DEPP 5
Settlement decision procedure
DEPP 5.1
Settlement decision makers
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Introduction
DEPP 5.1.1
See Notes
(1) A person subject to enforcement action may agree to a financial penalty or other outcome rather than contest formal action by the FSA.
(2) The fact that he does so will not usually obviate the need for a statutory notice recording the FSA's decision to take that action. Where, however, the person subject to enforcement action agrees not to contest the content of a proposed statutory notice, the decision to give that statutory notice will be taken by senior FSA staff.
(3) The decision will be taken jointly by two members of the FSA's executive of at least director of division level (the "settlement decision makers").
(4) One of the directors taking the decision will usually be, but need not be, the director of Enforcement. (In exceptional cases, the director of Enforcement may have been directly involved in establishing the evidence on which the decision is based and would not therefore be able to participate (see section 395(2) of the Act).)
(5) "Statutory notice" for these purposes:
(a) means any statutory notice the giving of which would otherwise require a decision by the RDC;
(b) includes a statutory notice associated decision.
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Procedure: general
DEPP 5.1.2
See Notes
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DEPP 5.1.3
See Notes
Settlement discussions may take
place at any time during the enforcement process if both parties agree. This
might be before the giving of a warning notice,
before a decision notice, or
even after referral of the matter to the Tribunal.
But the
FSA
would
not normally agree to detailed settlement discussions until it has a sufficient
understanding of the nature and gravity of the suspected misconduct or issue
to make a reasonable assessment of the appropriate outcome. Settlement after
a decision notice will be rare.
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DEPP 5.1.4
See Notes
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Procedure: participation of decision makers in discussions
DEPP 5.1.5
See Notes
(1) The settlement
decision makers may, but need not, participate in the discussions
exploring possible settlement.
(2) If the settlement
decision makers have not been involved in the discussions, but
an agreement has been reached, they may ask to meet the relevant
FSA
staff or the person concerned
in order to assist in the consideration of the proposed settlement.
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DEPP 5.1.6
See Notes
The terms of any proposed settlement:
(2) may refer to a draft of the proposed statutory notices setting out the facts
of the matter and the
FSA's
conclusions;
(3) may, depending upon the stage in
the enforcement process at which agreement is reached, include an agreement
by the person concerned to:
(a) waive and not exercise any rights
under sections 387 (Warning notices) and 394 (Access to Authority material)
of the Act to notice of, or access
to, material relied upon by the
FSA
and any secondary material which might undermine the
FSA
decision to give the statutory notice;
(b) waive and not exercise any rights
under section 387 of the Act or
otherwise to make representations to the RDC in
respect of a warning notice or
first supervisory notice;
(c) not object to the giving of a decision notice before the expiry of the 28 day period after the giving of
a warning notice specified
under section 387 of the Act;
(d) not dispute with the
FSA
the facts and matters set out in a warning
notice, decision notice, supervisory notice or final
notice and to waive and not exercise any right under section
208 (Decision notice) of the Act to
refer the matter to the Tribunal.
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DEPP 5.1.7
See Notes
The settlement
decision makers may:
whether or not the settlement decision makers have met with the relevant FSA staff or the person concerned.
(1) accept the proposed settlement
by deciding to give a statutory notice based
on the terms of the settlement; or
(2) decline the proposed settlement;
whether or not the settlement decision makers have met with the relevant FSA staff or the person concerned.
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DEPP 5.1.8
See Notes
(1) Where the settlement
decision makers decline to issue a statutory
notice despite the proposed settlement, they may invite
FSA
staff
and the person concerned to
enter into further discussions to try to achieve an outcome the settlement decision makers would be prepared
to endorse.
(2) However, if the proposed action
by the
FSA
has
been submitted to the RDC for
consideration, it will be for the RDC to
decide:
(a) whether to extend the period for
representations in response to a warning
notice or first supervisory
notice; or
(b) if representations have been made
in response to a warning notice or first supervisory notice, whether to proceed to
give a decision notice or second supervisory notice.
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Settlement by mediation
DEPP 5.1.9
See Notes
The
FSA
and other parties may agree to mediation as a way of facilitating
settlement in appropriate cases.
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Third party rights
DEPP 5.1.10
See Notes
(1) DEPP 2.4 sets out the FSA's approach to giving third parties copies of statutory notices pursuant to section 393 (Third party rights) of the Act.
(2) The decision to give a warning notice or a decision notice to a third party is a statutory notice associated decision.
(3) In cases therefore where the decision to give a warning notice or decision notice is taken by settlement decision makers, those decision makers will decide whether a copy of the notice should be given to a third party in accordance with section 393 of the Act. Any representations made by the third party in response to a warning notice will be considered by the settlement decision makers
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