The FSA’s Powers
There are a number of ways the FSA can be alerted to a particular problem. It is likely to instigate a fact-finding investigation. Frequently, the investigators will be looking foe relevant documentation.
“Document” has a very wide definition includes information recorded in any form. Firms have a general duty to cooperate with the regulator under principle 11 of the FSA’s Principles for Businesses and, arguably, this will involve producing documents on request: FSA handbook at SUP 2.3.3.
The FSA has statutory powers to require the production of documents by the Financial Services and Markets Act 2000 which sets out, in part XI, the broad framework for the FSA’s investigatory and information-gathering powers.
Section 165 FSMA allows the FSA to require an authorised person (and connected persons) to produce “specified documents or information of a specified description” where the FSA reasonably requires the documents in connection with the exercise of its statutory functions.
Under s167 FSMA, the FSA can, if it considers there is good reason, appoint a competent person to conduct a general investigation into a firm’s business or its ownership or control. The investigator can require any person to produce documents he or she reasonably considers relevant to the purposes of the investigation (S171 FSMA).
S168 contains a similar power to appoint investigators, but in relation to specific contraventions or offences such as market abuse, money laundering or insider dealing.
The investigator can require any person to produce relevant documents but the threshold is lower.
The investigator only has to consider that the person in question may be able provide relevant information before seeking disclosure (s173 of FSMA).
Where a person could be compelled to produce a document under this part of FSMA, but it appears the document is in the possession of a third person (who is not otherwise within the scope of the relevant power), that third person can be required to produce the document (s175 of FSMA).
The FSA may exercise its powers under s165 of FSMA at the request of an overseas regulator.
