DEC 1
Application,
Purpose and Introduction
DEC 1.1
Application and Purpose
- 01/12/2004
Application
DEC 1.1.1
See Notes
This
manual gives guidance on
the FSA's decision
making and other procedures for giving statutory
notices listed in DEC 2 Annex 1 G and DEC
3 Annex 1 G. This manual also gives guidance on the FSA's procedure for using its powers under
Part XXIV of the Act (Insolvency),
Part XXV of the Act (Injunctions
and restitution), Part XXVII of the Act (Criminal
Offences) and the Unfair
Terms Regulations. It also gives guidance on the FSA's procedures for using certain similar
powers with respect to insolvency and criminal offences under the Building
Societies Act 1986, the Friendly Societies Acts 1974 and 1992, the Credit
Unions Act 1979 and the Industrial and Provident Societies Act 1965. It is
relevant to firms, approved persons, applicants
for Part IV permission, persons for whom an application
for approval under section 59 of the Act has
been made, and other persons, whether or not they are regulated
by the FSA. The UKLA's procedure for
giving statutory notices under
Part VI of the Act (Official
listing) is set out in the listing
rules and related guidance.
- 01/04/2003
Purpose
DEC 1.1.2
See Notes
Section 395 of the Act (The FSA's procedures) requires the FSA to publish a statement
of its procedure for the giving of statutory
notices. The purpose of the Decision making manual (DEC) is to fulfil this
obligation.
- 21/11/2002
DEC 1.1.3
See Notes
DEC
4.6.1 G and DEC
4.6.2 G set
out the FSA's policy
on the procedure to be followed:
(1) if the FSA decides to use its:
(a) powers to apply to the civil courts for
insolvency orders, injunctions, restitution orders and collective investment scheme related orders;
or
(b) powers to prosecute criminal offences;
and
(2) if the FSA decides to discontinue any proceedings
begun by the use of these powers.
- 21/11/2002
DEC 1.1.4
See Notes
DEC
4.6.2A G and DEC
4.6.2B G set out the FSA's policy on the procedure
to be followed:
(1) if the FSA decides to use its powers to prosecute
criminal offences under the Building Societies Act 1986, the Friendly Societies
Acts 1974 and 1992, the Credit Unions Act 1979 and the Industrial and Provident
Societies Act 1965, in each case as amended; and
(2) if the FSA decides to discontinue any proceedings
begun by the use of these powers.
- 21/11/2002
DEC 1.2
Introduction
- 01/12/2004
DEC and the other manuals
DEC 1.2.1
See Notes
The Authorisation manual (AUTH), the Supervision
manual (SUP),
the Enforcement manual (ENF)
and the Decision making manual (DEC)
form the regulatory processes part of the Handbook:
(1)
AUTH sets
out the relationships between the FSA and
applicants for Part IV
permission and persons wishing
to exercise EEA rights, Treaty rights or UCITS directive rights;
(2)
SUP sets
out the relationship between the FSA and authorised persons (referred
to in the Handbook as firms). As a general rule,
material that is of a continuing relevance after authorisation is in SUP;
(3)
ENF describes
the FSA's enforcement
powers under the Act and
sets out its policies for using those powers; and
(4)
DEC is
principally concerned with, and sets out, the FSA's decision making procedures for decisions
that involve the giving of statutory
notices.
- 01/12/2004
Statutory notices
DEC 1.2.2
See Notes
The Act designates
certain notices as warning
notices, decision
notices or supervisory
notices ('statutory
notices') for which there are certain specified procedures,
actions and protections.DEC
1.2.3 G summarises the statutory
notices and related notices and provides references to where
they are described in the Act.
- 01/12/2004
DEC 1.2.3
See Notes
Summary of statutory and related notices
| Reference to the Act | Notice | Description | Further information |
| Section 387 | Warning notice | A warning notice gives the recipient details about action that the FSA proposes to take and about the right to make representations. | DEC 2.2 |
| Section 388 | Decision notice | A decision notice gives the recipient details about action that the FSA has decided to take. | DEC 2.3.1 G to DEC 2.3.5 G |
| Section 388 | Further decision notice | A further decision notice gives the recipient details about different action from that set out in a decision notice and which the FSA has decided to take concerning the same matter covered by the decision notice . The FSA may give a further decision notice only if the person to whom the original decision notice was given consents. | DEC 2.3.6 G to DEC 2.3.7 G |
| Section 389 | Notice of discontinuance | A notice of discontinuance identifies proceedings set out in a warning notice or decision notice and which are not being taken or are being discontinued. | DEC 2.3.8 G to DEC 2.3.10 G |
| Section 390 | Final notice | A final notice sets out the terms of the action that the FSA has decided on and the date it takes effect. | DEC 2.3.11 G to DEC 2.3.12 G |
| Section 395(13) | Supervisory notices | A supervisory notice gives the recipient details about action that the FSA has taken or proposes to take. | Statutory notice procedure: Supervisory notice procedure |
- 01/12/2004
Decision making on giving statutory notices
DEC 1.2.4
See Notes
The FSA has
different decision making procedures depending on whether or not a statutory notice is given.
- 01/12/2004
DEC 1.2.5
See Notes
Events leading to the giving of a statutory notice are
covered in AUTH, SUP, ENF and COLL or CIS. DEC 2 Annex 1 G and DEC
3 Annex 1 G list the relevant
references.
- 01/12/2004
DEC 1.2.6
See Notes
Decisions whether to give a statutory notice and
decisions associated with the statutory
notice once it has been given (a 'statutory notice associated decision', see DEC
4.1.2 G) will be taken by a 'decision maker'. References
to the 'decision maker' concerning statutory
notice decisions refer to decisions taken by:
- 01/12/2004
DEC 1.2.7
See Notes
DEC 4.1 describes the allocation
of decisions between the RDC and executive procedures. DEC 4.2 provides further information on the RDC. DEC 4.3 provides further information on executive procedures.
- 01/12/2004
Other decisions
DEC 1.2.8
See Notes
The FSA will
make regulatory decisions falling outside section 395 of the Act. These will include
exercise of statutory powers which do not require statutory notices to be given, for example:
when the FSA grants
an application for a Part
IV permission on the terms applied for (such decisions are made by internal
staff procedures as described in AUTH
8.2.5 G to AUTH
8.2.8 G); when the FSA grants other applications;
decisions on applications for waivers;
decisions to give individual guidance;
and decisions generally in the course of the FSA's oversight of regulated institutions.
They also include decisions on recommendations by FSA staff to the RDC.
- 01/12/2004
DEC 1.2.9
See Notes
The FSA's general
policy is that regulatory decisions should be taken at a level of seniority
which is appropriate to the decision having regard to such factors as:
(1) the significance of the decision to those
who would be affected by it;
(2) its novelty in the light of stated policy
and established practice;
(3) the complexity of the relevant considerations;
(4) the range of alternative options; and
(5) the extent to which the facts relating
to the decision are or may be disputed.
- 01/12/2004
DEC 1.2.10
See Notes
The FSA expects
that most decisions will be made by individuals accountable through line management
to the Board within the management structure of the FSA. Where appropriate, decisions will be
made collectively by a group of staff. Decisions will be made within the stated
policies of the FSA and
in accordance with the Act and
other legal requirements.
- 01/12/2004
DEC 2
Statutory notice procedure: Warning notice and decision notice procedure
DEC 2.1
Warning notice and decision notice procedure: Introduction
- 01/12/2004
DEC 2.1.1
See Notes
The Act and certain other enactments requires the FSA, when proposing to exercise its powers in certain circumstances, to use the warning notice and decision notice procedure.
- 21/11/2002
DEC 2.1.2
See Notes
The circumstances to which the warning notice and decision notice procedure in DEC apply are set out in DEC 2 Annex 1 G. Three flowcharts are provided in DEC 2 Annex 2 G to DEC 2 Annex 4 G. These illustrate:
(1) the procedure for giving warning notices and decision notices in the case of applications for Part IV permission, applications for approval under section 59 of the Act (Approval for particular arrangements), applications for variation of permission, and for certain other applications (see DEC 2 Annex 2 G);
(2) the procedure for giving warning notices and decision notices in non-application cases (see DEC 2 Annex 3 G); and
(3) the procedure for giving warning notices and decision notices in the case of notifications of a change in control (see DEC 2 Annex 4 G).
- 01/12/2004
DEC 2.1.3
See Notes
- 01/12/2004
DEC 2.2
Warning notice procedure
- 01/12/2004
DEC 2.2.1
See Notes
Under the circumstances listed in DEC 2 Annex 1 G, if FSA staff consider that action is appropriate, they will recommend to the relevant decision maker that a warning notice be given. A specimen warning notice for enforcement cases is at DEC 2 Annex 5 G.
- 01/12/2004
DEC 2.2.2
See Notes
After considering the staff recommendation, the decision maker may:
(1) decide not to take further action (with or without a private warning (see ENF 11.3(Private warnings)); or
- 01/12/2004
DEC 2.2.3
See Notes
In the case of a proposed refusal of an application for approval under section 59 of the Act, the FSA must send a warning notice to all interested parties. Under section 62(5) of the Act (Applications for approval: procedure and right to refer to Tribunal), the interested parties in relation to an application for approval, are:
(1) the applicant;
(2) the person in respect of whom the application is made ('A');
(3) the person by whom A's services are to be retained, if not the applicant.
- 01/12/2004
DEC 2.2.4
See Notes
Under regulation 22 of the OEIC Regulations, in the case of a warning notice concerning a proposed change in respect of an ICVC, the notice must be given to the depositary as well as the ICVC. The only exception is if the proposal is to replace the depositary or any director.
- 01/12/2004
DEC 2.2.5
See Notes
If the FSA decides to give a warning notice to a person, in accordance with section 387 of the Act (Warning notices), the warning notice must:
(1) state the action which the FSA proposes to take;
(2) be in writing;
(3) give the FSA's reasons for the proposed action;
(5) if that section applies, describe its effect and state whether any secondary material exists to which the person concerned must be allowed access under it.
- 01/12/2004
DEC 2.2.6
See Notes
- 01/12/2004
DEC 2.2.7
See Notes
The warning notice will contain a statement that the person concerned is entitled to make representations to the FSA. The notice must specify a reasonable period, of at least 28 days from receiving (see DEC 5.3) the warning notice, within which the person to whom it is given may make representations.
- 01/12/2004
DEC 2.2.8
See Notes
The procedures for making representations are set out in DEC 4.4.
- 01/12/2004
DEC 2.2.9
See Notes
The warning notice will contain (where appropriate) a statement that the mediation scheme is available. The applicability of the FSA's mediation scheme is described in DEC App 1.
- 01/12/2004
DEC 2.3
Decision notice procedure
- 01/12/2004
DEC 2.3.1
See Notes
The decision maker will consider any representations made in accordance with DEC 4.4 in relation to a warning notice which has already been given. A decision will be stated in a decision notice or (where appropriate) a notice of discontinuance or other written notice. The decision notice sets out the terms of the decision. A specimen decision notice for enforcement cases is at DEC 2 Annex 6 G.
- 01/12/2004
DEC 2.3.2
See Notes
In accordance with section 388 of the Act (Decision notices), the decision notice must:
(1) be in writing;
(2) give the FSA's reasons for its decision to take the action to which the decision notice relates;
(4) if that section applies, describe its effect and state whether any secondary material exists to which the person concerned must be allowed access under it; and
- 01/12/2004
DEC 2.3.3
See Notes
In the case of a proposed refusal of an application for approval under section 59 of the Act, the FSA must give a decision notice to all interested parties (see DEC 2.2.3 G).
- 01/12/2004
DEC 2.3.4
See Notes
In the case of a decision notice concerning a notification of a proposed change in respect of an ICVC, the FSA must give a decision notice to the depositary as well as to the ICVC, if the depositary received the warning notice (see DEC 2.2.4 G).
- 01/12/2004
DEC 2.3.5
See Notes
The decision maker may decide to take action different from that proposed in the warning notice. However, under section 388(2) of the Act, that action must be made under the same Part of the Act as the action proposed in the warning notice.
- 01/12/2004
Further decision notice
DEC 2.3.6
See Notes
Under section 388(3) of the Act, following the giving of a decision notice but before the FSA takes action to which the decision notice relates, the FSA may give the person concerned a further decision notice relating to different action concerning the same matter. Under section 388(4) of the Act, the FSA can only do this if the person receiving the further decision notice gives his consent. In these circumstances the following procedure will apply:
(1)
FSA staff will recommend to the decision maker that a further decision notice be given, either before or after obtaining the person's consent;
(2) the decision maker will consider whether the action proposed in the further decision notice is appropriate in the circumstances;
(3) if the decision maker decides that the action proposed is inappropriate, he will decide not to give the further decision notice. In this case, the original decision notice will stand and the person's rights in relation to that notice will be unaffected. If the person's consent has already been obtained, the FSA will notify him of the decision not to give the further decision notice;
(4) if the decision maker decides that the action proposed is appropriate then, subject to the person's consent being (or having been) obtained, a further decision notice will be given;
(5) a person who had the right to refer the matter to the Tribunal under the original decision notice will have that right under the further decision notice. The time period in which the reference to the Tribunal may be made will begin from the date on which the further decision notice is given.
- 01/12/2004
DEC 2.3.7
See Notes
For the purpose of establishing whether the person receiving the further decision notice gives his consent, the FSA will normally require consent in writing. If the person concerned is an individual, the FSA will normally require a letter or signed memorandum from him recording his consent. If the person concerned is a body corporate or partnership, the FSA will normally require a letter or signed memorandum on behalf of the body corporate or partnership stating its consent.
- 01/12/2004
Notice of discontinuance
DEC 2.3.8
See Notes
If the FSA decides not to take action proposed in a warning notice or the action to which a decision notice relates, section 389 of the Act (Notices of discontinuance) requires the FSA to give a notice of discontinuance to the person to whom the warning notice or decision notice was given. (Section 389 of the Act does not apply if the discontinuance of the proceedings results in the granting of an application made by the person to whom the warning notice (or decision notice) was given.)
- 01/12/2004
DEC 2.3.9
See Notes
A notice of discontinuance:
(1) must identify what proceedings are being discontinued (section 389(3)); and
(2) must state that the FSA may publish information about the matter if the person to whom the notice of discontinuance is given consents (section 391(2)).
- 01/12/2004
DEC 2.3.10
See Notes
Where the FSA is required to give a person a copy of a notice of discontinuance (see DEC 2.4.10 G), the copy must be accompanied by a statement that the FSA may publish information about the matter, so far as relevant to the person to whom the copy is given, if that person consents.
- 01/12/2004
Final notice
DEC 2.3.11
See Notes
Under section 390 of the Act (Final notices), the FSA must give a final notice to the person to whom it has given a decision notice:
(1) if the matter was not referred to the Tribunal within the period of 28 days of the date when the decision notice was given, or within any other period that may be prescribed in the Tribunal rules, in which case the FSA will give a final notice at the same time as it takes the action to which the decision notice relates;
(2) if the matter was referred to the Tribunal within the period of 28 days of the date when the decision notice was given, or within any other period that may be prescribed in the Tribunal rules, in which case the FSA will give a final notice at the same time as it takes action in accordance with any directions given by the Tribunal or the Court under section 137 of the Act (Appeal on a point of law).
- 01/12/2004
DEC 2.3.12
See Notes
A final notice sets out the terms of the statement, order, penalty or other action, and will give details of the date when the action takes effect.
- 01/12/2004
DEC 2.4
Third party rights and access to FSA material
- 01/12/2004
DEC 2.4.1
See Notes
Sections 393 (Third party rights) and 394 (Access to FSA material) of the Act confer additional procedural rights relating to third parties and to disclosure of FSA material. These rights apply in certain warning notice and decision notice cases referred to in section 392 of the Act (Application of sections 393 and 394). The cases in which these additional rights apply are identified in DEC 2 Annex 1 G by asterisks; these are generally cases in which the warning notice or decision notice is given on the FSA's own initiative rather than in response to an application or notification made to the FSA.
- 01/12/2004
Access to FSA material
DEC 2.4.2
See Notes
If section 394 of the Act (Access to FSA material) applies and the FSA gives a person a warning notice or decision notice, it must under section 394(1) allow that person ('A') access to:
(1) the material on which the FSA relied in taking the decision which gave rise to the obligation to give the warning notice (or the decision notice); and
- 01/12/2004
DEC 2.4.3
See Notes
However, the duty under section 394(1) is qualified in the following ways:
(1) under section 394(2), the FSA does not have to allow A access to material that is excluded material;
(2) under section 394(2)(a) and (b), the FSA does not have to allow A access to material if this:
(a) relates to a case involving a person other than A; and
(b) was taken into account in A's case only for the purpose of comparison with other cases;
(3) under section 394(3), the FSA may refuse A access to particular material to which it would otherwise have to allow him access if, in the FSA's opinion, allowing him access to the material would not be in the public interest or would not be fair, having regard to:
(a) the likely significance of the material to the person concerned in relation to the matter about which he has been given a notice; and
(b) the potential prejudice to the commercial interests of a person (other than A) which would be caused by the material's disclosure.
- 01/12/2004
DEC 2.4.4
See Notes
If under section 394(2) the FSA does not allow A access to material because it is excluded material consisting of a protected item, it must give A written notice of the existence of the protected item and of the FSA's decision not to allow him access to it (section 394(4)).
- 01/12/2004
DEC 2.4.5
See Notes
If under section 394(3) the FSA refuses to allow A access to particular material, it must give him written notice of the refusal and the reasons for it (section 394(5)).
- 01/12/2004
DEC 2.4.6
See Notes
If the FSA receives a request for access to material, the FSA may within a reasonable period after the request was made:
(1) provide facilities for the inspection and photocopying of the material that it considers it is required to disclose; or
(2) provide a photocopy of the material.
The FSA will provide the first photocopy of the material free of charge, but will charge for subsequent copies it provides to the same person.- 01/12/2004
Third party rights
DEC 2.4.7
See Notes
If section 393 (Third party rights) applies and any of the reasons given in the warning notice relate to a matter which:
(1) identifies a person ("the third party") other than the person to whom the warning notice is given; and
(2) in the FSA's opinion is prejudicial to the third party;
then the FSA must give the third party, in accordance with section 393 of the Act, a copy of the warning notice.- 01/12/2004
DEC 2.4.8
See Notes
A copy of the warning notice will not be given if the FSA considers that this would be impracticable, or the FSA has already given the third party a separate warning notice about the same matter. Similarly, a copy of the warning notice will not be given if the FSA gives the third party such a notice at the same time as it gives the warning notice which identifies him.
- 01/12/2004
DEC 2.4.9
See Notes
- 01/12/2004
DEC 2.4.10
See Notes
The FSA must give a copy of the notice of discontinuance, decision notice or final notice (as appropriate) to a third party who has been given a copy of the warning notice or decision notice (section 393(14), 393(5) and 390(1) of the Act).
- 01/12/2004
DEC 2.4.11
See Notes
If the FSA gives a copy of a warning notice or decision notice to a third party, the copy must be accompanied by an indication of the third party's right under section 393(9) to refer the case to the Tribunal and the procedure on such a referral.
- 01/12/2004
DEC 2.4.12
See Notes
If the FSA gives a copy of a warning notice or decision notice to a third party, the provisions about access to FSA material also apply to the third party (DEC 2.4.2 G to DEC 2.4.6 G). Under section 393(12), the material that the FSA must disclose under section 394 is material that relates to the matter that identifies the third party.
- 01/12/2004
DEC 2 Annex 1
Statutory notice procedure: Warning notice and decision notice procedure
- 01/12/2004
See Notes
List of warning notices and decision notices under the Act (other than Part VI)and certain other enactments
| Note: Third party rights and access to FSA material apply to the powers listed in this table where indicated by an asterisk * (see DEC 2.4) | |||
| Section of the Act | Description | Handbook reference | Decision maker |
| 52(6)(a)/52(9)(a) | when the FSA is proposing/deciding to grant an application for a Part IV permission with a limitation or a requirement which was not applied for, or with a narrower description of regulated activity than that applied for | AUTH 3 | RDC |
| 52(6)(b)/(9) (b) | when the FSA is proposing/deciding to grant an application to vary a firm's Part IV permission but, otherwise than as part of the application, to restrict the Part IV permission (either by imposing a limitation or requirement which was not applied for or by specifying a narrower description of regulated activity than that applied for) | SUP 6 | RDC / executive procedures (Note 1) |
| 52(7)/(9)(c) | when the FSA is proposing/deciding to refuse an application for a Part IV permission | AUTH 3 | RDC |
| 52(7)/(9)(c) | when the FSA is proposing/deciding to refuse an application to vary a firm's Part IV permission | SUP 6 | RDC / executive procedures (Note 1) |
| 52(7)/(9)(c) | when the FSA is proposing/deciding to refuse an application to cancel a firm's Part IV permission | SUP 6 | RDC |
| 54(1)/(2) | when the FSA is proposing/deciding to cancel a firm's Part IV permission otherwise than at its request* | ENF 5 | RDC |
| 57(1)/(3) | when the FSA is proposing/deciding to make a prohibition order against an individual* | ENF 8 | RDC |
| 58(3)/(4) | when the FSA is proposing/deciding to refuse an application for the variation or revocation of a prohibition order | ENF 8 | RDC |
| 62(2)/(3) | when the FSA is proposing/deciding to refuse an application for approval of a person performing a controlled function under section 59 of the Act (in conjunction with an application for Part IV permission) | AUTH 6 | RDC |
| 62(2)/(3) | when the FSA is proposing/deciding to refuse an application for approval of a person performing a controlled function (otherwise than in conjunction with an application for Part IV permission) | SUP 10 | RDC |
| 63(3)/(4) | when the FSA is proposing/deciding to withdraw approval from an approved person * | ENF 8 | RDC |
| 67(1)/(4) | when the FSA is proposing/deciding to take action against an approved person by exercising the disciplinary powers conferred by section 66* | ENF 11/12/13 | RDC |
| when the FSA is proposing/deciding to impose a sanction for market abuse * | ENF 14 | RDC | |
| 183(3)/186(1) | when the FSA is proposing/deciding to object to a change in control following receipt of a notice of control | SUP 11 | Executive procedures |
| 185(3)/(4) | when the FSA is proposing/deciding to approve a change in control following receipt of a notice of control but subject to conditions | SUP 11 | Executive procedures |
| 187(1)/(3) and 188(1) | when the FSA is proposing/deciding to object to a person who has failed to submit a notice of control or a notice on acquiring, or increasing, control, or to object to an existing controller | SUP 11 | Executive procedures |
| 200(4)/(5) | when the FSA is proposing/deciding to refuse an application for variation or rescission of a requirement imposed on an incoming firm | ENF 4 | RDC / executive procedures (Note 1) |
| 207(1)/208(1) | when the FSA is proposing/deciding to publish a statement in respect of an authorised person (under section 205) or impose a financial penalty on an authorised person (under section 206)* | ENF 11/12 | RDC |
| 245(1)/(2) | when the FSA is proposing/deciding to refuse an application for an authorisation order declaring a unit trust scheme to be an AUT | COLL 2 and CIS 16 | RDC / executive procedures (Note 2) |
| 252(1)/(4) | when the FSA is proposing/deciding to refuse approval of a proposal to replace the trustee or manager of an AUT | COLL 2 and CIS 16 | Executive procedures |
| 255(1)/(2) | when the FSA is proposing/deciding to make an order under section 254 revoking the authorisation order of an AUT * | ENF 16 | RDC |
| 260(1)/(2) | when the FSA, on an application to revoke or vary a direction under section 257, proposes/decides to refuse to revoke or vary the direction or proposes/decides to vary the direction otherwise than in accordance with the application | ENF 16 | RDC |
| 264(2)/265(4) (Note 3) | when the FSA is notifying/deciding not to withdraw a notice, to the operator and relevant EEA State authorities, that the way in which a collective investment scheme constituted in another EEA State intends to invite persons in the United Kingdom to participate in the scheme does not comply with UK law | COLL 9 and CIS 16 | Executive procedures |
| 269(1)/(2) | when the FSA , on an application under subsection (4) or (5) of section 267 by an operator of a section 264 recognised scheme to revoke or vary a direction that the promotion of the scheme be suspended, proposes/decides to refuse the application or to vary the direction otherwise than in accordance with the application | ENF 16 | RDC |
| 271(1)/(3) | when the FSA is proposing/deciding to refuse approval of a collective investment scheme as a recognised scheme under section 270 | COLL 9 and CIS 16 | Executive procedures |
| 276(1)/(2) | when the FSA is proposing/deciding to refuse an application for an order declaring a collective investment scheme to be a recognised scheme under section 272 | COLL 9 and CIS 16 | Executive procedures |
| 280(1)/(2) | when the FSA is proposing/deciding to direct that a section 270 recognised scheme is to cease to be recognised or to revoke a section 272 order in respect of a recognised scheme * | ENF 16 | RDC |
| 321(8)/(9) | when the FSA is proposing/deciding to refuse an application for variation or revocation of a direction or a requirement imposed on a former underwriting member of Lloyd's* | None | RDC |
| 331(1)/(3) | when the FSA is proposing/deciding to make an order disapplying the exemption from the general prohibition under section 327* | ENF 18 | RDC |
| 331(7)/(8) | when the FSA is proposing/deciding to refuse an application for the variation or revocation of an order made under section 329* | ENF 18 | RDC |
| 345(2)/(3) | when the FSA is proposing/deciding to disqualify an auditor or actuary from being the auditor of, or acting as an actuary for, any authorised person or class of authorised person or from being the auditor of any AUT or ICVC * | ENF 17 | RDC |
| 385(1)/386 (1) | when the FSA is proposing/deciding to exercise the power under section 384(5) to require a person to pay restitution* | ENF 9 | RDC |
| Paragraph 15(6)(c) of Schedule 3 (Note 3) | when the FSA is notifying/ deciding not to withdraw a notice issued to an EEA UCITS management company wishing to deal in units in a collective investment scheme in the United Kingdom and relevant EEA State authorities, that the way in which the EEA UCITS management company intends to market a relevant scheme in the United Kingdom does not comply with UK law. | AUTH 5 | Executive procedures |
| Paragraph 19(8)/(12) of Schedule 3 | when the FSA is proposing/deciding to refuse to give a consent notice to a UK firm wishing to establish a branch under an EEA right | SUP 13SUP 13 | RDC |
| Section of the Building Societies Act 1986 (Note 5) | Description | Handbook reference | Decision maker |
| 36A(5)/(5A) (Note 6) | when the FSA is proposing/deciding to issue a prohibition order under section 36A prohibiting the continuance or carrying on of an activity and requiring the disposal of assets acquired or otherwise in a building society's possession by virtue of the activity, where the society has failed to carry into effect a restructuring plan which it has been directed to carry out by the FSA under section 36(8) | None | RDC |
| 46A(1)(a)/(3) (a) (Note 7) | when the FSA is proposing/deciding to give a direction under section 36(3), (5), (6), (7) or (10) requiring a building society to submit for its approval a restructuring plan or to submit to the society's members the requisite transfer resolutions for a transfer of the society's business to a company or (if such a direction is given) imposing limitations on the issue of shares, acceptance of deposits or making of loans or requiring the society to take certain steps or refrain from certain action or requiring the removal of a director or other officer (Note 8)* | None | RDC |
| 46A(1)(b)/(3) (b) (Note 7) | when the FSA is proposing/deciding to give a direction under section 42B(1) (other than a direction varying a previous direction with the agreement of the building society concerned) that a building society transfers all its engagements to one or more other building societies under section 94 or that it transfers its business to an existing company under section 97* | None | RDC / executive procedures (Note 9) |
| 93(6) (Note 10) | when the FSA , on an amalgamation between building societies each of which has a Part IV permission to accept deposits, notifies the successor society of the terms of its Part IV permission | None | RDC / executive procedures (Note 11) |
| Section of the Credit Unions Act 1979 | Description | Handbook reference | Decision maker |
| 20 | where the FSA is proposing to cancel or suspend the registration of a credit union or to petition for the winding up of a credit union | CRED 15 Annex 1 G | RDC |
| Section of the Friendly Societies Act 1992 (Note 5) | Description | Handbook reference | Decision maker |
| 58A(1)(a)/(3) (a) (Note 12) | when the FSA is proposing/deciding to give a direction under section 54 or section 55 requiring a friendly society to take or refrain from taking steps where certain activities have become disproportionate to those of the friendly society group or, as the case may be, the society, or varying such a direction other than at the request of the society* | None | RDC |
| 58A(1)(b)/(3) (b) (Note 12) | when the FSA is proposing/deciding to give a direction under section 90 providing for a transfer of the engagements of a friendly society * | None | RDC |
| 85(4A) (Note 10) | when the FSA , on an amalgamation between friendly societies each of which has a Part IV permission, notifies the successor society of the terms of its Part IV permission | None | RDC / executive procedures (Note 11) |
| OEIC Regulations reference | Description | Handbook reference | Decision maker |
| Regulation 16(1)/(2) | when the FSA is proposing/deciding to refuse an application for an authorisation order in respect of a proposed ICVC | COLL 2 and CIS 16 | RDC / executive procedures (Note 2) |
| Regulation 22(1)/(2)/(4)/ (5) | when the FSA is proposing/deciding to refuse approval of (or, having given a warning notice , deciding to approve (Note 4)) a proposal to replace the depositary or director of an ICVC , or any other proposal/decision falling within regulation 21 | COLL 2 and CIS 16 | Executive procedures |
| Regulation 24(1)/(2) | when the FSA is proposing/deciding to revoke an authorisation order relating to an ICVC under regulation 23(1)* | ENF 16 | RDC |
| Regulation 28(1)/(2) | when the FSA is proposing/deciding to refuse an application to revoke or vary a direction in accordance with a request under regulation 25(7) or to vary the direction in accordance with the application | ENF 16 | RDC |
| Paragraph 20 of schedule 5 | when the FSA is proposing/deciding to use the disqualification powers under section 249(1)* | ENF 17 | RDC |
| Note 1: The decision will be made by the RDC if it involves a fundamental (see DEC 4.1.5 G) change to the nature of a permission. | |||
| Note 2: The decision will be made by the RDC if it relates to an application for an authorisation order by an authorised fund manager who is not the operator of an existing AUT or ICVC. | |||
| Note 3: Although the notice under section 265(4) is a decision notice, the notice under section 264(2) is not a warning notice. The FSA will operate a procedure compliant with section 264 for the section 264(2) notice, which will be similar to the procedure for a warning notice. | |||
| Note 4: The FSA must give a decision notice under regulation 22(5) of the OEIC Regulations when, having given a warning notice, it decides to approve a proposal. But this decision notice has the effect of a written notice giving the FSA's approval under regulation 21(3)(a) of the OEIC Regulations. Although the FSA will comply with the statutory requirements regarding the giving of decision notices, DEC should otherwise be read as if the decision notice was a written notice granting an application. | |||
| Note 5: As amended by the Financial Services and Markets Act 2000 (Mutual Societies) Order 2001 (SI 2001/2617). | |||
| Note 6: There is no right to refer a decision to issue a prohibition order under section 36A to the Tribunal. Accordingly, a decision notice under section 36A(5A) is not required to give an indication of whether any such right exists. A decision notice under section 36A(5A) may only relate to the issue of a prohibition order under section 36A. Where such a decision notice is given, no final notice is required under section 390 of the Act and the FSA may issue the order at the same time as or after giving the decision notice. For the purposes of section 391 of the Act (Publication), the decision notice is treated as if it were a final notice. | |||
| Note 7: These powers become exercisable by the FSA if a building society fails to comply with any of the following requirements imposed by the Building Societies Act 1986: section 5(1)(a) or (b) (purpose or principal purpose and principal office); section 6(1) (the lending limit); and section 7(1) (the funding limit). | |||
| Note 8: The warning notice and decision notice must set out the terms of the direction which the FSA proposes/has decided to give. A decision notice given under section 46A(3) must give an indication of the society's right, given by section 46A(5), to have the matter referred to the Tribunal. A decision notice under section 46A(3) may only relate to action under the same section of the Building Societies Act 1986 as the action proposed in the warning notice. A final notice under section 390 of the Act must set out the terms of the direction and state the date from which it takes effect. Section 392 of the Act is to be read as if it included references to a warning notice given under section 46A(1) and a decision notice given under section 46A(3). | |||
| Note 9: The decision will be made under executive procedures if the society has agreed to the giving of the direction and its terms. | |||
| Note 10: The FSA notifies the successor of the permission by giving it a decision notice. The decision notice is not preceded by the giving of a warning notice. No final notice is required under section 390 of the Act and for the purposes of section 391 of the Act (Publication), the decision notice is treated as if it were a final notice. The giving of permission is treated for the purposes of section 55 of the Act (Right to refer matters to the Tribunal) as if it were the determination of an application made by the successor under Part IV of the Act. Part IX of the Act (Hearings and appeals) accordingly applies, but with the omission of section 133(9), which would otherwise prevent the FSA from giving the permission on the terms notified in the decision notice until after any reference and appeal. | |||
| Note 11: The decision will be made under executive procedures where the terms of the permission have been agreed with the successor. | |||
- 13/02/2004
DEC 2 Annex 2
Statutory notice procedure: Warning notice and decision notice procedure
- 01/12/2004
See Notes
The FSA's decision making procedure for applications concerning Part IV permission, applications for approval under section 59 of the Act, and for certain other applications involving warning and decision notices
- 01/12/2004
DEC 2 Annex 3
Statutory notice procedure: Warning notice and decision notice procedure
- 01/12/2004
See Notes
The FSA's decision making procedure in non-application cases involving warning and decision notices
- 01/12/2004
DEC 2 Annex 4
Statutory notice procedure: Warning notice and decision notice procedure
- 01/12/2004
See Notes
The FSA's decision making procedure on notification of a change in control involving warning and decision notices
- 01/12/2004
DEC 2 Annex 5
Specimen Warning Notice
- 01/12/2004
See Notes
This annex consists only of one or more forms or templates. Forms and templates are to be found through the 'Forms' link under Useful Links section at www.fsahandbook.info Opens in a new window or on the Handbook CD-ROM.
- 01/12/2004
DEC 2 Annex 6
Specimen Decision Notice
- 01/12/2004
See Notes
This annex consists only of one or more forms or templates. Forms and templates are to be found through the 'Forms' link under Useful Links section at www.fsahandbook.info Opens in a new window or on the Handbook CD-ROM.
- 01/12/2004
DEC 3
Statutory notice procedure: Supervisory
notice procedure
DEC 3.1
Supervisory notice procedure
- 01/12/2004
DEC 3.1.1
See Notes
The Act requires the FSA, when proposing to
exercise its powers in certain circumstances, to use the supervisory notice procedure. The relevant
circumstances are set out in DEC
3 Annex 1 G. DEC
1.2.3 G includes a summary of the purpose of supervisory notices.
- 01/12/2004
DEC 3.1.2
See Notes
In DEC
3.1.3 G to DEC
3.1.10 G, the supervisory notice about a matter first
given to the recipient is referred to as the "first supervisory notice" and the supervisory notice given
after consideration of any representations is referred to as the "second supervisory notice". DEC 3 sets out the procedure which
applies when the FSA gives
a supervisory notice.
The flowchart in DEC
3 Annex 2 G illustrates
the procedure for the giving of supervisory
notices. A specimen notice for enforcement cases is at DEC
3 Annex 3 G.
- 01/12/2004
First supervisory notice
DEC 3.1.3
See Notes
In the circumstances listed in DEC
3 Annex 1 G, if FSA staff consider that action is appropriate,
they will recommend to the relevant decision maker that a supervisory notice be given. The recommendation
will say whether the action should take effect immediately, on a specified
date, or when the matter is no longer open
to review.
- 01/12/2004
DEC 3.1.4
See Notes
After considering the staff recommendation,
the FSA may:
(1) decide to take no action; or
- 01/12/2004
DEC 3.1.5
See Notes
If the FSA decides to give a first supervisory notice to
a person,
in accordance with the sections of the Act listed
in DEC
3 Annex 1 G, the notice must:
(1) give details of the action;
(2) inform him when the action takes effect,
which may be immediately, on a date specified in the notice or (except for
a supervisory notice given
under section 321 of the Act) when the matter is no longer open to review;
(3) state the FSA's reasons for the action and for its
decision as to when the action takes effect;
(4) inform him of his right to refer the
matter to the Tribunal and
give an indication of the procedure on such a reference; and
- 21/11/2002
DEC 3.1.5A
See Notes
Except
for a supervisory notice given
under section 321 of the Act,
the action may take effect immediately (or on a specified date) only if the FSA considers this necessary,
having regard to the ground on which it is taking the action.
- 21/11/2002
DEC 3.1.6
See Notes
- 01/12/2004
DEC 3.1.7
See Notes
The procedures for making representations
are set out in DEC 4.4. If the FSA receives no representations
within the period specified in the first supervisory
notice, the default procedures set out in DEC
4.4.13A G apply.
- 21/11/2002
Second supervisory notice
DEC 3.1.8
See Notes
The FSA will
consider any representations made in accordance with DEC 4.4 concerning a first supervisory
notice which the FSA has
already given.
- 01/12/2004
DEC 3.1.9
See Notes
If the FSA decides to take the proposed action,
or to take action in a different way, or decides not to rescind action that
is already effective, then in accordance with the sections of the Act listed in DEC
3 Annex 1 G, a second supervisory notice must
be given.
- 01/12/2004
DEC 3.1.10
See Notes
If the FSA decides to give a second supervisory notice, its
content will depend on the action the FSA decides
to take.
(1) If the FSA decides to take the action proposed in
the first supervisory
notice, or if action has already been taken which the FSA decides not to rescind,
in accordance with the sections of the Act listed
in DEC
3 Annex 1 G, the notice must inform
the person concerned
of his right to refer the matter to the Tribunal.
If a notice informs a person of
his right to refer the matter to the Tribunal,
it must also describe the procedure on such a reference.
(2) If the FSA decides to take different action from
that proposed in the first supervisory
notice, then in accordance with the sections of the Act listed in DEC
3 Annex 1 G, the second supervisory notice must
be in the same form as a first supervisory
notice (see DEC
3.1.5 G).
- 01/12/2004
DEC 3.1.11
See Notes
If the FSA decides not to take action, or decides
to rescind action that is already effective, then in accordance with the sections
of the Act listed
in DEC
3 Annex 1 G, the person concerned must
be informed in writing.
- 01/12/2004
DEC 3 Annex 1
Statutory notice procedure: Supervisory notice procedure
- 01/12/2004
See Notes
| Section of the Act | Description | Handbook reference | Decision maker |
| 53(4)/(7)/(8)(b) | when the FSA is exercising its own-initiative power to vary a firm'sPart IV permission |
Variation of Part IV permission on the FSA's own initiative
SUP 7 | RDC / executive procedures (Note) |
| when the FSA is proposing/discontinues the listing of a security | LR 5 | RDC/ Executive procedures | |
| when the FSA is proposing/suspends the listing of a security | LR 5 | Executive procedures | |
| when the FSA is proposing/deciding to exercise or deciding to maintain, vary or revoke any of the powers in sections 87K or 87L in respect of an infringement of any applicable provision. | PR 5 | Executive procedures | |
| when the FSA is proposing/suspends trading in a financial instrument | DTR | Executive procedures | |
| 197(3)/ (6)/(7)(b) | when the FSA is exercising its power of intervention in respect of an incoming firm |
Intervention against incoming firms
SUP 7 | RDC / executive procedures (Note) |
| 259(3)/(8)/(9) (b) | when the FSA is exercising its power to give or, on its own initiative, to vary a direction to the manager and trustee of an AUT | Collective investment schemes | RDC |
| 268(3)/(7)(a) or (9)(a) (as a result of (8)(b)/(13)) | when the FSA is proposing/deciding to give or, on its own initiative, to vary a direction to the operator of a recognised scheme | Collective investment schemes | RDC |
| 282 (3)/(6)/(7)(b) | when the FSA is exercising its power to give a direction to an operator, trustee or depositary of a recognised scheme | Collective investment schemes | RDC |
| 321(2)/(5) | when the FSA is exercising its power to impose a requirement on a former underwriting member of Lloyd's | None | RDC |
| OEIC Regulations reference | Description | Handbook reference | Decision maker |
| Regulation 27 | when the FSA is exercising its power to give or, on its own initiative, to vary a direction to an ICVC and its depositary | Collective investment schemes | RDC |
| Note: The decision will be made by the RDC if it involves a fundamental change (see DEC 4.1.5 G) to the nature of a permission. | |||
- 01/09/2003
DEC 3 Annex 2
Statutory notice procedure: Supervisory notice procedure
- 01/12/2004
See Notes
The
FSA's decision making procedure for supervisory notices
- 21/11/2002
DEC 3 Annex 3
Specimen first supervisory notice
- 01/12/2004
See Notes
This annex consists only of one or more
forms or templates. Forms and templates are to be found through the 'Forms'
link under Useful Links section at www.fsahandbook.info Opens in a new window or on the Handbook CD-ROM.
- 21/11/2002
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; and(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).
- 21/11/2002
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;
(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);and
(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.
- 01/12/2004
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
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
DEC 5
References to the Tribunal, publication and service of notices
DEC 5.1
The Tribunal
- 01/12/2004
DEC 5.1.1
See Notes
(1)
A person who receives a decision notice or supervisory notice (including a third party who has been given a copy of a decision notice) has the right to refer the FSA's decision to the Tribunal.
(2) The Tribunal is established under Part IX of the Act (Hearings and Appeals) and is governed by Part IX and Schedule
13 to the Act (The Financial Services and Markets Tribunal). The Tribunal is independent of the FSA and appointed by the Lord Chancellor's Department in accordance with the Financial Services and Markets Tribunal Rules 2001 ("the Tribunal rules").
- 01/12/2004
DEC 5.1.2
See Notes
Under section 133(1) of the Act (Proceedings: general provisions), any reference to the Tribunal must be made within 28 days of the date on which the decision notice or supervisory notice is given, or within any period prescribed by the Tribunal rules. Under section 133(2) of the Act, the Tribunal rules may allow a reference to be made after the end of the 28 day period.
- 01/12/2004
DEC 5.1.3
See Notes
- 01/12/2004
DEC 5.1.4
See Notes
In determining a reference:
(1) made as a result of a decision notice, the Tribunal may not (section 133(6)) direct the FSA to take action which the FSA would not, as a result of section 388(2) of the Act (Decision notices), have had the power to take when giving the decision notice;
(2) made as a result of a supervisory notice, the Tribunal may not (section 133(7)) direct the FSA to take action which would otherwise have required the giving of a decision notice.
- 01/12/2004
DEC 5.1.5
See Notes
- 01/12/2004
DEC 5.1.6
See Notes
Under section 133(9) of the Act, the FSA must not take any action specified in a decision notice during the period within which a reference may be made to the Tribunal. Nor
may it take such action, if the matter is referred, until the reference, and any appeal against the Tribunal's decision, has been finally disposed of.
- 01/12/2004
DEC 5.1.7
See Notes
- 01/12/2004
DEC 5.2
Publication
- 01/12/2004
Publication of final notices and effective supervisory notices
DEC 5.2.1
See Notes
Section 391(4) and (5) of the Act (Publication) provides that the FSA must publish such information about the matter to which a final notice, or supervisory
notice that has taken effect, relates, as it considers appropriate. See also DEC 5.2.3 G.
- 01/12/2004
Publication of notices of discontinuance
DEC 5.2.2
See Notes
If the FSA has given a notice of discontinuance, the FSA may, if the person to whom the notice is given consents, publish such information
as it considers appropriate about the matter to which the discontinued proceedings related (section 391(2) of the Act). Similarly, section 391(3) of the Act indicates that where a notice of discontinuance has been copied to a person, the FSA may, if the person to whom the notice is copied consents, publish such information as it considers appropriate about the matter to which the discontinued proceedings related, so far as relevant to that person. See also DEC 5.2.3 G.
- 01/12/2004
No publication if unfair or prejudicial
DEC 5.2.3
See Notes
Section 391(6) of the Act provides that the FSA may not publish information relating to a final notice, supervisory notice that has
taken effect or notice of discontinuance if publication would, in the FSA's opinion, be unfair to the person with respect to whom the action was taken or prejudicial to the interests of consumers.
- 01/12/2004
Warning and decision notices: no publication
DEC 5.2.4
See Notes
Section 391(1) of the Act provides that neither the FSA nor any other person to whom a warning notice or decision notice is given or copied may publish the notice or any details concerning it.
- 01/12/2004
Manner of publication
DEC 5.2.5
See Notes
- 01/12/2004
DEC 5.3
Service of notices by the FSA
- 01/12/2004
Service of Notices Regulations
DEC 5.3.1
See Notes
The Financial Services and Markets Act 2000 (Service of Notices) Regulations 2001 (SI 2001/1420) govern service of statutory notices and other notices and documents which must be served by the FSA under
the Act.
- 01/12/2004
Methods of service by the FSA and deemed receipt
DEC 5.3.2
See Notes
The methods by which the FSA may give a notice under the Regulations and the day on which it is deemed to be received, are set out DEC 5.3.3 G.
- 01/12/2004
DEC 5.3.3
See Notes
Methods of service of notices by the FSA
| Method | Deemed day of receipt |
| (1) delivery of the notice to the recipient | not applicable: it is received when delivered |
| (2) leaving the notice at the recipient's proper address (as defined in the Regulations) | the business day after it is left at that address |
| (3) posting the notice to that address | if the notice is posted to an address in the United Kingdom, the second business day after posting if the notice is posted to an address in any EEA State (other than the United Kingdom), the fifth business day after posting |
| (4) transmitting the notice by fax if the recipient has indicated in writing that he is willing to receive the notice by such means and a follow-up copy is sent by another method by the end of the following business day | the business day after the day on which the document is transmitted |
| (5) transmitting the notice by any other electronic means of communication, if the recipient has indicated in writing that he is willing to receive the notice by such means | the business day after the day on which the document is transmitted |
- 01/12/2004
DEC 5.3.4
See Notes
The Regulations also make provision for the service of notices on:
(1) the recipient's nominee;
(3) if the recipient is not an individual, to particular persons on its behalf.
- 01/12/2004
Meaning of "business day"
DEC 5.3.5
See Notes
In the Regulations and DEC 5.3.3 G, "business day" means any day except Saturday, Sunday or a bank holiday,
where "bank holiday" includes Christmas Day and Good Friday.
- 01/12/2004
DEC App 1
Settlement procedure and mediation scheme
for FSA enforcement cases
DEC App 1.1
Introduction
- 01/12/2004
DEC App 1.1.1
See Notes
A person who is or may be
subject to enforcement action may discuss the proposed action with FSA staff through settlement
discussions. Settlement discussions may take place on an informal basis at
any time during the enforcement process. Where FSA staff have recommended that enforcement
action be taken against a person,
the mediation scheme will be available to those persons against whom action is proposed where
settlement discussions are, in the opinion of either party, unlikely to lead
to an agreed settlement. This appendix sets out the procedure for settlement
and the framework of the mediation scheme.
- 01/12/2004
DEC App 1.2
Settlement
- 01/12/2004
DEC App 1.2.1
See Notes
If a person who is or may be subject to enforcement
action wishes to discuss the proposed action with FSA staff on an informal basis, he may do
so at any time during the enforcement process. The FSA and
the person concerned
should agree that discussions will take place on a "without prejudice" basis,
and that neither party may subsequently rely on admissions or statements made
in the context of the discussions, or documents recording the discussions.
- 01/12/2004
DEC App 1.2.2
See Notes
- 01/12/2004
DEC App 1.2.3
See Notes
Having considered the terms of the proposed
settlement, the RDC may
ask to meet the relevant FSA staff
or the person concerned
in order to assist in its consideration of the proposed settlement. The RDC
may:
(1) accept the proposed settlement by issuing
a decision notice,
second supervisory notice or (where
appropriate) notice of
discontinuance based on the terms of the settlement; or
(2) decline the proposed settlement;
whether or not
the
RDC has met with the
relevant FSA staff
or the person concerned.- 01/12/2004
DEC App 1.2.4
See Notes
Where
the RDC declines
the proposed settlement, it may invite FSA staff
and the person concerned to enter into further discussions to try to achieve
a settlement. The RDC may
extend the period for representations (if they have not already done so),
or, if representations have already been made, the RDC will proceed to give a decisions notice.
- 01/12/2004
DEC App 1.2.5
See Notes
If it is not possible to reach an agreed
proposed settlement of the case by informal discussions, the person concerned may elect
to submit the case to mediation.
- 01/12/2004
DEC App 1.3
Mediation
- 01/12/2004
DEC App 1.3.1
See Notes
Mediation is a confidential without prejudice
dispute resolution process in which a neutral mediator assists the parties
in trying to settle their differences. The mediator is not a judge or arbitrator
and has no power to bind the parties, but rather operates as a facilitator
of the discussions.
- 01/12/2004
DEC App 1.3.2
See Notes
As mediation will be on a "without prejudice"
basis, admissions made by the parties in the course of the mediation and documents
prepared for the purposes of the mediation may not be referred to in subsequent
proceedings relating to the dispute if the mediation is unsuccessful. However,
if the mediation results in a proposed settlement of the dispute which is
approved by the
RDC
, the terms
of the proposed settlement will form the basis of a decision notice, and subsequent final notice, or second supervisory notice or (where
appropriate) notice of
discontinuance, given by the FSA.
- 01/12/2004
DEC App 1.3.3
See Notes
Following the issue of a warning notice the person will have access
to certain material on which the FSA has
relied in deciding to commence disciplinary proceedings (see DEC 2.4.2 G). The period following the issue of the warning notice is therefore a natural point
for
informal settlement
discussions to take place in an attempt to resolve the matter. Mediation is
intended to supplement those discussions where the
parties consider that the involvement of a neutral mediator is required to
facilitate furtherprogress.
- 01/12/2004
DEC App 1.4
Scope and availability of the mediation scheme
- 01/12/2004
DEC App 1.4.1
See Notes
- 01/12/2004
DEC App 1.4.2
See Notes
Mediation will be available in all other
enforcement cases falling within the scope of the RDC. In those cases involving allegations
of unfitness and impropriety based on judgements about dishonesty or lack
of integrity and the exercise of the FSA'sown-initiative powers on
a variation or cancellation of permission,
mediation will be available subject to the FSA's consent.
- 01/12/2004
DEC App 1.4.3
See Notes
In a case falling within the scope of
the scheme, (see DEC App 1.4.1 G and DEC App 1.4.2 G), mediation will take
place where an election to mediate is made after the warning notice has been issued and before
the FSA issues
a decision notice (the
relevant warning notice will
state the circumstances in which mediation is available for that matter under
the terms of the scheme). Where an election to mediate is made before the
issue of a warning notice or
after the issue of a decision
notice, mediation will be available subject to the FSA's consent.
- 01/12/2004
DEC App 1.4.4
See Notes
A person is
not obliged to take part in a mediation in the course of the enforcement process.
- 01/12/2004
DEC App 1.5
Mediation provider
- 01/12/2004
DEC App 1.5.1
See Notes
- 01/12/2004
DEC App 1.6
Starting the mediation
- 01/12/2004
DEC App 1.6.1
See Notes
If a case is submitted to mediation,
the parties will send a joint mediation notice in an agreed form to:
(1) the mediation provider; and
(2) the secretary to the
RDC
.
- 01/12/2004
DEC App 1.6.2
See Notes
The mediation notice will commit each
party to use their best endeavours to progress the mediation process in a
timely manner.
- 01/12/2004
DEC App 1.6.3
See Notes
The person may
request in the mediation notice that the time period specified in the warning notice for making
oral or written representations (or both) to the RDC be extended by a maximum of 14 days,
to allow time for the mediation to be completed. On receipt of a mediation
notice requesting such an extension, the RDC will
notify the parties and the mediation provider of its agreement to the requested
extension or of any other extension that it sees fit.
- 01/12/2004
DEC App 1.6.4
See Notes
If required, the person may apply to the RDC for a further extension in order to complete
the mediation (see DEC App 1.7.5 G).
The total of all extensions to the 28 day time period for making written or
oral representations may not exceed 28 days, other than in exceptional circumstances.
- 01/12/2004
DEC App 1.7
Setting up the mediation
- 01/12/2004
DEC App 1.7.1
See Notes
Once the parties have agreed to mediate,
and a mediation notice has been sent to the mediation provider, the mediation
provider will liaise with the parties in order to deal with the matters set
out in DEC App 1.7.2 G to DEC App 1.7.11
G.
- 01/12/2004
Appointment of mediator
DEC App 1.7.2
See Notes
(1) The mediation provider will maintain
a panel of suitable mediators, and recommend in each case a mediator to the
parties. The parties are free to accept or decline the recommendation. If
either party declines the recommendation, the mediation provider will seek
to obtain agreement on another mediator from the panel.
(2) If the parties cannot agree a mediator
within 7 days of the mediation notice being received by the mediation provider,
the mediation provider will appoint a mediator.
(3) The mediators on the panel will all be:
(a) experienced commercial mediators; and
(b) accredited by or registered with a recognised
mediation organisation.
(4) Experience of and expertise in the financial
services sector will not be compulsory for panel mediators, but may be desirable.
(5) Mediators will, in accepting appointments,
be required to confirm to the parties that they have no conflicts of interest
in doing so.
- 01/12/2004
Date for mediation
DEC App 1.7.3
See Notes
The mediation provider will liaise with
the parties and the mediator to agree:
(1) a suitable date for the mediation; and
(2) a timetable for the mediation process
as a whole, including the date for submission of case summaries and exchange
of documents referred
to in the case summaries.
- 01/12/2004
Duration of mediation
DEC App 1.7.4
See Notes
(1) Most mediations should last no longer
than one full day, but in complex cases more time may be necessary. The mediator
will assist the parties in deciding how much time to set aside. If the mediation
requires more time than allotted to it, the parties may ask the mediation
provider to set up a further day or days.
(2) The parties and the mediator will use
their best endeavours to complete the mediation as soon as practicable.
- 01/12/2004
Mediation timetable
DEC App 1.7.5
See Notes
(1) In complex cases, the agreed timetable
may extend beyond the initial extension agreed by the RDC, in which case the parties may request
a further extension from the RDC (see DEC App 1.6.4 G).
(2) If the mediation has not started within
the allotted timetable, the FSA may
decline to mediate, and the matter will be referred to the decision notice stage.
- 01/12/2004
Venue
DEC App 1.7.6
See Notes
The mediation may take place at any venue
acceptable to the parties and the mediator. This may be at the offices of
the mediation provider, the mediator (if different), the FSA or elsewhere.
- 01/12/2004
Mediation agreement
DEC App 1.7.7
See Notes
(1) Each mediation will take place in accordance
with the terms of a mediation agreement. The agreement will set out the terms
on which the mediation will take place, in particular, the agreement will
provide that:
(a) the mediation will be on a "without prejudice"
basis and confidential; and
(b) the parties who attend the mediation
will have authority to agree proposed settlement terms (subject, in relation
to the FSA staff,
to App 1.7.9G).
(2) The mediation agreement will be signed
by the parties, the mediator and the mediation provider.
- 01/12/2004
Confidentiality
DEC App 1.7.8
See Notes
(1) Confidentiality is a key element of the
mediation process. It means that:
(a) matters disclosed in, and documents created
for the purposes of, the mediation cannot be referred to in the public domain;
and
(b) matters disclosed by one party to the
mediator in confidence will not be disclosed to the other party without consent.
(2) Under the mediation scheme, however,
confidentiality will be limited in that:
(a) if any information indicating potentially
criminal conduct is disclosed to the mediator, the mediator will not be required
to keep that matter confidential (and may choose to terminate the mediation);
(b) the terms of any settlement reached will,
if approved by the
RDC
, be incorporated in a decision notice, and subsequent final notice or second supervisory notice, or
(where appropriate) notice
of discontinuance which may be made public;
(3) In all other respects, documents prepared
for the purposes of, and discussions taking place in the course of, the mediation
will retain the confidential status they had during the mediation itself.
- 01/12/2004
Authority to settle
DEC App 1.7.9
See Notes
(1) A key feature of mediation is the requirement
that those who attend the mediation on behalf of each party have full authority
to agree proposed settlement terms. In general, the FSA's decision
making procedure for regulatory enforcement cases requires that the RDC approve any decision
to take or refrain from taking disciplinary action. (The exception is some
cases involving late submission of reports, see DEC 4.5.2 G to DEC 4.5.6 G) Therefore, the RDC must approve any proposed
settlement terms agreed at the mediation.
(2) The FSA will
be represented during the mediation proceedings and at the mediation itself
by the FSA staff
who initially recommended that disciplinary action be taken. In order to minimise
the risk that the proposed settlement terms agreed at the mediation will not
be approved, the FSA will
endeavour to ensure that the relevant members of the RDC, or as many of its relevant members as
possible, are available for consultation by telephone during the mediation.
This is to enable a clear indication to be given to the parties and the mediator
whether the RDC will
find the proposed settlement terms acceptable.
(3) However, no involvement of the RDC in the mediation will
in any way compromise its right subsequently to decline to approve the settlement
terms.
(4) If the RDC decides to decline to approve the settlement
terms agreed at the mediation, the parties may, with the consent of the RDC, return to the mediation
process if they wish to explore further settlement options. If they do, the RDC will ensure that its
views are clearly stated as to why the terms previously agreed were not acceptable.
- 01/12/2004
Paperwork for the mediation
DEC App 1.7.10
See Notes
(1) Mediation requires the parties to be
able to discuss the dispute in an informed way. Therefore, each party attending
the mediation will be required to produce:
(a) a short case summary setting out the
issues in dispute; and
(b) any documents referred to in the case
summary.
(2) These documents must be submitted to
the mediation provider in triplicate at least one week before the mediation.
The mediation provider will be responsible for the exchange of documents.
(3) The parties and the mediator may agree
to dispense with the requirement to produce documentation before the mediation.
- 01/12/2004
Costs
DEC App 1.7.11
See Notes
(1) The costs of the mediation provider in
administering and conducting the mediation process (including the fee payable
to the mediator) will be agreed between the FSA and the mediation provider when the mediation
provider is appointed.
(2) For each mediation, the mediation provider
will invoice the parties for the anticipated costs of administering and conducting
the mediation in advance. The FSA and
the person will
bear half of these costs each. Any additional costs incurred by the mediation
provider will be invoiced after the mediation. These costs will also be shared.
The costs referred to in (1) and (2) do not include legal or other costs that
the FSA or person may incur in relation
to the mediation, which will be the responsibility of the parties.
- 01/12/2004
DEC App 1.8
Preliminary meeting
- 01/12/2004
DEC App 1.8.1
See Notes
Once appointed, the mediator may (in
his discretion) call a preliminary meeting with the parties and their advisers
(if any). This may be used to ensure that the parties are properly prepared
for the mediation, agree the issues for discussion and understand how the
process will operate.
- 01/12/2004
DEC App 1.9
Termination of the mediation
- 01/12/2004
DEC App 1.9.1
See Notes
The mediation will take place at the
agreed time and place.
- 01/12/2004
DEC App 1.9.2
See Notes
If the person withdraws from the mediation process
after it has agreed to mediate, it will be responsible for its share of any
costs incurred by, or owing to, the mediation provider (see DEC
App 1.7.11 G (1)).
- 01/12/2004
DEC App 1.9.3
See Notes
The mediation agreement will set out
the terms on which a party or the mediator, or both, may terminate the agreement.
These will include terms providing that:
(1) either party may withdraw from and terminate
the mediation at any stage before or during the mediation (subject to the
provisions on costs in DEC App 1.9.2 G,
for terminations before the mediation takes place);
(2) either party or the mediator may withdraw
if the mediation has not taken place within the agreed timetable; and
(3) the mediator may withdraw from and terminate
the mediation if, for example, a criminal offence by
or involving a party to the mediation is disclosed to him (see DEC
App 1.7.8 G (2)(a)).
- 01/12/2004
DEC App 1.10
Result of the mediation
- 01/12/2004
DEC App 1.10.1
See Notes
Mediation can only give rise to one of
two outcomes:
(1) a proposal for settlement agreed between
the parties; or
(2) no agreed proposal.
- 01/12/2004
DEC App 1.10.2
See Notes
If no agreed proposal is reached, the
mediation will be terminated and the case will return to the point it had
reached in the enforcement process prior to the mediation.
- 01/12/2004
DEC App 1.10.3
See Notes
If a settlement proposal is agreed, it
will be considered by the RDC, which will decide
whether to approve it. If it is approved,
a decision notice,
and subsequently a final
notice, will be issued reflecting the terms of the agreement
reached. If it is not approved,
the
parties may return to the mediation only with the RDC's consent. If the RDC does not consent, the case will return to the point it
had reached in the enforcement process prior to the mediation.
- 01/12/2004
DEC App 1.10.4
See Notes
A person may elect to mediate
only once during the course of the enforcement process.
- 01/12/2004
DEC App 1.11
Advisers
- 01/12/2004
DEC App 1.11.1
See Notes
The parties may bring legal or other
advisers of their choice with them to the mediation, although it is important
to preserve the informality of the mediation process.
- 01/12/2004
DEC App 1.12
Review of mediation procedure
- 01/12/2004
Transitional Provisions and Schedules
DEC TP 1
- 01/12/2004
DEC Sch 1
Record keeping requirements
- 01/12/2004
DEC Sch 1.1
See Notes
| There are no record-keeping requirements in DEC. |
- 01/12/2004
DEC Sch 2
Notification requirements
- 01/12/2004
DEC Sch 2.1
See Notes
| There are no notification or reporting requirements in DEC. |
- 01/12/2004
DEC Sch 3
Fees and other required payments
- 01/12/2004
DEC Sch 3.1
See Notes
| There are no requirements for fees or other payments in DEC. |
- 01/12/2004
DEC Sch 4
Powers exercised
- 01/12/2004
DEC Sch 4.1
See Notes
- 01/12/2004
DEC Sch 5
Rights of action for damages
- 01/12/2004
DEC Sch 6
Rules that can be waived
- 01/12/2004