DEC 4
The decision maker
DEC 4.1
Allocation of decision making
- 01/12/2004
DEC 4.1.1
See Notes
This
section sets out the allocation of decision making between the RDC and executive procedures for decisions which:
(1) give rise to an obligation to give a statutory notice; or
- 01/12/2004
DEC 4.1.2
See Notes
Statutory
notice
associated decisions include
decisions:
(1) to set or extend the period for making
representations (see DEC 4.4);
(2) whether a copy of the statutory notice needs to be given to any
third party and the period for the third party to make representations;
(3) to refuse access to FSA material; and
(4) as to the information it is appropriate
to publish about the matter to which a final
notice, or a supervisory
notice which has already taken effect, relates.
- 01/12/2004
DEC 4.1.3
See Notes
FSA staff
responsible for preparing and recommending action in individual cases will
allocate cases to the RDC (by
full or modified procedures) or to executive
procedures in accordance with DEC
4.1.4 G and DEC
4.1.6 G.
- 01/12/2004
Decisions to be taken by the RDC
DEC 4.1.4
See Notes
The RDC has
responsibility for statutory
notice decisions and statutory
notice associated decisions if the FSA proposes or takes any of the following
actions:
(1) to impose a limitation or a requirement which was not applied for, or
specify a narrower description of regulated
activity than that applied for, on the grant of a Part IV permission;
(2) to restrict a Part IV permission on the FSA's own initiative (by removing a regulated activity, by
imposing a limitation or requirement or by specifying
a narrower description of regulated
activity) in a way that would make a fundamental change (see DEC
4.1.5 G) to the nature of the Part IV permission held
(whether indefinitely, or for a limited period);
(3) to refuse an application to vary a Part IV permission, or
to restrict a Part IV permission on
the grant of a variation (by imposing a limitation or requirement which was
not applied for or by specifying a narrower description of regulated activity than that applied for),
in a way that would make a fundamental change (see DEC
4.1.5 G) to the nature of the Part
IV permission that would have been held had the application
been granted in full (whether indefinitely, or for a limited period);
(4) to refuse an application for a Part IV permission, to
refuse an application to cancel a Part
IV permission or to cancel a Part IV permission on
the FSA's own
initiative;
(4A)
to
refuse an application for, or to revoke, a small e-money issuer certificate (see ELM 8 (Small e-money issuers));
(5) to refuse approved
person status, or withdraw it under section 63 of the Act (Withdrawal of approval);
(6) to make a prohibition order in relation to any person, or refuse an application
to vary or revoke such an order;
(7) to impose a requirement on an incoming firm with an
effect equivalent to making a fundamental change (see DEC
4.1.5 G) to the nature of a permission,
or to refuse an application to vary or rescind such a requirement;
(8) to exercise the FSA's powers to impose a financial penalty
or public censure on any person,
or to make a restitution order against any person;
(9) to exercise any power of the FSA relating to a regulated collective investment scheme,
other than to:
(a) refuse an application for an authorisation order (but
see (10)); or
(b) refuse an application for recognition
of a collective investment
scheme under section 270 (Schemes authorised in designated countries
or territories) or 272 (Individually recognised overseas schemes) of the Act; or
(c) object to a notice of intention to invite persons to participate
in a collective investment
scheme constituted in another EEA State; or
(10) to refuse an application for an authorisation order, if
the applicant is not the operator of an existing AUT or ICVC;
(11) to impose a requirement on a former underwriting member of
Lloyd's or refuse an application to vary or rescind such a requirement;
(12) to make an order disapplying the exemption
in section 327(1) of the Act (Exemption
from the general prohibition) in relation to a professional firm to the extent
specified in the order, or refuse an application to vary or revoke such an
order;
(13) to disqualify an auditor or actuary;
(14) to refuse to give a consent notice to a UK firm wishing to establish a branch under an EEA right;
(15)
to
give a direction under any of the following sections of the Building Societies
Act 1986:
(a) section 36(3), (5), (6), (7) or (10)
(power to direct restructuring of business or submission of resolutions for
a transfer of society's business to a company when society is failing to comply
with principal purpose or the lending or funding nature limits);
(b) section 42B(1) (power to direct transfers
of engagements or business), other than a direction where the giving of the
direction and its terms have been agreed with the society concerned;
(16)
to
issue a prohibition order under section 36A of the Building Societies Act
1986;
(17)
to
determine the appropriate Part
IV permission for the successor society on an amalgamation:
(a) under section 93 of the Building Societies
Act 1986 between building
societies each of whom has a Part IV permission to accept deposits; or
(b) under section 85 of the Friendly Societies
Act 1992 between friendly
societies each of whom has a Part IV permission;
in a case where
it has not been possible to agree the terms of the proposed permission with the successor society; (18)
to
give a direction under any of the following sections of the Friendly Societies
Act 1992:
(a) sections 54 and 55 (power to direct a
society to refrain from taking steps where certain activities have become
disproportionate);
(b) section 90 (power to direct a transfer
of engagements);
(19) not to include,
or to remove, an appointed representative from the Register, or to refuse an application to
revoke such a determination;
(22) to publish a
statement censuring an issuer of transferable securities,
a person offering transferable securities to
the public or a person requesting
the admission of transferable
securities to trading on a regulated
market;
(23) to refuse an
application for approval as a sponsor;
(25) to publish a
statement censuring a sponsor; and
- 01/07/2005
DEC 4.1.5
See Notes
In
DEC
4.1.4 G(2),
(3) and (7), making a fundamental
change to the nature of a permission means:
(2) refusing an application to include a
type of activity or investment;
or
(3) restricting a firm from taking on new business, dealing
with a particular category of client or
handling client money by
imposing a limitation or requirement, or refusing
an application to vary or cancel such a limitation or requirement; or
(4) imposing or varying an assets requirement
(as defined in section 48(3) of the Act (Prohibitions
and restrictions)), or refusing an application to vary or cancel such a requirement.
- 01/12/2004
Decisions to be taken by executive procedures
DEC 4.1.6
See Notes
Statutory
notice
decisions and statutory noticeassociated
decisions which are not taken by the RDC, will be taken under executive procedures.
- 01/12/2004
Examples of allocation of decision making
DEC 4.1.7
See Notes
Examples of matters decided by the RDC include:
(1) refusing an application to vary a Part IV permission to
carry on insurance business or
to accept deposits for
the first time; in these cases, the firm will normally have been required to
complete parts of the application pack (SUP 6.4.14 G);
(2) refusing an application to vary a Part IV permission to
carry on regulated activities with private customers for
the first time;
(3) refusing an application to vary a Part IV permission to
remove a requirement to
enable the firm to
hold or control client
money for the first time; and
(4) varying a Part IV permission on the FSA's own initiative by removing a regulated activity from
a firm'spermission.
- 01/12/2004
DEC 4.1.8
See Notes
Examples of matters decided by executive procedures (where
the FSA decides
or is required to use the statutory powers in question rather than to achieve
the action required in other ways, for example through individual guidance or securing the
agreement of a firm to
take action on a voluntary basis) include:
(1) imposing a requirement that a firm submit regular reports covering, for
example, trading results, management accounts, customer complaints, connected party transactions
(SUP 7.4.2 G (1)), or varying such a requirement, on the FSA's own initiative, or refusing an application
by the firm to
vary such a requirement;
(2) imposing a requirement that a firm submit a business plan (SUP 7.3.3 (3)),
or varying such a requirement,
on the FSA's own
initiative, or refusing an application by the firm to vary such a requirement;
(3) setting prudential limits through a requirement, for example
on large exposures,
foreign currency exposures or
liquidity gaps (SUP 7.3.3 (2)), or varying such a requirement, on the FSA's own initiative,
or refusing an application by the firm to
vary such a requirement;
(4) imposing a requirement that a firm maintain a particular amount or type
of financial resources (SUP 7.3.3 (5)), or varying such
a requirement,
on the FSA's own
initiative, or refusing an application by the firm to vary such a requirement;
(4A) in relation
to a financial conglomerate,
using the own-initiative
power to apply one of the methods for calculating capital adequacy
in Annex 1 of the Financial
Groups Directive (see PRU 8.4.50R (Capital adequacy
requirement: Use of Part IV permission to apply Annex 1 of the Financial Groups
Directive)) or to impose a reporting requirement under SUP 16
(Reporting requirements);
(5) refusing an application to vary a Part IV permission, or to restrict a Part IV permission on the grant of a variation
(by imposing a limitation or requirement which was
not applied for, or by specifying a narrower description of regulated activity than that applied for),
in a way that would not make a fundamental change (see DEC
4.1.5 G) to the nature of the Part IV permission that would have been held
had the application been granted in full (indefinitely, or for a limited period);
(6) objecting to the acquisition or increase
of control under
section 186 of the Act (Objection
to acquisition of control), objecting to existing control under section 187 of the Act (Objecting to existing
control), or attaching conditions to an approval to a change in control under section
185 of the Act (Conditions
attached to approval);
(7) refusing a request for an authorisation order for
an operator's proposed AUT or ICVC (if the operator
is an operator of an existing AUT or ICVC), refusing approval
of a scheme becoming
a recognised scheme authorised
in a designated territory under section 270 of the Act or refusing an application in respect
of a proposed individually recognised overseas scheme under section 272 of the Act;
(9) suspending trading
in a financial instrument;
(11) exercising any
of the powers in sections 87K or 87L of the Act in respect of an infringement of any applicable
provision;
- 01/07/2005
DEC 4.2
The Regulatory Decisions Committee
- 01/12/2004
DEC 4.2.1
See Notes
- 01/12/2004
DEC 4.2.2
See Notes
The RDC comprises
a Chairman, one or more Deputy Chairmen, and other members.
- 01/12/2004
DEC 4.2.3
See Notes
The RDC is
a body outside the FSA's management
structure. Apart from the Chairman, none of the members of the RDC is an FSA employee. The members
represent the public interest and comprise:
(1) current and recently retired practitioners
with financial services industry skills and knowledge; and
(2) non-practitioners.
- 21/11/2002
DEC 4.2.4
See Notes
- 01/12/2004
Appointment and removal of members of the RDC
DEC 4.2.5
See Notes
The Chairman of the RDC is appointed by the FSA Board on the recommendation of an independent
group established by the Board for that purpose. A non-executive member of
the FSA Board
chairs the independent group. The FSA Board
also appoints all other members of the RDC,
including its Deputy Chairman or Deputy Chairmen, on the recommendation of
the Chairman of the RDC.
- 01/12/2004
DEC 4.2.6
See Notes
All members of the RDC are appointed for fixed periods.
- 01/12/2004
DEC 4.2.7
See Notes
- 01/12/2004
Constitution and procedure of the RDC
DEC 4.2.8
See Notes
The RDC will
meet as a full committee or in panels. Except in an urgent supervisory notice case, where the Chairman
or a Deputy Chairman and, where possible, any one other member of the RDC will make a decision
(see DEC 4.5.7 G (2)), each meeting of
the RDC will
include:
(1) its Chairman or a Deputy Chairman (who
will chair the meeting); and
(2) at least two other members.
- 01/12/2004
DEC 4.2.9
See Notes
However, the composition and size of
panels of the RDC,
and the frequency of their meetings, may vary depending on the nature of the
particular matter under consideration.
- 01/12/2004
DEC 4.2.10
See Notes
(1) If a member of the RDC has a potential conflict of interest
in any matter before the RDC he
will disclose the conflict to the Chairman of the RDC (or if he is the Chairman of the RDC, to the Chairman or
Deputy Chairman of the FSA).
He will also disclose the conflict to the RDCSecretariat.
(2) If the Chairman of the RDC (or where appropriate the Chairman or
Deputy Chairman of the FSA)
considers it reasonable and appropriate, he will require the member of the RDC to stand down from
consideration of that particular matter. The Chairman of the RDC (or Chairman or Deputy
Chairman of the FSA)
may ask another member of the RDC to
assist him in considering the potential conflict.
- 01/12/2004
DEC 4.2.11
See Notes
The RDCSecretariat will record and document
all disclosures of potential conflicts of interest and the steps taken to
manage them.
- 01/12/2004
DEC 4.2.12
See Notes
- 01/12/2004
DEC 4.2.13
See Notes
- 01/12/2004
Consideration of previous breaches
DEC 4.2.15
See Notes
FSA staff
are entitled to put to the RDC the
previous disciplinary record of a person,
including any previous breach of the Act,
the Principles, or other rules (including the record prior to the Act). FSA staff may also draw to the RDC's attention the compliance
history of a person,
including that under previous legislation.
- 01/12/2004
DEC 4.2.16
See Notes
The RDC may
not consider any of the matters in DEC
4.2.15 G for
the purpose of proving a later breach. The matters in DEC
4.2.15 G may be considered when determining whether
to take action or, where appropriate, as one of the factors described in ENF
13.3.3 G, in determining the level of the financial
penalty.
- 01/12/2004
Administrative procedure for representations
DEC 4.2.18
See Notes
The
FSA
will fix a date or
dates for a meeting to consider the representations and to decide:
(1) whether to take the action proposed;
(2) if the action has been taken, whether
to rescind the action; and
(3) in either case, whether to take the action
in a different way.
- 01/12/2004
DEC 4.2.19
See Notes
- 01/12/2004
DEC 4.3
Executive procedure for statutory notice decisions and statutory notice associated decisions
- 01/12/2004
Who makes the decision?
DEC 4.3.1
See Notes
All statutory
notice decisions (and statutory notice associated
decisions) under executive
procedures are made under authority delegated by the FSA Board. The FSA's senior executive
committee may from time to time determine that particular categories of statutory notice decision (and statutory notice associated
decisions) which may be made by executive procedures will be made by a senior staff committee.
Alternatively, a senior
staff committee may take such decisions if referred to it by FSA staff (see DEC 4.3.7 G (2)). Otherwise, such
decisions will be made by an individual FSA staff
member.
- 01/12/2004
Separation of functions
DEC 4.3.2
See Notes
Section 395(2) of the Act (The FSA's procedures) requires that the FSA's procedure for the
giving of statutory notices must
be designed to secure that "the decision which gives rise to the obligation
to give any such notice is taken by a person not directly involved in establishing
the evidence on which that decision is based".
- 01/12/2004
DEC 4.3.3
See Notes
In accordance with section 395(2) of
the Act,statutory
notice decisions taken under executive procedures will not be taken by
staff directly involved in establishing the evidence on which that decision
is based, except in accordance with section 395(3) of the Act (see DEC
4.3.17 G to DEC
4.3.19 G).
- 01/12/2004
Decision making by an individual FSA staff member
DEC 4.3.4
See Notes
If an individual FSA staff member makes a statutory notice decision (or statutory noticeassociated
decision) the decision will be:
(1) made by an executive director of the FSA Board, or his delegate
(who will be of at least the level of associate);
(2) on the recommendation of an FSA staff member of at
least the level of associate; and
(3) with the benefit of legal advice from
an FSA staff
member of at least the level of associate.
- 01/12/2004
DEC 4.3.5
See Notes
The individual who takes a decision under executive procedures is
accountable to the FSA Board
directly (if an executive director) or otherwise through line management responsible
for the decision concerned.
- 01/12/2004
DEC 4.3.6
See Notes
An FSA staff
member who considers that a statutory
notice decision (or statutory noticeassociated
decision) should be taken above his own level is free to refer
that decision to a more senior level. If an FSA staff member consults another staff member
about a decision, the decision remains the independent decision of the FSA staff member who consults
his colleague, unless it is agreed that the decision should instead be taken
by the colleague, and the colleague has the delegated authority to do so.
- 01/12/2004
DEC 4.3.7
See Notes
If an individual responsible for a decision
by executive procedures (or
a more senior FSA staff
member with responsibilities in relation to the decision concerned) considers
that it warrants collective consideration, the individual may:
(1) take the decision himself, following
consultation with other FSA staff
members, as above; or
(2) refer it to a senior staff committee, which will take
the decision itself.
- 01/12/2004
DEC 4.3.7A
See Notes
The following decisions will be taken
by an individual FSA staff
member under executive
procedures:
(2) the suspension
of trading in a financial
instrument;
(4) the exercise
of any of the powers in sections 87K or 87L of the Act in respect of a breach of any applicable
provision;
- 01/07/2005
Decision making by a senior staff committee
DEC 4.3.8
See Notes
A senior
staff committee, other than the FSA's senior executive committee, will consist
of such FSA staff
members as the FSA's senior
executive committee, may from time to time determine. The FSA's senior executive committee may authorise
the chairman of a senior
staff committee to select its other members.
- 21/11/2002
DEC 4.3.9
See Notes
- 18/10/2001
DEC 4.3.10
See Notes
A senior
staff committee may operate through standing or specific sub-committees
to consider particular decisions or classes of decision, for which accountability
will lie through the committee. Each meeting of a senior staff committee, or sub-committee,
will include:
(1) an individual with authority to act as
its chairman; and
(2) at least two other members.
- 01/12/2004
DEC 4.3.11
See Notes
A senior
staff committee will operate on the basis of a recommendation
from an FSA staff
member of at least the level of associate, and with the benefit of legal advice
from an FSA staff
member of at least the level of associate.
- 01/12/2004
DEC 4.3.12
See Notes
If FSA staff
recommend action be taken and they consider that the decision falls within
the responsibility of a senior
staff committee (or sub-committee):
(1) in general, but subject to the need to
act swiftly in urgent cases, the FSA staff's
recommendation will go before the senior
staff committee (or sub-committee);
(2) in an urgent case, if, in FSA staff's opinion, the
action proposed should occur before it is practicable to convene a meeting
of the senior staff committee (or
sub-committee), the FSA staff's
recommendation may be considered by the senior staff committee's chairman
or a deputy chairman and, where possible, but subject to the need to act swiftly,
one other member of the senior
staff committee;
(3) in an exceptionally urgent case, if in
the FSA staff's
opinion:
(a) the action should be taken before a recommendation
to the chairman or a deputy chairman of the senior staff committee could be made; and
(b) an urgent decision on the proposed action
is necessary to protect the interests of consumers;
the FSA staff's recommendation
will be considered and the decision made by a member of the FSA's executive of at least director of division
level.- 01/12/2004
General
DEC 4.3.13
See Notes
A statutory
notice given under executive
procedures will identify the decision maker. A decision to give
a
decision notice or second supervisory notice will
normally be made by the same decision maker (that is, the individual or committee)
who made the decision to give the
warning notice or first supervisory notice.
- 01/12/2004
DEC 4.3.14
See Notes
If a firm wishes to make representations
in response to a warning
notice or first supervisory
notice, those representations will be received in accordance
with DEC 4.4.
- 01/12/2004
DEC 4.3.15
See Notes
The decision maker will ensure that a
record is kept of:
(1) who took the decision;
(2) any representations to the decision maker;
(3) the material considered by the decision
maker;
(4) the nature of the decision;
(5) the reasons for the decision; and
- 01/12/2004
DEC 4.3.16
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 immediately responsible
for the decision. In the case of decisions by a senior staff committee, any conflict of
interest must be declared to the chairman of the committee (or, if the person
with the conflict is the chairman, to any member of the FSA's senior executive committee or, if the person with the conflict
is the chairman of the FSA's senior
executive committee, to the Deputy Chairman of the FSA. He will also disclose the conflict to
the secretariat to the senior
staff committee (or FSA's senior
executive committee)). The individual to whom the conflict of interest is
declared may ask another person to
assist him in considering the potential conflict, and will decide whether
that conflict precludes the involvement of the FSA staff member in making a decision.
- 21/11/2002
DEC 4.3.16A
See Notes
The
secretariat to the senior
staff committee, or to the FSA's senior
executive committee, or to the FSA Board,
as appropriate, will record and document all disclosures of potential conflicts
of interest and the steps taken to manage them.
- 21/11/2002
Section 395(3) decisions
DEC 4.3.17
See Notes
Under section 395(3) of the Act, the FSA's procedure may permit a decision which
gives rise to an obligation to give a supervisory
notice to be taken by a person involved in establishing the
evidence on which the decision is based if:
(1) the FSA considers
that, in a particular case, it is necessary in order to protect the interests
of consumers; and
(2) the person taking the decision is of
a level of seniority laid down by the procedure.
- 01/12/2004
DEC 4.3.18
See Notes
The FSA expects
to exercise the power provided by section 395(3) only in exceptional cases.
This means cases in which the FSA believes
action is needed to protect the interests of consumers in the face of a material
threat to those interests, but in which the requirements for separation cannot
be met: for example where the notice needs to take immediate effect in order
to protect the interests of consumers.
- 01/12/2004
DEC 4.3.19
See Notes
- 01/12/2004
DEC 4.4
Representations
- 01/12/2004
DEC 4.4.1
See Notes
(1) Any warning
notice or first supervisory
notice will contain a statement that the person concerned will have a certain amount
of time in which to make representations to the decision maker. In the case
of a first supervisory
notice the person concerned
may make representations whether or not the matter to which the notice relates
has been referred to the Tribunal.
(2) If a second supervisory notice is given where the decision
maker has decided to take action different from that which was proposed in
the first supervisory
notice, the second supervisory
notice will provide a similar statement about the right to make
representations.
- 01/12/2004
DEC 4.4.2
See Notes
In the case of a warning notice, section 387(2) of the Act requires that the warning notice must specify
a reasonable period for the making of representations. This must be at least
28 days. The Act does
not specify a minimum period that the FSA must
give for making representations for supervisory
notices.
- 01/12/2004
DEC 4.4.3
See Notes
In deciding on the period to make representations,
the decision maker will have regard to the circumstances of each case, including
the nature of the proposed action and its likely effect on the person concerned. The
decision maker will have particular regard to the risk to the FSA's regulatory objectives of any delay in imposing
proposed action. The period for representations will normally be 28 days from
the date when the person receives
the notice, subject to his right to seek an extension of time.
- 01/12/2004
Request for an extension of time
DEC 4.4.4
See Notes
(1) After receiving the warning notice or first supervisory notice, if the person concerned considers
that its stated period for representations is too short, then he may, within
14 days of receiving the notice, request the FSA in writing for more time. In the case
of a warning notice,
this may be appropriate, for example, if a person has entered or wishes to enter into
settlement discussions with FSA staff.
(2) In accordance with section 387(3) of
the Act and
other relevant sections of the Act,
the decision maker may extend the period of time for representations specified
in the warning notice or supervisory notice.
- 01/12/2004
DEC 4.4.5
See Notes
Requests for an extension of time will
be considered by the decision maker who will notify the recipient of the notice
promptly whether the request has been accepted or not.
- 01/12/2004
Written representations
DEC 4.4.6
See Notes
Any written representations should be
sent to the FSA at
the address stated in the warning
notice or supervisory
notice.
- 01/12/2004
Oral representations
DEC 4.4.7
See Notes
If he so chooses, a person who receives a warning notice or first supervisory notice may make oral representations
to the decision maker and attend a meeting for that purpose.
- 01/12/2004
DEC 4.4.8
See Notes
If the person wishes to make oral representations,
he should send a written notification of this to the FSA at the address stated in the warning notice or supervisory notice. The
notification should be made at least five business days before the end of the period
for representations specified in the notice. The notification should specify
the matters on which the person wishes
to make oral representations, include an estimate of how much time the person expects the representations
to take, and provide the names of any representatives appointed to attend
the meeting at which the representations will be made. If after notifying
the FSA of
his intention to make oral representations, the person chooses not to make those representations,
the decision maker will nevertheless decide the matter.
- 18/10/2001
DEC 4.4.9
See Notes
A person may
appoint a representative of his choice (who may be legally qualified) to attend
the meeting at which oral representations will be made. The representative
may make or assist in making the representations.
- 01/12/2004
DEC 4.4.10
See Notes
The decision maker will specify a time
as soon as is reasonably possible after receiving the notification for receiving
the oral representations. The decision maker may specify the place where he
will receive the representations and may specify that the representations
will be received in private. The decision maker may limit the type, length
and content of any representations. The decision maker may ask the person or his representative
at the meeting to clarify any issue arising out of the representations and
may require the person,
and any representatives, to leave the meeting after they have made their representations.
- 01/12/2004
DEC 4.4.11
See Notes
DEC
4.4.13 G and DEC
4.4.14 G explain the procedure
where no representations are received or made.
- 01/12/2004
Third parties
DEC 4.4.12
See Notes
DEC 4.4 applies
also to a third party who has received a copy of a warning notice, in relation to those matters
affecting the third party.
- 01/12/2004
Default procedures
DEC 4.4.13
See Notes
If the FSA receives no response or representations
within the period specified in a warning
notice, the decision maker may regard as undisputed the allegations
or matters in the warning
notice. In such cases, a decision
notice will be given accordingly. A person who has received a decision notice and has not previously made
any response or representations to the FSA,
may, nevertheless, refer the FSA's decision
to the Tribunal as
described in DEC 5.1.
- 21/11/2002
DEC 4.4.13A
See Notes
If
the FSA receives
no response or representations within the period specified in a first supervisory notice, the FSA will not give a second supervisory notice. The
outcome depends on when the action took or takes effect (as stated in the
notice). If the action:
(1) took effect immediately, or on a specified
date which has already passed, it continues to have effect (subject to any
decision on a referral to the Tribunal);
or
(2) was to take effect on a specified date
which is still in the future, it takes effect on that date (subject to any
decision on a referral to the Tribunal);
or
(3) was to take effect when the matter was
no longer open for review,
it takes effect when the period to make representations (or the period for
referral to the Tribunal,
if longer) expires, unless the matter has been referred to the Tribunal.
- 21/11/2002
DEC 4.4.14
See Notes
In exceptional cases, the decision maker
may permit representations from a person who
has received a decision
notice (or a second supervisory
notice) given in accordance with DEC 2.3 (or DEC
3.1.8 G to DEC
3.1.10 G) (or against whom action, detailed in a first supervisory notice, has taken effect as
described in DEC
4.4.13A G),
and shows on reasonable grounds that he did not receive the warning notice (or first supervisory notice), or that he had reasonable
grounds for not responding within the specified period. In these circumstances,
the decision maker may decide to give a notice
of discontinuance (DEC 2.3.8 G to DEC 2.3.9 G) or a further decision
notice (or a written notice or a supervisory notice).
- 21/11/2002
DEC 4.5
Delegation of RDC decisions and modified RDC procedures
- 01/12/2004
DEC 4.5.1
See Notes
The making of the following types of statutory noticedecisions and statutory notice associated decisions falling
within DEC
4.1.4 G (Decisions to be taken
by the RDC)
will be discharged, on behalf of the RDC,
by the Chairman of the RDC or FSA staff, so that they
will be made by modified rather than full RDC procedure:
(1) in relation to warning notices and decision notices:
(a) those relating to financial penalties
for late submission of reports (see DEC
4.5.2 G to DEC
4.5.6 G);
(b) those relating to the revocation of recognition
of section 270 or 272 recognised
schemes, where there is a common understanding between the scheme
management and the FSA about
the need for revocation (see DEC
4.5.14 G to DEC
4.5.15 G);
(2) in relation to supervisory notices:
(b) those relating to the use of the FSA's own-initiative power and other cases involving
the imposition of requirements,
where there is a common understanding between the FSA and the person concerned about the need for the action
(see DEC
4.5.9 G to DEC
4.5.13 G).
- 01/12/2004
Financial penalties for late submission of reports
DEC 4.5.2
See Notes
When the FSA decides whether to impose a financial
penalty on a firm for
the late submission of a report (regardless of the period of delay), FSA staff will report
on the late submission to at least one other member of staff who is:
(1) at a level senior to that of the member
of staff who reports on the late submission and on the reasons for it; and
(2) not directly involved in the day-to-day
supervision of the firm concerned,
or in establishing the evidence on which the decision is based.
- 11/04/2002
DEC 4.5.3
See Notes
FSA staff
at the appropriate level of seniority will consider the report about the late
submission. They will then decide whether a financial penalty is appropriate
and, if so, its amount. If they decide a penalty is appropriate, the FSA will give a warning notice.
- 01/12/2004
DEC 4.5.4
See Notes
If the firm makes representations in relation to
the penalty stated in the warning
notice, the matter will be referred to the Chairman or Deputy
Chairman of the RDC.
The Chairman or Deputy Chairman of the RDC will
decide whether to confirm the penalty stated in the warning notice or that the penalty should
be of a different amount and, if so, give a decision notice.
- 01/12/2004
DEC 4.5.5
See Notes
If the firm makes no representations, by the time
a decision is to be made about the giving of a decision notice, then the decision maker
may regard the matters in the warning
notice as undisputed. A decision
notice will be given accordingly.
- 21/11/2002
DEC 4.5.6
See Notes
If the firm objects to the decision notice, it may refer the matter
to the Tribunal.
The right to refer a matter to the Tribunal is
outlined in DEC 5.1.
- 01/12/2004
Supervisory notices: urgent cases
DEC 4.5.7
See Notes
If FSA staff
recommend action be taken and they consider that the decision is the RDC's responsibility:
(1) in general, but subject to the need to
act swiftly in urgent cases, the FSA staff's
recommendation will go before an RDC panel;
(2) in an urgent case, if, in FSA staff's opinion, the
action proposed should occur before it is practicable to convene an RDC panel, the FSA staff's recommendation
will be considered by the RDC's Chairman
or a Deputy Chairman of the RDC and,
where possible, but subject to the need to act swiftly, one other RDC member;
(3) in an exceptionally urgent case, where
in the FSA's opinion:
(a) the action should be taken before a recommendation
to the Chairman or a Deputy Chairman of
the RDC can
be made; and
(b) an urgent decision on the proposed action
is necessary to protect the interests of consumers;
the FSA staff's recommendation
will be considered by a member of the FSA's executive
of at least director of division level. In these circumstances, the FSA will ensure as far
as possible that the executive making the decision was not involved in establishing
the evidence on which the decision is based.- 18/10/2001
DEC 4.5.8
See Notes
If the executive making the decision
has been involved in establishing the evidence on which the decision is based,
and a notice is given on the grounds of urgency, this will be in accordance
with DEC
4.3.17 G to DEC
4.3.19 G.
- 01/12/2004
Supervisory notices: non-urgent cases
DEC 4.5.9
See Notes
In certain other cases, including cases
relating to collective
investment schemes (see DEC
4.5.14 G to DEC
4.5.15 G), FSA staff may be in a position to inform
the person concerned
of their concerns, and of the action they are considering, before they begin
to exercise supervisory
notice procedures. If the person concerned
consents to the action at that stage, FSA staff
may decide to use the modified decision making procedure in DEC
4.5.10 G to DEC
4.5.13 G.
- 01/12/2004
DEC 4.5.10
See Notes
- 01/12/2004
DEC 4.5.11
See Notes
FSA staff
at the appropriate level of seniority will consider the recommendations. If
they are satisfied that the person concerned
agrees to the recommended action, they will consider whether the FSA should give a first supervisory notice (see DEC
3.1.3 G to DEC
3.1.7 G).
- 01/12/2004
DEC 4.5.12
See Notes
If FSA staff
decide to give the first supervisory
notice and the person concerned
accepts its terms, the FSA will
then consider whether to give a second supervisory
notice (see DEC
3.1.8 G to DEC
3.1.10 G) confirming the decision.
- 01/12/2004
DEC 4.5.13
See Notes
The FSA will
only give the second supervisory
notice when it is satisfied that the person concerned accepts the terms of the
first supervisory notice,
and the circumstances of the case have not materially changed since that notice
was given. If FSA staff
are not satisfied, or circumstances of the case have changed, they will refer
the possible giving of a second supervisory
notice to the RDC.
In such cases the RDC will
follow the process in DEC 3.1.8G
to DEC 3.1.10G.
- 01/12/2004
Modified procedures in collective investment scheme cases
DEC 4.5.14
See Notes
In DEC
4.5.15 G,
the term "scheme management" refers:
- 01/12/2004
DEC 4.5.15
See Notes
In certain cases where it is proposing to exercise its powers under section 257 (Directions), 279 (Revocation of recognition) or 281 (Directions) of the Act or under regulation 23 or 25 of the OEIC regulations, the FSA may be in a position to inform the scheme management of its concerns, and of the action it is considering, before it exercises those powers. Alternatively, the scheme management may request the FSA to exercise one of the powers. For example, the manager and the trustee of an AUT may ask the FSA to give a direction under section 257(2)(a) for the suspension of the issue and redemption of units because of a temporary problem in valuing the property subject to the scheme. If there is a common understanding between the FSA and all the members of the scheme management about the need for the exercise of the power in question at that stage (that is, before the FSA begins to exercise the statutory procedures), the FSA may:
- (1) in the case of the exercise of its powers under sections 257 or 281 or under regulation 25, decide to use the modified decision making procedure for non-urgent supervisory notices in DEC 4.5.9 G to DEC 4.5.13 G; or
- (2) in the case of the exercise of its powers under section 279 or regulation 23, decide to use a modified decision making procedure under which the matter will be delegated to FSA staff of an appropriate level of seniority. The procedure will be as set out in DEC 4.5.9 G to DEC 4.5.13 G but adapted to be appropriate for a case involving a warning notice and decision notice.
- 01/12/2004
DEC 4.6
Decisions to apply to the civil courts and to prosecute criminal offences
- 01/12/2004
DEC 4.6.1
See Notes
A decision to begin, or discontinue,
proceedings using the powers listed in DEC
1.1.3 G will be made by
the RDC Chairman
or, in an urgent case and if the Chairman is not available, by an RDC Deputy Chairman and
where possible, but subject to the need to act swiftly, one other RDC member.
- 01/12/2004
DEC 4.6.2
See Notes
In an exceptionally urgent case the matter
will be decided by the director of Enforcement or, in his absence, another
member of the FSA's executive
of at least director of division level. An exceptionally urgent case in these
circumstances is one where FSA staff
believe that a decision to begin proceedings using the powers in DEC
1.1.3 G:
(1) should be taken before it is possible
to follow the procedure described in DEC
4.6.1 G;
and
(2) is necessary to protect the interests
of consumers or potential consumers.
- 01/12/2004
DEC 4.6.2A
See Notes
Decisions
to prosecute for criminal offences under the legislation listed in DEC
1.1.4 G may be taken by the procedure described in DEC
4.6.1 G and DEC
4.6.2 G, or alternatively may be taken under executive
procedures.
- 21/11/2002
DEC 4.6.2B
See Notes
In
determining which procedure should be followed in deciding to prosecute for
an offence under the legislation listed in DEC
1.1.4 G, the FSA will have regard to
the seriousness of the offence involved, the size and profile of the defendant
and the complexity of the issues. The less serious the offence and the less
complex the issues, the more likely the decision to prosecute will be taken
under executive procedures.
- 21/11/2002
DEC 4.6.3
See Notes
Decisions to bring proceedings using
the powers in DEC
1.1.3 G do not involve
any of the procedures relating to the giving of statutory notices including the procedures
described in DEC 4.4 relating
to representations. Further details about the FSA's policy and procedures in the use of
the powers to apply to the civil courts for injunctions, restitution orders, insolvency orders, collective investment scheme related
orders and the powers to prosecute criminal offences are contained in ENF 6 (Injunctions), ENF 9 (Restitution and redress), ENF 10 (Insolvency proceedings and orders against debt
avoidance), ENF
16 (Collective investment
schemes) and ENF 15 (Prosecution of criminal
offences) respectively.
- 01/12/2004