The guide aims to shed light on the Application of Enforcement Measures
In an announcement published this morning the MGA has published a guidance note to shed light on how it exercises the discretion afforded to it by the law in the selection of the nature and scope of enforcement measures it takes when a breach of law is committed.
The contents are especially noteworthy to licensees, as they lay out in a non exhaustive manner the circumstances and actions which the Authority gives particular importance to in it’s decision making processes, including the interaction between a licensee in breach and the Authority.
“This Explanatory Note is intended to delineate the guiding principles which the Authority embraces and considers when deciding on which enforcement measure is most appropriate and proportionate in the context of the breach committed, and where the enforcement measure is an administrative penalty or a regulatory settlement in lieu of criminal proceedings, the quantum of such penalty.
“The Authority has wide discretionary powers in deciding the magnitude of an administrative penalty and therefore, this Explanatory Note serves as guidance to shed light on the manner in which such discretion is exercised and the reasoning underpinning such decisions.”
Purpose of Enforcement Measures, as outlined, permits the Authority to take different forms of enforcement measures against Authorised Persons in situations of noncompliance, in accordance with article 8 of the Regulations. In order to decide on the most appropriate approach, the Authority considers the measures not conducive to the achievement of inter alia the following aims [the list is not exhaustive]:
Ensuring that the licensee rectifies any default;
Ensuring that the interests of the players and those of the general public are adequately safeguarded;
Ensuring that any financial gain which the Authorised Person may have made through non-compliance is neutralised;
Ensuring that the licensed operation can be carried out in adherence to regulatory requirements.
As a general rule, the enforcement measures are therefore resorted to as follows:
A warning is issued when the breach in question does not directly undermine the achievement of one of the regulatory objectives set out at law, and the licensee’s behaviour includes one or more mitigating circumstances;
An administrative penalty is imposed when: i. The breach committed undermines one or more regulatory objectives; and, or ii. The breach committed does not undermine one or more regulatory objectives, but the licensee’s behaviour includes one or more aggravating circumstances; and, or iii. The recent compliance track record of the licensee, in general, is not sufficiently good.
The licence is suspended where there are issues which undermine the Authorised Person’s ability to conduct its operations in a manner compliant with applicable legislation, but such issues may be remedied with appropriate action which the licensee commits to undertake;
The licence is cancelled when the licensee’s operation is affected by systemic issues which, in the Authority’s determination, cannot be remedied in a manner which would be satisfactory for the Authority to permit the licensee to recommence operations.
Heathcliff Farrugia, CEO of MGA spoke at this morning’s SiGMA conference on regulation and compliance, saying:
“I believe a lot more needs to be done, and a lot more can be done on the illegal front because that is the way to protect the industry“
The guide can be accessed here.