Discipline and dismissal: financial services

Updating authors: Nick Thorpe
Consultant editor: Michael Sholem, Macfarlanes

Summary

• Disciplinary action, including dismissal, against individuals in regulated firms is subject to the normal minimum standards under general employment law principles.
• Dismissal or disciplinary action against a person performing a senior management function may trigger requirements to notify the Financial Conduct Authority (FCA) and/or the Prudential Regulation Authority (PRA). 
• An investigation into an individual's conduct may need to be disclosed by the firm to the FCA and/or the PRA.
• If potential misconduct by an individual has been identified, FCA- and PRA-regulated firms should consider whether it is appropriate to remove the individual from carrying out their role while an investigation takes place. 
• The FCA and/or PRA may choose to launch its own investigation into an individual's misconduct or they may require the firm to investigate and report back. 
• It is important not to assume that any breach of the FCA and/or PRA rules or Principles will automatically justify dismissal. 
• An individual may decide to resign or seek to negotiate an agreed exit to avoid an investigation and potential dismissal.