CRED 14.7 Waiver and modification of rules

This section and SUP 8 apply to all credit unions that wish to apply for, or to consent to, or have been given a modification of or waiver of the FSA's rules.

This section is a summary of SUP 8, and explains how the regime for the waiver or modification of rules works.

The FSA may, on the application or with the consent of a credit union, direct that its2 rules:

1. (1)

   are not to apply to the credit union; or

2. (2)

   are to apply to the credit union with such modifications as may be specified.

SUP 8.3.1 states that the FSA may not give a waiver unless it is satisfied that:

1. (1)

   compliance would be unduly burdensome or would not achieve the purpose for which the rules were made;

2. (2)

   the waiver would not result in undue risk to persons whose interests the rules are intended to protect.

SUP 8.3.3 states that if a credit union wishes to apply for a waiver, it must do so to its usual supervisory contact at the FSA using the form in SUP 8 Annex 2 (Application for a waiver or modification).

1. (1)

   [Deleted]

2. (2)

   [Deleted]

3. (3)

   [Deleted]

4. (4)

   [Deleted]

5. (5)

   [Deleted]

6. (6)

   [Deleted]

7. (7)

   [Deleted]1

The FSA will acknowledge applications and seek to reply within 20 working days, though this may take longer if further information is required.

The FSA may impose conditions on a waiver including extra reporting requirements.

If the FSA decides against the waiver, it will give its reasons.

If the FSA considers that the waiver should apply to a number of credit unions, it will inform them that the waiver is available. To take advantage of the waiver, they will only have to give their written consent rather than making a formal application.

SUP 8.5.10R states that if a credit union becomes aware that a waiver is no longer relevant or appropriate, it must notify the FSA immediately.

The FSA is bound to publish a waiver, unless it is inappropriate or unnecessary. If the FSA publishes a waiver, it will not publish details of why a waiver was required or any of the supporting information given in a waiver application.

In deciding whether or not to publish, the FSA will take into account whether:

1. (1)

   it will be prejudicial to the commercial interests of the credit union;

2. (2)

   it relates to a minor matter that does not affect a third party and is unlikely to be of interest to other credit unions.

If the FSA decides upon publication, it will give the credit union the opportunity of avoiding this by withdrawing its application.

If a credit union wishes the FSA to vary a waiver, it should follow the procedures in SUP 8.3.3 (summarised in CRED 14.7.6 G).

The FSA may revoke a waiver if it is no longer appropriate. This may take effect immediately, if that is necessary to prevent undue risk to members.

Where revocation is not immediate, the FSA will give written notice, with a reasonable period (usually 28 days) in which to make representations. After considering any representations the FSA will give written confirmation of its decision.

Where the revocation is immediate, the FSA will also give the credit union the opportunity to make representations. After considering these, it will either confirm the revocation or seek the credit union's consent to a new waiver.

The waivers regime will be overseen by a staff committee of the FSA.