EN-5.2 EN-5.2 CBB Policy
EN-5.2.1
The level of financial penalty applied is determined by the nature of the contravention and the amount of additional supervisory attention and resources taken up by a
licensee 's or persons' referred to in paragraph (b) of Article (68 bis 1) of the CBB Law behaviour and by limits set in the CBB Law. The CBB intends that the impact of a penalty should derive more from its signalling effect than from the actual amount of money involved.Amended: April 2016
October 2010EN-5.2.2
As indicated in Paragraph EN-B.4.5, the CBB requires disclosure by
licensees in accordance with Modules PD or BR of any financial penalties served on them, together with a factual description of the reasons given by the CBB for applying the penalty. In addition, the CBB may publicise the issuance of a financial penalty notice, where there is a strong case that doing so would help achieve the CBB's supervisory objectives, as mentioned in Article 132 of the CBB Law.Amended: October 2019
October 2010EN-5.2.3
In assessing whether to serve a financial written penalty notice, the CBB takes into account the following criteria:
(a) The seriousness of the contravention, in relation to the requirement(s) concerned;(b) The duration and/or frequency of the contravention, and the extent to which it reflects more widespread weaknesses in controls and/or management;(c) The extent to which the contravention was deliberate or reckless;(d) Thelicensee 's past compliance record and conduct following the contravention; and(e) The scope of any other action taken by the CBB or other regulators against thelicensee , in response to the compliance failures in question.October 2010EN-5.2.4
Part 11 of the CBB Law outlines instances where financial penalties may be imposed. Examples of the types of compliance failings that may lead to the serving of a financial penalty notice include (but are not limited to):
(a) Failures to address persistent delays and/or significant inaccuracies in regulatory reporting to the CBB;(b) Repeated failures to respond to formal requests for information from the CBB, within the deadlines set;(c) The submission of information to the CBB known to be false or misleading; and(d) Major failures in maintaining adequate systems and controls in accordance with CBB's requirements, subjecting investors and othercustomers to significant risk of financial loss.October 2010EN-5.2.5
In accordance with Article 125 of the CBB Law, a written notice of a financial penalty must be issued before imposing any financial penalty. The written notice must contain the following information:
(a) The violations committed by thelicensee with respect to the CBB Law; the CBB Rulebook; any Directions, Warnings or Formal Requests for Information; or violations of the terms and conditions of the license issued to thelicensee ;(b) Evidence or proof to support the above;(c) The level of financial penalty to be imposed; and(d) The grace period to be allowed to thelicensee for challenging the intended penalty (which will not be less than 30 calendar days).October 2010EN-5.2.6
The
licensee may either pay the penalty or, pursuant to Article 126 of the CBB Law, may object within the period noted in Subparagraph EN-5.2.5(d). In accordance with Article 127 of the CBB Law, the CBB will consider any objection and make a formal resolution within 30 calendar days of receiving the objection. Thereafter, the resolution and any accompanying penalties are final and must be paid within 30 calendar days.October 2010EN-5.2.7
[This Paragraph was deleted in January 2016.]
Deleted: January 2016
October 2010EN-5.2.8
The imposition of a financial penalty does not preclude the CBB from also using other enforcement measures to remedy the same violation (for instance, a Direction).
October 2010
