusion that the section does not curtail wider powers of the persons it names. (see para [23])

What each judgment says about section 401 is in the case-law panel in the full Act.

Explanatory note

710.This section confers powers to prosecute offences under this Act.  The Secretary of State and the Authority can prosecute any offence in England, Wales or Northern Ireland.  Others can only prosecute with the consent of the Director of Public Prosecutions in England and Wales or, in Northern Ireland, with the consent of the Director of Public Prosecutions for Northern Ireland.  The DGFT can prosecute in England, Wales or Northern Ireland for breaches of any prohibition on carrying on any CCA 1974 business he has imposed under section 203.

711.Subsections (5) and (6) give the Treasury the power to set conditions relating to the way in which the Authority can bring proceedings for offences under this Act.  For example, the Treasury could require the Authority to comply with the Code for Crown Prosecutors.   In Scotland, prosecution will be the responsibility of the Lord Advocate.

All the explanatory notes for the Act

Amendments and notes

24 notes from legislation.gov.uk

Amendments

  1. F3142S. 401(1) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 9 para. 38(2) (with Sch. 20); S.I. 2013/423, art. 3, Sch.
  2. F3143Words in s. 401(2)(a) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 9 para. 38(3) (with Sch. 20); S.I. 2013/423, art. 3, Sch.
  3. F3144Words in s. 401(3)(a) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 9 para. 38(3) (with Sch. 20); S.I. 2013/423, art. 3, Sch.
  4. F3145S. 401(3A)(3B) inserted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 9 para. 38(4) (with Sch. 20); S.I. 2013/423, art. 3, Sch.
  5. F3146Words in s. 401(3A)(g) inserted (16.12.2016) by The Bank Recovery and Resolution Order 2016 (S.I. 2016/1239), arts. 1(2), 33(6)(a)
  6. F3147S. 401(3AB) inserted (16.12.2016) by The Bank Recovery and Resolution Order 2016 (S.I. 2016/1239), arts. 1(2), 33(6)(b)
  7. F3148S. 401(4) omitted (26.7.2013 for specified purposes, 1.4.2014 in so far as not already in force) by virtue of The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2013 (S.I. 2013/1881), arts. 1(2)(6), 10(14)
  8. F3149Words in s. 401(5) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 9 para. 38(5) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

Modifications

  1. C1512S. 401 applied (1.12.2001) by S.I. 1995/1537, reg. 23(6) (as amended (1.12.2001) by S.I. 2001/3649, arts. 1, 509(g))
  2. C1513S. 401 amended (1.12.2001) by S.I. 2001/2657, arts. 1(1), 10(8), 11(8), 13(1)(3) (which was revoked (8.10.2001) by S.I. 2001/3083, arts. 1(2), 23); S.I. 2001/3538, art. 2(1)
  3. C1514S. 401 applied by Companies (Audit, Investigations and Community Enterprise) Act 2004 (c. 27), s. 15A(7) (as substituted (6.4.2008) by The Companies Act 2006 (Consequential Amendments etc) Order 2008 (S.I. 2008/948), arts. 2(2), 3(1), Sch. 1 para. 232(2) (with arts. 6, 11, 12))
  4. C1515S. 401 applied (with modifications) (7.6.2010) by The Credit Rating Agencies Regulations 2010 (S.I. 2010/906), reg. 27
  5. C1516S. 401 applied (with modifications) (1.4.2013) by The Financial Services Act 2012 (Transitional Provisions) (Enforcement) Order 2013 (S.I. 2013/441), arts. 1(1), 34(2)
  6. C1517S. 401 applied (1.4.2013) by The Financial Services and Markets Act 2000 (Over the Counter Derivatives, Central Counterparties and Trade Repositories) Regulations 2013 (S.I. 2013/504), regs. 1(2), 57 (with regs. 52-58)
  7. C1518S. 401 applied (with modifications) (18.9.2016) by The Payment Accounts Regulations 2015 (S.I. 2015/2038), reg. 1(2)(b), Sch. 7 para. 6
  8. C1519S. 401 applied (with modifications) (1.1.2018) by The Packaged Retail and Insurance-based Investment Products Regulations 2017 (S.I. 2017/1127), reg. 1, Sch. 1 para. 7(3)
  9. C1520S. 401 applied (with modifications) (14.11.2018) by The Central Counterparties (Amendment, etc., and Transitional Provision) (EU Exit) Regulations 2018 (S.I. 2018/1184), regs. 1(3), 24
  10. C1521S. 401 applied (with modifications) (1.1.2019) by The Securitisation Regulations 2018 (S.I. 2018/1288), reg. 1, Sch. 1 para. 8(4) (with Sch. 1 paras. 13, 14)
  11. C1522S. 401 applied (with modifications) (30.9.2020) by The Equivalence Determinations for Financial Services (Amendment etc.) (EU Exit) Regulations 2020 (S.I. 2020/1055), regs. 1(2), 6(1)(2)(5)
  12. C1523S. 401 applied (31.12.2020) by The Credit Rating Agencies (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/266), regs. 1(3), 23 (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)
  13. C1524S. 401 applied (with modifications) (31.5.2021) by The Civil Liability Act 2018 (Financial Conduct Authority) (Whiplash) Regulations 2021 (S.I. 2021/594), regs. 1, 2(9)(b)
  14. C1525S. 401 applied (with modifications) (30.1.2024 for specified purposes, 1.11.2024 in so far as not already in force) by The Securitisation Regulations 2024 (S.I. 2024/102), reg. 2(1)(e)(2), Sch. 1 para. 13(3) (with reg. 52(3), Sch. 3); as amended by S.I. 2024/705, regs. 1(2), 2(2)
  15. C1526S. 401 applied (with modifications) (14.1.2025 for specified purposes, 13.7.2026 in so far as not already in force) by The Short Selling Regulations 2025 (S.I. 2025/29), regs. 2(2)(3), 24, 25, Sch. 1 Pts. 1, 2; S.I. 2026/587, reg. 2(b)
  16. C1527S. 401(2)(3)(5)(6) applied (6.3.2008) by The Regulated Covered Bonds Regulations 2008 (S.I. 2008/346), reg. 38(2)