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  • 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 2010

    • EN-5.2.2

      As indicated in Paragraph EN-B.4.5, the CBB requires disclosure by licensees in accordance with Module PD 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.

      October 2010

    • EN-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) The licensee'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 the licensee, in response to the compliance failures in question.
      October 2010

    • EN-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 other customers to significant risk of financial loss.
      October 2010

    • EN-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 the licensee 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 the licensee;
      (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 the licensee for challenging the intended penalty (which will not be less than 30 calendar days).
      October 2010

    • EN-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 2010

    • EN-5.2.7

      [This Paragraph was deleted in January 2016.]

      Deleted: January 2016
      October 2010

    • EN-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

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