DEC 3.1 Supervisory notice procedure

DEC 3.1.1 G 01/12/2004

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.

DEC 3.1.2 G 01/12/2004

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.

First supervisory notice

DEC 3.1.3 G 01/12/2004

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.

DEC 3.1.4 G 01/12/2004

After considering the staff recommendation, the FSA may:

(1)
decide to take no action; or
(2)
decide to give a first supervisory notice to the person concerned.

DEC 3.1.5 G 21/11/2002

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;1
(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
(5)
inform him that he may make representations to the FSA within such a period as may be specified in the notice (whether or not the matter has been referred to the Tribunal).

DEC 3.1.5A G 21/11/2002

1Except 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.

DEC 3.1.6 G 01/12/2004

If the FSA decides to take no further action and the FSA had previously informed the person concerned that it intended to recommend action, the FSA will communicate this decision promptly to the person concerned.

DEC 3.1.7 G 21/11/2002

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.1

Second supervisory notice

DEC 3.1.8 G 01/12/2004

The FSA will consider any representations made in accordance with DEC 4.4 concerning a first supervisory notice which the FSA has already given.

DEC 3.1.9 G 01/12/2004

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.

DEC 3.1.10 G 01/12/2004

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).

DEC 3.1.11 G 01/12/2004

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.

DEC 3 Annex 1 Statutory notice procedure: Supervisory notice procedure

G 01/07/2005

Section of the Act	Description	Handbook reference	Decision maker1
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)
78(2)/(5)2	when the FSA is proposing/discontinues the listing of a security	LR 5	RDC/ Executive procedures
78(2)/(5)2	when the FSA is proposing/suspends the listing of a security	LR 5	Executive procedures
87O(2)/(5)2	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
96C2	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 1
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.

DEC 3 Annex 2 Statutory notice procedure: Supervisory notice procedure

G 21/11/2002

1The FSA's decision making procedure for supervisory notices

DEC 3 Annex 3 Specimen first supervisory notice

G 21/11/2002

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 or on the Handbook CD-ROM.1

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