Since our last newsletter, there have been significant developments in the regulatory arena. Key legislation has been published and has come into force. The Financial Services Authority (FSA) has now been added to the list of agencies which have the power to grant immunity from prosecution as a result of the Coroners and Justice Act 2009 coming into force on 6 April 2010. This provides statutory backing for the FSA's existing leniency policy for co-operating witnesses in market abuse cases and will encourage more whistleblowers to come forward so the FSA can prosecute more cases.
For example, the FSA may seek to rely on this legislation in its large-scale operation against insider dealing which hit the headlines recently after dawn raids were carried out at numerous residential and business addresses. We have included a link to some practical guidance on FSA dawn raids – see further below.
The Bribery Bill has now been published as the Bribery Act 2010 and it is anticipated that it will come into force later this year. Some practical guidance is set out below.
Bribery Act 2010
Although the Conservatives proposed a number of amendments to the Bribery Bill following pressure from business organisation, the CBI, that greater clarity was needed to ensure the Bill achieved its aim without hindering competitiveness, in the event most of these were dropped.
Practical guidance
The Secretary of State will publish guidance about the procedures commercial organisations can put in place to prevent bribery and therefore avoid prosecution (it is a defence under the Bribery Act 2010 if the organisation can demonstrate that it had adequate procedures in place).
In the meantime, we have prepared some practical guidance which you may wish to consider when reviewing your anti-bribery procedures. Adequate procedures may include:
- Having a clear ethical policy statement which is disseminated throughout the organisation and to any intermediaries;
- Ensuring payments made to third parties are fully accounted for;
- Ensuring any introduction fees that are paid are proportionate and justifiable;
- Regularly auditing accountancy processes;
- Recording the decision making processes which lead to each payment and the justification for the amount paid; and
- Clear corporate hospitality policies and a review of whether the commercial entity is spending appropriate amounts hosting clients and/or influential public figures.
FSA Dawn Raids
16 residential and business addresses were searched recently in the first operation carried out jointly between the Financial Services Authority (FSA) and the Serious Organised Crime Agency (SOCA) and the FSA's largest ever operation against insider dealing.
Guidance
We have prepared some general guidance on FSA Dawn Raids which you can find via the following link. We have included a general checklist in the event of a raid as well as specific checklists for receptionists and also for Senior Management / In-house Counsel.
Financial Supervision - European Community legislative proposals
Following the recent financial crisis, the European Community has proposed legislation to strengthen financial supervision in Europe. Our overview of the proposals can be found via the following link
http://www.clydeco.com/attachments/unpublished/12474/Financial%20Supervision.pdf
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.