UK finance watchdog seeks to speed up rule breach disputes

By Huw Jones

LONDON, April 14 (Reuters) - Britain's financial regulator has proposed a new way to speed up contested cases of rule breaches and inject more transparency into the judicial process.

The Financial Conduct Authority (FCA) set out on Thursday plans for a "focused resolution agreement" in cases where only the outcome is contested, not the rule breach or liability.

Such cases could be dealt with faster than when several aspects are being contested.

As an incentive to accept a resolution agreement, there would be a 30 percent discount on any fine handed down by the Regulatory Decisions Committee, the FCA's independent body which reviews actions brought by the watchdog.

A 30 percent discount is typically only granted when a person or firm settles at so-called Stage 1, without contesting any aspect of the case against them. Many individuals are likely to still opt for this given the certainty it brings.

"It (Other OTC: ITGL - news) is important that people have confidence in the enforcement process and that it is used fairly, efficiently and effectively," FCA director of enforcement, Mark Steward, said in a statement.

Simon Morris, a partner at CMS (HKSE: 0867-OL.HK - news) law firm, said the proposal was striking as it offered the prospect of direct access to the Regulatory Decisions Committee.

"This will not only enable firms and individuals to speak directly to the committee, but will also give a far greater sense of fairness," Morris said.

"A constant theme of firms and individuals subject to FCA disciplinary action is the inaccessibility of the actual decision makers," Morris said.

"You rarely get close to the organ-grinder unless you are contesting the case, and the new proposals countenance this in a wider range of circumstances."

The focused resolution agreement proposal is out for public consultation and is among the watchdog's responses to recommendations from a review of enforcement by the finance ministry, and from a report into the collapse of HBOS bank during the financial crisis.

"We believe that our proposals will achieve the aim of the recommendations, which was to enhance the FCA's capacity to deal with misconduct swiftly, fairly and robustly, and we welcome any comments on our approach to implementation," Steward said.

The FCA will propose further changes later in the year to address other recommendations made by the reviews. (Reporting by Huw Jones; Editing by Mark Potter)