• If the FSC determines that a licensed financial services provider has committed a contravention, it has the authority to impose an administrative penalty in relation to the breach.
  
  
• When the FSC decides to enforce an administrative penalty, it will consider various factors and then determine the specific amount of the penalty within a range established by the Regulations.
  
  
• When the FSC intends to levy an administrative penalty, it must issue a notice of the proposed penalty to the licensee, including the following information: (a) the contravention in respect of which it proposes to impose the penalty, (b) the amount of the proposed penalty, and (c) the licensee's right to provide input or representations to the FSC.
  
  
• When receiving the notice of the proposed penalty, the licensee has a 21-day window to submit representations to the FSC explaining why they should not be obligated to pay the administrative penalty or why the penalty should be reduced.
  
  
• The FSC has the power to withdraw a notice of proposed penalty and substitute a new one for a different amount.
  
  
• Following the expiration of the 21 days, the FSC may, by written notice, impose an administrative penalty to the licensee in an amount not exceeding the amount stated in the proposed penalty notice. Prior to imposing the penalty, the FSC will be required to consider any of the representations made.
  
  
• Some of the factors the FSC will consider are:
  • The nature and seriousness of the contravention
  • Whether there was any previous contravention
  • Whether the contravention was deliberate or reckless or caused by negligence
  • Whether any loss or damage has been sustained by third parties, as a result of the contravention
  • The ability of the licensee to pay the penalty including any gain resulting to the licensee as a result of the contravention
  • Any other just matters
    
    
• The FSC may impose an administrative penalty on a licensee where the licensee fails to pay any fee payable under financial services legislation or any penalty payable under the Regulations on or before the date upon which the fee, charge or penalty is due for payment. Where the FSC decides to impose a late payment penalty on a licensee, it should send a penalty notice to the licensee stating the fee, charge or penalty in respect of which the penalty is imposed and the amount of the proposed penalty calculated. The licensee should pay this within 14 days of the receipt of the notice.
  
  
• If the licensee is dissatisfied with the FSC's decision to impose an administrative penalty or disagrees with the penalty amount, they have the option to file an appeal with the FSC Appeals Board within a 14-day window. It's important to note that filing an appeal does not suspend the requirement to make the payment.
  
  
• The FSC cannot issue a proposed penalty notice to a licensee with respect to a contravention after the end of the period of two years commencing on the date the FSC first knew of the contravention. The FSC is seemed to know of a contravention if it has information from which the contravention can be inferred. The FSC cannot issue a penalty notice more than six years after the date upon which the fee, charge or penalty became due for payment.
  
  
• There are various categories of contravention that the FSC can issue administrative penalties under eg licensing contravention (US$2,000 to US$20,000), contravention of financial resource requirements (US$2,000 to US$20,000), late filings/notifications (vary depending on the number of days but can range from US$100 to US$10,000), failure to obtain approval (US$1,000 to US$5,000), record keeping (US$500 to US$5,000), compliance contravention (US$2,500 to US$10,000), late payment of fee or penalty (US$500 to US$5,000), failure to submit returns (US$500 to US$5,000), carrying on unauthorised financial services business (US$5,000 to US$60,000), other contravention (US$100 to US$5,000).
  
  
• Persons should bear in mind that these administrative penalties are not the only regulatory enforcement tools the FSC can use. There are others eg instituting criminal proceedings under the relevant financial services legislation, regulatory onsite inspections, issuing pubic notices and advisory warnings, censure, issuing cease and desist notices, revocation of licences, etc.
  
  
• Licensed regulated financial service providers should contact their appointed legal counsel as soon as possible if they receive an administrative penalty notice for advice on how to handle the matter.

We trust you find this information beneficial. If you have any inquiries or require assistance, please do not hesitate to reach out to us.