TISA backs OFSI reforms to boost fairness in sanctions enforcement

The Investing and Saving Alliance has responded to a consultation by HM Treasury and the Office for Financial Sanctions Implementation regarding proposed reforms to civil enforcement processes.

TISA has publicly stated its support for efforts to streamline enforcement procedures for financial sanctions, highlighting the importance of consistency, proportionality and confidentiality incentives within the regulatory landscape.

Support for reforms

In its response, TISA expressed approval for HM Treasury and OFSI's proposals to introduce a settlement scheme and an early account process, in addition to suggested changes to case assessment guidance and voluntary disclosure discounts. These reforms are intended to help establish a more efficient and transparent enforcement regime which encourages cooperation and early settlement of cases.

Sophie Legrand-Green, Head of Policy at TISA, commented on the alliance's viewpoint:

"Financial sanctions enforcement must be robust, but also fair, proportionate and consistent. We welcome OFSI's efforts to streamline and modernise its approach to this end and would encourage further work to bring enforcement processes in line with the FCA. We would also recommend firms are incentivised to settle cases early through confidentiality protections, and that penalties reflect the real-world impact and intent behind breaches."

"A more principles-based, transparent framework will deliver better outcomes for consumers, firms and the wider financial system. TISA stands ready to help the OFSI achieve a better financial crime framework."

Recommendations for improvement

TISA has suggested that to fortify the reform proposals, OFSI should align its enforcement processes more closely with those of the Financial Conduct Authority. The intention is to provide regulated firms with greater consistency, regardless of which authority is leading a case.

The alliance has also proposed that settlement discussions should have defined time limits to enhance procedural efficiency. Confidentiality protections as part of settlement agreements were also recommended, with the aim of incentivising early engagement and cooperation from firms undergoing enforcement action.

Further, TISA has called for a principles-based approach for determining penalties. Under this framework, penalties would be assessed with regard to the intent behind breaches, their severity, and the financial implications. This approach is intended to ensure that maximum penalties are appropriately matched to the type and seriousness of the infraction, rather than applying uniform penalties irrespective of individual circumstances.

A more transparent framework

TISA's response places an emphasis on the need for a more transparent and principles-led enforcement model, stating that such a system would produce better results for consumers, regulated organisations and the wider financial system alike.

TISA, which represents approximately 270 member organisations across the financial services sector, has confirmed its willingness to work collaboratively with OFSI towards an improved framework for financial crime deterrence and management.