AUTH 8
Determining applications
AUTH 8.1
Application and purpose
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Application
AUTH 8.1.1
See Notes
This chapter applies to:
(1) an applicant for Part IV permission (including an applicant
for top-up permission)
which has made an application to carry on regulated activities in the United Kingdom; and
(2) a person for
whom an application for approval under section 59 of the Act (Approval for particular arrangements)
has been made with an application for Part
IV permission (including an application for top-up permission).
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Purpose
AUTH 8.1.2
See Notes
AUTH 8 gives
applicants an overview of how their applications for Part IV permission and for approval of a
candidate under section 59 of the Act will
be determined. This overview includes a summary of the decision making procedures
which apply to those decisions, within the scope of AUTH, that are subject to a statutory requirement
to issue formal notices.
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AUTH 8.1.3
See Notes
Statutory
notices include warning
notices and decision
notices. If the FSA proposes
or decides to take certain action in respect of an application within the
scope of AUTH,
it is required by the Act to
give a warning notice or
a decision notice.
These statutory notices have
specified procedures and specific actions and protections.
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AUTH 8.1.4
See Notes
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AUTH 8.1.5
See Notes
For guidance on the FSA's procedures before it determines an
application, see:
(2)
AUTH
6 (Approved persons)
for applications for approval of a candidate under section 59 of the Act, made with an application
for Part IV permission.
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AUTH 8.2
Determination of an application
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Who makes the determination?
AUTH 8.2.1
See Notes
A decision to determine an application
for Part IV permission,
or an application for approval under section 59 of the Act, is taken in one of two ways:
(1) by internal staff procedures involving FSA staff at an appropriate
level of seniority, if the decision is to grant the application on the terms
applied for (this decision does not involve giving a statutory notice); or
(2) by the FSA's Regulatory
Decisions Committee (RDC),
in any other case (this decision does involve the giving of a statutory notice).
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AUTH 8.2.2
See Notes
The decision on an application will be
taken by the RDC where FSA staff have recommended:
(1) the refusal, or proposed refusal, of:
(a) an application for Part IV permission (sections 52(7) and 52(9)(c))
of the Act (Determination
of applications)); or
(b) an application for approval under section
59 of the Act made
with an application for Part
IV permission (sections 62(2) and 62(3) of the Act (Applications for approval:
procedure and right to refer to the Tribunal)); and
(2) the grant, or proposed grant, of an application
for Part IV permission subject
to a limitation or requirement which was
not applied for by the applicant or with a narrower description of regulated activity than
that to which the application relates (sections 52(6)(a) and 52(9)(a) of the Act).
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What are internal staff procedures?
AUTH 8.2.3
See Notes
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AUTH 8.2.4
See Notes
As part of its application for Part IV permission, an
applicant may apply for permission which
includes a limitation (for
example, a limitation on client categories), or
a requirement (for
example, a requirement not
to hold or control client money). Limitations and requirements may be applied
for in the application pack, or in a revision to the application pack submitted
by the applicant if, for example, its business plans have changed. In those
situations, FSA staff
have authority to grant the application, on the terms applied for, using internal
staff procedures.
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An overview of internal staff procedures
AUTH 8.2.5
See Notes
(1) Internal staff procedures for decisions
within the scope of AUTH are
intended to ensure that decisions will, so far as possible, be taken by FSA staff with a good
knowledge and understanding of:
(a) the application concerned; and
(b) other relevant factors in the general
context of the application.
(2) They are also designed to ensure that
applicants with routine applications obtain a decision as quickly as the nature
of their application allows.
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AUTH 8.2.6
See Notes
(1) Internal staff procedures provide for
relevant aspects of the application to be taken fully into account and require
that decisions are taken by FSA staff
with appropriate experience. Decisions to grant the majority of applications
for approval of a candidate,
which are more routine in nature, may be made by a single individual, subject
to appropriate oversight.
(2) The FSA has
established staff committees which may grant an application for Part IV permission, or
approval under Part V of the Act,
as appropriate. The Authorisation and Approvals Committee will consider an
application where, for example, it is complex or sensitive and the recommendation
is to refer the application to the RDC to give a warning notice. The chairman of the Authorisation
and Approvals Committee is the director responsible for authorisation decisions and its members are
senior staff at the FSA.
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AUTH 8.2.7
See Notes
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AUTH 8.2.8
See Notes
FSA staff
are required by their contract of employment to comply with a code of conduct
which imposes strict rules to cover the handling of conflicts of interest
which may arise from personal interests or associations. FSA staff who are subject to a conflict of
interest must declare that interest to the person to whom they are directly responsible
for the decision. This individual to whom the conflict of interest is declared
will decide whether that conflict precludes the involvement of the FSA staff member in making
a decision.
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The Regulatory Decisions Committee
AUTH 8.2.9
See Notes
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AUTH 8.2.10
See Notes
The RDC has
a Chairman, one or more Deputy Chairmen, and other members. Other than the
Chairman, none of the members of the RDC is
an employee of the FSA.
Members are:
(1) current and recently retired practitioners
with financial services industry skills and knowledge; and
(2) other suitable individuals representing
the public interest.
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AUTH 8.2.11
See Notes
For full details of the RDC and its procedures
see DEC 4 (The decision maker). All decisions involving giving
of statutory notices within
the scope of AUTH will
be determined by the RDC (see AUTH
8.2.2 G).
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AUTH 8.2.12
See Notes
FSA staff
are responsible for assembling and assessing the information required by the RDC and making recommendations
to the RDC.
Section 395 of the Act,
however, requires the FSA to
have procedures under which a decision which gives rise to a statutory notice is "taken
by a person not directly involved in establishing the evidence on which that
decision is based." So, the RDC is
not directly involved in establishing the evidence on which decisions are
based.
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AUTH 8.3
Statutory notices and other matters
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AUTH 8.3.1
See Notes
A statutory
notice includes a warning
notice (see AUTH
8.3.2 G to AUTH
8.3.5 G) and a decision notice (see AUTH
8.3.8 G to AUTH
8.3.10 G).
A final notice will
also be given to a person which has received a decision notice (see AUTH
8.3.14 G to AUTH
8.3.16 G).
See AUTH
8 Annex 1 G.
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Warning notices
AUTH 8.3.2
See Notes
A warning
notice warns the recipient that the FSA proposes to take certain action and gives
an opportunity for representations to be made to the FSA before a decision is made.
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AUTH 8.3.3
See Notes
FSA staff
will review each application that falls within the scope of AUTH. Where they consider that the application
should be refused, or should be granted subject to a limitation or a requirement which was not applied for, or
with a narrower description of regulated
activity than that to which the application relates (see AUTH
8.2.2 G), they will recommend
to the RDC that
a warning notice be
given.
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AUTH 8.3.4
See Notes
After considering the FSA staff recommendation, the RDC may decide to grant
the application on the terms applied for. However, the RDC will decide to give a warning notice to the applicant, or, in
the case of applications for approval under section 59 of the Act, to all interested
parties, if it proposes that any of the following actions
be taken:
(1) grant an application for Part IV permission either
with a limitation or requirement which was
not applied for, or with a narrower description of regulated activity than that to which the
application relates (see AUTH 3), under section 52(6)(a)
of the Act;
or
(2) refuse to grant an application for Part IV permission (see AUTH
3) under section 52(7) of the Act; or
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AUTH 8.3.5
See Notes
For full details of warning notices and the warning notice procedure, see DEC 2.2 (Warning notice procedure).
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Representations
AUTH 8.3.6
See Notes
The warning
notice will contain a statement that the person concerned is entitled to make representations
to the RDC.
It will specify a reasonable time period, of not less than 28 business days from receiving
the warning notice,
within which the person to
whom it is given may make representations to the RDC.
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AUTH 8.3.7
See Notes
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Decision notices
AUTH 8.3.8
See Notes
A decision
notice states the action the FSA has decided to take. For the purpose
of an application within the scope of AUTH,
the decision notice represents
the FSA's determination
of the application.
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AUTH 8.3.9
See Notes
After considering any written and oral
representations, the RDC may
decide to grant the application on the terms applied for. However, the RDC will decide to give
a decision notice to
the persons to
whom the warning notice was
given if it decides that any of the following actions be taken:
(1) grant an application for Part IV permission with
a limitation or requirement which was
not applied for, or with a narrower description of regulated activity than those to which the
application relates (see AUTH 3), under section 52(9)(a)
of the Act;
or
(2) refuse to grant an application for Part IV permission (see AUTH
3) under section 52(9)(c) of the Act; or
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AUTH 8.3.10
See Notes
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Reference to the Financial Services and Markets Tribunal
AUTH 8.3.11
See Notes
(1) Any person who
receives a decision notice is
entitled to refer the FSA's decision
to the Tribunal.
(2) Under section 133(1) of the Act (Proceedings: general
provision), any reference must be made within 28 days of the date when the decision notice
is given, or within any other period that may be prescribed in the Tribunal rules.
(3) The Tribunal is
appointed by the Lord Chancellor's Department.
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AUTH 8.3.12
See Notes
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AUTH 8.3.13
See Notes
Any party to a reference to the Tribunal may appeal against
the Tribunal's decision
on a point of law to the Court of Appeal or, in Scotland, to the Court of
Session.
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Final notices
AUTH 8.3.14
See Notes
The FSA will
give a final notice to
the person that
received a decision notice if the FSA:
(1) takes the action set out in the decision notice (if a reference to the Tribunal has not been
made and the time limit for making references has passed); or
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AUTH 8.3.15
See Notes
The final
notice will state the action being taken and the date on which
it is to be taken.
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AUTH 8.3.16
See Notes
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Publication
AUTH 8.3.17
See Notes
Details on the publication of decisions
are set out in DEC 5.2 (Publication).
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AUTH 8.3.18
See Notes
In the case of a decision within the
scope of AUTH, the FSA's policy is to publish
relevant details about the decision. The details may include the identity
of the applicant or the name of any person who
is the subject of an application such as an application for approval under
section 60 of the Act.
Other details may include the nature of the application and grounds for the
decision. The FSA will
seek to publish these details in a way which is fair to the person who is named and which is not prejudicial
to the interests of consumers.
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AUTH 8 Annex 1
Determining applications
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AUTH 8 Annex 1
See Notes
The FSA's decision making procedures
for applications involving warning notices and decision notices
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