30 SECOND GUIDE TO ...

STATUTORY LIMITS

What are those?

Statutory limits decide whether an individual can be fined by the Financial Conduct Authority once a period of time has passed since regulations were breached.

Different limits are set for different acts, but once the cut-off point has passed the individual or firm cannot be forced to pay up, even if wrongdoing has occurred.

How long are we talking?

It varies between acts and between different legal systems. The statutory limitation for bringing prosecutions for misconduct is currently six years after the regulator was informed.

But the law changed in 2014, so it only applies to misconduct which took place after that.

Has anyone avoided trouble?

The HBOS report published yesterday will cause great frustration to many because it comes much too late to impose fines on any individuals.

At the time when things started to go wrong for HBOS, the law imposed a statutory limit of two years on fining individuals for financial misconduct.

The regulators became aware of what was happening in 2008, so the statutory limit ran out in 2010 – meaning no one involved in misconduct can now be fined.

So people can get off scot-free?

no, the FCA is still able to ban people from working in financial services. But bans imposed by the FCA do not prevent individuals from working in top jobs in other sectors.