CRED 16.3 Guidance on DEC

DEC 1 describes the application and purpose of DEC and provides an introduction to the manual. That introduction explains that the Act designates certain notices as warning notices, decision notices or supervisory notices (together called 'statutory notices') for which there are certain specified procedures, actions and protections. DEC 4 explains which decisions are to be taken by the Regulatory Decisions Committee (RDC) and which are subject to executive procedures. In relation to regulatory decisions which are not subject to statutory notices, 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 the following:

1. (1)

   significance of the decision for those affected by it;

2. (2)

   the complexity of the relevant considerations;

3. (3)

   the alternatives;

4. (4)

   the extent to which the factors of the case may be disputed;

5. (5)

   the novelty of the decision in the light of stated policy and established procedure.

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.

DEC 2 describes the procedure for issuing a warning notice or a decision notice. DEC 2 Annex 1 G sets out the circumstances in which the warning notice and decision notice procedures apply. Examples of such notices are:-

1. (1)

   when the FSA is proposing or deciding to refuse an application for Part IV permission;

2. (2)

   when the FSA is proposing or deciding to cancel a Part IV permission otherwise than by request;

3. (3)

   when the FSA is proposing or deciding to make a prohibition order against an individual;

4. (4)

   when the FSA is proposing or deciding to withdraw approval from an approved person.

DEC 3 explains the procedures that apply in the case of supervisory notices. The circumstances giving rise to supervisory notice procedures are set out in DEC 3 Annex 1 G. There is an example of such circumstances when the FSA is exercising its own-initiative power to vary a Part IV permission.

DEC 4 explains the distribution and decision making responsibilities between the RDC and executive procedures.

Examples of matters to be decided by the RDC include:

1. (1)

   refusal of an application for Part IV permission;

2. (2)

   limitation, variation or restriction of a Part IV permission;

3. (3)

   refusal or withdrawal of approved person status;

4. (4)

   exercise of the FSA's powers to impose a financial penalty or public censure on any person.

Examples of matters to be decided by executive procedures include:

1. (1)

   imposing a requirement to submit regular reports;

2. (2)

   imposing a requirement to submit a business plan;

3. (3)

   establishing or varying prudential limits, for example on capital or liquidity.

It explains (DEC 4.2.1 G - DEC 4.2.19 G) the status, composition and operating procedures of the RDC, and the way in which executive procedures will be conducted (DEC 4.3.1 G - DEC 4.3.19 G).

It also sets out the various procedures open to persons for making representation to the FSA (DEC 4.4.1 G - DEC 4.4.14 G).

DEC 5 covers references to the Tribunal, publication and service of notices.