PART 4Conduct of persons working in financial services sector

Offence

I136Offence relating to a decision causing a financial institution to fail

1

A person (“S”) commits an offence if—

a

at a time when S is a senior manager in relation to a financial institution (“F”), S—

i

takes, or agrees to the taking of, a decision by or on behalf of F as to the way in which the business of a group institution is to be carried on, or

ii

fails to take steps that S could take to prevent such a decision being taken,

b

at the time of the decision, S is aware of a risk that the implementation of the decision may cause the failure of the group institution,

c

in all the circumstances, S's conduct in relation to the taking of the decision falls far below what could reasonably be expected of a person in S's position, and

d

the implementation of the decision causes the failure of the group institution.

2

A “group institution”, in relation to a financial institution (“F”), means F or any other financial institution that is a member of F's group for the purpose of FSMA 2000 (see section 421 of that Act).

3

Subsections (1) and (2) are to be read with the interpretative provisions in section 37.

4

A person guilty of an offence under this section is liable—

a

on summary conviction—

i

in England and Wales, to imprisonment for a term not exceeding F2the general limit in a magistrates’ court (or 6 months, if the offence was committed before F12 May 2022) or a fine, or both;

ii

in Scotland, to imprisonment for a term not exceeding 12 months or a fine not exceeding the statutory maximum, or both;

iii

in Northern Ireland, to imprisonment for a term not exceeding 6 months or a fine not exceeding the statutory maximum, or both;

b

on conviction on indictment, to imprisonment for a term not exceeding 7 years or a fine, or both.