DEC 4.1 Allocation of decision making

This section sets out the allocation of decision making between the RDC and executive procedures for decisions which:

1. (1)

   give rise to an obligation to give a statutory notice; or

2. (2)

   are associated with statutory notice decisions ("statutory notice associated decisions").

Statutory notice associated decisions include decisions:

1. (1)

   to set or extend the period for making representations (see DEC 4.4);

2. (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. (3)

   to refuse access to FSA material; and

4. (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.

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.

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. (1)

   [deleted]6

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2. (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. (3)

   [deleted]6

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4. (4)

   to cancel a Part IV permission on the FSA's own initiative;

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5. (4A)

   to revoke6 a small e-money issuer certificate (see ELM 8 (Small e-money issuers));

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6. (5)

   to withdraw approved person status6 under section 63 of the Act (Withdrawal of approval);

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7. (6)

   to make a prohibition order in relation to any person, or refuse an application to vary or revoke such an order;

8. (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;

9. (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;

10. (9)

    to exercise any power of the FSA relating to a regulated collective investment scheme, other than to:

    1. (a)

       refuse an application for an authorisation order (but see (10)); or

    2. (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

    3. (c)

       object to a notice of intention to invite persons to participate in a collective investment scheme constituted in another EEA State; or

    4. (d)

       refuse approval of changes to an AUT or ICVC;

11. (10)

    to refuse an application for an authorisation order, if the applicant is not the operator of an existing AUT or ICVC;

12. (11)

    to impose a requirement on a former underwriting member of Lloyd's or refuse an application to vary or rescind such a requirement;

13. (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;

14. (13)

    to disqualify an auditor or actuary;

15. (14)

    to refuse to give a consent notice to a UK firm wishing to establish a branch under an EEA right;

16. (15)

    2to give a direction under any of the following sections of the Building Societies Act 1986:

    1. (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);

    2. (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;

17. (16)

    2to issue a prohibition order under section 36A of the Building Societies Act 1986;

18. (17)

    2to determine the appropriate Part IV permission for the successor society on an amalgamation:

    1. (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

    2. (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;

19. (18)

    2to give a direction under any of the following sections of the Friendly Societies Act 1992:

    1. (a)

       sections 54 and 55 (power to direct a society to refrain from taking steps where certain activities have become disproportionate);

    2. (b)

       section 90 (power to direct a transfer of engagements);

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20. (19)

    not to include, or to remove, an appointed representative from the Register, or to refuse an application to revoke such a determination;54

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21. (20)

    to refuse an application for listing of securities;

22. (21)

    to discontinue the listing of securities on the FSA's own initiative;

23. (22)

    to publish a statement censuring an issuer of transferable securities, a person offering transferable securities to the public or a person requesting the admission of transferable securities to trading on a regulated market;

24. (23)

    to refuse an application for approval as a sponsor;

25. (24)

    to cancel a person's approval as a sponsor on the FSA's own initiative;

26. (25)

    to publish a statement censuring a sponsor;

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27. (26)

    to impose a financial penalty or to issue a statement censuring a person for breach of any requirement set out in LR; and6

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28. (27)

    to object to the acquisition or increase of control under section 186 of the Act (Objection to acquisition of control), to object to existing control under section 187 of the Act (Objecting to existing control) or to attach conditions to an approval to a change in control under section 185 of the Act (Conditions attached to approval) in circumstances where the RDC is already considering or is shortly to consider a closely related matter and it seems appropriate to those making the decision under executive procedures for the RDC to have responsibility for the decision, having regard to such factors as those listed in DEC 1.2.9 G.6

6The RDC has responsibility for statutory notice decisions and statutory notice associated decisions if the FSA takes any of the following actions, but only if the action involves a fundamental (see DEC 4.1.5 G) change to the nature of a permission and the applicant makes representations to the FSA:

1. (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; and

2. (2)

   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).

6The RDC has responsibility for statutory notice decisions and statutory notice associated decisions if the FSA takes any of the following actions but only if the applicant makes representations to the FSA:

1. (1)

   to refuse an application for a Part IV permission or to refuse an application to cancel a Part IV permission;

2. (2)

   to refuse an application for a small e-money issuer certificate (see ELM 8 (Small e-money issuers)); and

3. (3)

   to refuse approved person status.

In DEC 2 Annex 1G,6 DEC 4.1.4 G(2) and (7), DEC 4.1.4A G and DEC 4.1.8 G (5),6 making a fundamental change to the nature of a permission means:

1. (1)

   removing a type of activity or investment from the firm's permission; or

2. (2)

   refusing an application to include a type of activity or investment; or

3. (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. (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.

Statutory notice decisions and statutory noticeassociated decisions which are not taken by the RDC, will be taken under executive procedures.

Examples of matters decided by the RDC include:

1. (1)

   deciding to give a decision notice, 6refusing an application to vary a Part IV permission to carry on insurance business or to accept deposits for the first time in circumstances where the applicant makes representations to the FSA6; in these cases, the firm will normally have been required to complete parts of the application pack (SUP 6.4.14 G);

2. (2)

   deciding to give a decision notice, 6refusing an application to vary a Part IV permission to carry on regulated activities with private customers for the first time in circumstances where the applicant makes representations to the FSA6;

3. (3)

   deciding to give a decision notice, 6refusing 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 in circumstances where the applicant makes representations to the FSA6; and

4. (4)

   varying a Part IV permission on the FSA's own initiative by removing a regulated activity from a firm's permission.

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. (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. (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. (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. (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. (4A)

   in relation to a financial conglomerate, using the own-initiative power to apply one of the methods for calculating capital adequacy in Annex 1 of the Financial Groups Directive (see GENPRU 3.1.30 R7 (Capital adequacy requirement: Use of Part IV permission to apply Annex 1 of the Financial Groups Directive)) or to impose a reporting requirement under SUP 16 (Reporting requirements);3

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6. (5)

   refusing an application to vary a Part IV permission, or restricting6 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) or in a way that would make such a fundamental change in circumstances where the applicant makes no representations to the FSA6;

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7. (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) unless the RDC is already considering or is shortly to consider a closely related matter and it seems appropriate to those making the decision under executive procedures for the RDC to have responsibility for the decision, having regard to such factors as those listed in DEC 1.2.9 G, in which case the decision will be made by the RDC6;

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8. (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;5

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9. (8)

   suspending the listing of securities;

10. (9)

    suspending trading in a financial instrument;

11. (10)

    discontinuing the listing of securities at the issuer's request;

12. (11)

    exercising any of the powers in sections 87K or 87L of the Act in respect of an infringement of any applicable provision;

13. (12)

    cancelling a person's approval as a sponsor at the sponsor's request; and

14. (13)

    refusing an application by an issuer for cancellation of a suspension of listing made under s. 77 of the Act.