AUTH 8.2 Determination of an application

A decision to determine an application for Part IV permission, or an application for approval under section 59 of the Act, is taken in one of two ways:

1. (1)

   by internal staff procedures involving FSA staff at an appropriate level of seniority, if the decision is to grant the application on the terms applied for (this decision does not involve giving a statutory notice); or

2. (2)

   by the FSA's Regulatory Decisions Committee (RDC), in any other case (this decision does involve the giving of a statutory notice).

The decision on an application will be taken by the RDC where FSA staff have recommended:

1. (1)

   the refusal, or proposed refusal, of:

   1. (a)

      an application for Part IV permission (sections 52(7) and 52(9)(c)) of the Act (Determination of applications)); or

   2. (b)

      an application for approval under section 59 of the Act made with an application for Part IV permission (sections 62(2) and 62(3) of the Act (Applications for approval: procedure and right to refer to the Tribunal)); and

2. (2)

   the grant, or proposed grant, of an application for Part IV permission subject to a limitation or requirement which was not applied for by the applicant or with a narrower description of regulated activity than that to which the application relates (sections 52(6)(a) and 52(9)(a) of the Act).

The FSA Board has given FSA staff the authority to grant applications on the terms applied for. The majority of applications are determined by internal staff procedures.

As part of its application for Part IV permission, an applicant may apply for permission which includes a limitation (for example, a limitation on client categories), or a requirement (for example, a requirement not to hold or control client money). Limitations and requirements may be applied for in the application pack, or in a revision to the application pack submitted by the applicant if, for example, its business plans have changed. In those situations, FSA staff have authority to grant the application, on the terms applied for, using internal staff procedures.

1. (1)

   Internal staff procedures for decisions within the scope of AUTH are intended to ensure that decisions will, so far as possible, be taken by FSA staff with a good knowledge and understanding of:

   1. (a)

      the application concerned; and

   2. (b)

      other relevant factors in the general context of the application.

2. (2)

   They are also designed to ensure that applicants with routine applications obtain a decision as quickly as the nature of their application allows.

1. (1)

   Internal staff procedures provide for relevant aspects of the application to be taken fully into account and require that decisions are taken by FSA staff with appropriate experience. Decisions to grant the majority of applications for approval of a candidate, which are more routine in nature, may be made by a single individual, subject to appropriate oversight.1

2. (2)

   The FSA has established staff committees which may grant an application for Part IV permission, or approval under Part V of the Act, as appropriate. The Authorisation and Approvals Committee will consider an application where, for example, it is complex or sensitive and the recommendation is to refer the application to the RDC to give a warning notice. The chairman of the Authorisation and Approvals Committee is the director responsible for authorisation decisions and its members are senior staff at the FSA.1

The FSA keeps a record of each decision taken by internal staff procedures. This includes the names of the FSA staff taking the decision, the nature of the decision, the date it was taken and the information taken into account in arriving at the decision.

FSA staff are required by their contract of employment to comply with a code of conduct which imposes strict rules to cover the handling of conflicts of interest which may arise from personal interests or associations. FSA staff who are subject to a conflict of interest must declare that interest to the person to whom they are directly responsible for the decision. This individual to whom the conflict of interest is declared will decide whether that conflict precludes the involvement of the FSA staff member in making a decision.

The RDC is appointed by the FSA Board to exercise certain regulatory powers on behalf of the FSA Board. It is fully and directly accountable to the FSA Board for the decisions it makes. The RDC is a body outside the FSA's management structure.

The RDC has a Chairman, one or more Deputy Chairmen, and other members. Other than the Chairman, none of the members of the RDC is an employee of the FSA. Members are:

1. (1)

   current and recently retired practitioners with financial services industry skills and knowledge; and

2. (2)

   other suitable individuals representing the public interest.

For full details of the RDC and its procedures see DEC 4 (The decision maker). All decisions involving giving of statutory notices within the scope of AUTH will be determined by the RDC (see AUTH 8.2.2 G).

FSA staff are responsible for assembling and assessing the information required by the RDC and making recommendations to the RDC. Section 395 of the Act, however, requires the FSA to have procedures under which a decision which gives rise to a statutory notice is "taken by a person not directly involved in establishing the evidence on which that decision is based." So, the RDC is not directly involved in establishing the evidence on which decisions are based.