DEPP 2.5 Provision for certain categories of decision

Some of the decisions referred to in DEPP 2 Annex 1 and DEPP 2 Annex 2 share similar characteristics. For convenience, DEPP 2.5 sets out some of these and the particular features they have.

The decision to give a warning notice and a decision notice in a particular matter will often not be taken by the same decision maker. Certain types of action require that the warning notice decision be taken by FCA6 staff under executive procedures and the decision notice decision be taken by the RDC. Similarly, in enforcement cases the RDC might take the decision to give a warning notice,4 but the decision to give a decision notice could be taken by the settlement decision makers on the basis that the person concerned does not contest the action proposed (see DEPP 5).

FCA6 staff under executive procedures will take the decision to give a warning notice if the FCA6 proposes to:

1. (1)

   refuse an application for a Part 4A permission6 or to refuse an application to cancel a Part 4A permission6;

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2. (2)

   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 4A permission6;

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3. (3)

   refuse an application to vary a Part 4A permission6, or to restrict a Part 4A permission6 on the grant of a variation (by imposing a limitation or a requirement which was not applied for or by specifying a narrower description of regulated activity than that applied for);

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4. (3A)

   refuse an application to vary a requirement imposed under section 55L of the Act, or to impose a new requirement;6

5. (3B)

   exercise its power under section 55L(1) of the Act in connection with an application to the PRA for a Part 4A permission or the variation of a Part 4A permission;6

6. (4)

   refuse approved person status;

7. (4A)

   grant a relevant senior manager application, subject to any conditions or only for a limited period;9

8. (4B)

   refuse an application to vary an approval under section 59 of the Act that was granted subject to conditions;9

9. (5)

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

10. (6)

    refuse an application for variation or rescission of a requirement imposed on an incoming EEA firm.

If no representations are made in response to a warning notice proposing the action set out at DEPP 2.5.3 G within the period specified, a decision notice will be given accordingly: see DEPP 2.3.2 G (Default procedures).

If representations are made in response to a warning notice proposing the action set out at DEPP 2.5.3G (1), DEPP 2.5.3G (4), DEPP 2.5.3G(4A), DEPP 2.5.3G(4B)9 or DEPP 2.5.3G (5), then the RDC will take the decision to give a decision notice.

6If representations are made in response to a warning notice proposing the action set out at DEPP 2.5.3G (3B), FCA staff under executive procedures will take the decision to give a decision notice.

If representations are made in response to a warning notice proposing the action set out atDEPP 2.5.3G (2), DEPP 2.5.3G (3), DEPP 2.5.3G (3A),6 or DEPP 2.5.3G (6), then the RDC will take the decision to give a decision notice if the action involves a fundamental variation or requirement6 (see DEPP 2.5.8 G). Otherwise, the decision to give the decision notice will be taken by FCA6 staff under executive procedures.

6FCA staff under executive procedures will take the decision where the FCA is proposing or deciding to:

1. (1)

   refuse its consent to the granting by the PRA of an application for a Part 4A permission, or give its consent subject to conditions;

2. (2)

   refuse its consent to the granting by the PRA of an application for the variation of a Part 4A permission, or give its consent subject to conditions; or

3. (3)

   refuse its consent to the granting by the PRA of an application to perform a controlled function, or give its consent subject to conditions9.

The RDC will take the decision to give a supervisory notice exercising the FCA's 6 own-initiative powers6 (by removing a regulated activity, by imposing a limitation or requirement or by specifying a narrower description of regulated activity) if the action involves a fundamental variation or requirement6 (see DEPP 2.5.8 G). Otherwise, the decision to give the supervisory notice6 will be taken by FCA6 staff under executive procedures.

3Notwithstanding DEPP 2.5.7 G, FCA6 staff under executive procedures will be the decision maker whenever a firm agrees not to contest the FCA's6 exercise of its own-initiative powers,6 including where the FCA's6 action involves a fundamental variation or requirement.6

A fundamental variation or requirement means:6

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)

   [deleted]6

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4. (4)

   imposing or varying an assets requirement (as defined in section 55P6 of the Act (Prohibitions and restrictions)), or refusing an application to vary or cancel such a requirement.

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9The RDC will take the decision under section 63ZB of the Act to vary an approval given to an SMF manager (by imposing a condition, varying a condition, removing a condition or limiting the period for which the approval is to have effect).

9Notwithstanding DEPP 2.5.7G, FCA staff under executive procedures will be the decision maker whenever all of the interested parties (as defined by section 63ZC(6) of the Act) agree not to contest the FCA’s exercise of its power under section 63ZB of the Act.

9The FCA’s statement of policy on the use of the power to vary an SMF manager’s approval on its own initiative is set out in DEPP 8.

FCA6 staff under executive procedures will take the following statutory notice decisions:

1. (1)

   the refusal of an application for listing of securities;

2. (2)

   the suspension of listing on the FCA's6 own initiative or at the request of the issuer;

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3. (3)

   [deleted]2

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4. (4)

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

5. (5)

   the exercise of any of the powers in sections 87K or 87L of the Act in respect of a breach of any applicable provision; and2

6. (6)

   [deleted]2

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7. (7)

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

The RDC will take statutory notice decisions relating to the discontinuance of listing of securities on the FCA's6 own initiative.

If securities have matured or otherwise ceased to exist the FCA6 will remove any reference to them from the official list. This is a purely administrative process, and not a discontinuance of listing in the sense used in Part 6 of the Act.

Decisions relating to imposition of limitations or other restrictions of sponsors and primary information providers.6

6Under section 88(4)(aa) of the Act, if the FCA proposes to impose limitations or other restrictions on the services to which a sponsor's approval relates, it must give him a warning notice. If, after considering any representations made in response to the warning notice, the FCA decides to impose limitations or other restrictions on the services to which a sponsor's approval relates, it must give him a decision notice. Where the sponsor has requested or otherwise agrees to the limitation or other restriction, FCA staff under executive procedures will take the decision to give the warning notice and decision notice. Otherwise, the RDC will take the decision to give the warning notice and decision notice.

6If the FCA is proposing or deciding to refuse a sponsor's application for the withdrawal or variation of a limitation or other restriction on the services to which a sponsor's approval relates under section 88(8)(d) of the Act, the decision maker will be FCA staff under executive procedures where FCA staff decided to impose the limitation or other restriction. Otherwise, the RDC will take the decision to give the warning notice and decision notice.

6Under section 89P(5)(b) of the Act, if the FCA proposes to impose limitations or other restrictions on the dissemination of regulated information to which a primary information provider's approval relates, it must give him a warning notice. If, after considering any representations made in response to the warning notice, the FCA decides to impose limitations or other restrictions on the dissemination of regulated information to which a primary information provider's approval relates, it must give him a decision notice. Where the primary information provider has requested or otherwise agrees to the limitation or other restriction, FCA staff under executive procedures will take the decision to give the warning notice and decision notice. Otherwise, the RDC will take the decision to give the warning notice and decision notice.

6Under section 89P(9)(d) of the Act, if the FCA is proposing or deciding to refuse a primary information provider's application for the withdrawal or variation of a limitation or other restriction on the dissemination of regulated information to which a primary information provider's approval relates, the decision maker will be FCA staff under executive procedures where FCA staff decided to impose the limitation or other restriction. Otherwise, the RDC will take the decision to give the warning notice and decision notice.

FCA6 staff will usually inform or discuss with the person concerned any action they contemplate before they recommend to the RDC that the FCA6 takes formal action. The FCA6 may also be invited to exercise certain powers by the persons who would be affected by the exercise of those powers. In these circumstances if the person concerned has agreed to or accepted the action proposed then the decisions referred to in DEPP 2.5.13 G will be taken by FCA6 staff under executive procedures rather than by the RDC.

The decisions referred to in DEPP 2.5.12 G are:

1. (1)

   the decision to give a supervisory notice pursuant to section 259(3), (8) or 9(b) (directions on authorised unit trust schemes); section 268(3), 7(a) or 9(a) (directions in respect of recognised overseas schemes); or section 282(3), (6) or (7)(b) (directions in respect of relevant recognised schemes) of the Act;

2. (1A)

   the decision to give a supervisory notice pursuant to section 261Z1(3), (8) or (9)(b) (Procedure on giving directions under section 261X or 261Z and varying them on FCA's own initiative) of the Act;7

3. (2)

   the decision to give a warning notice or decision notice pursuant to section 280(1) or (2)(a) (revocation of recognised investment scheme) of the Act;

4. (3)

   the decision to give a supervisory notice in accordance with regulation 27(3), (8) or 9(b) of the OEIC Regulations;and6

5. (4)

   the decision to give a warning notice or decision notice pursuant to regulation 24 or regulation 28 of the OEIC Regulations.6

6. (4A)

   the decision to give a warning notice or decision notice pursuant to section 255 or 260 of the Act;7

7. (4B)

   the decision to give a warning notice or decision notice pursuant to section 261V or 261Z2 of the Act;7

8. (5)

   [deleted]6

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9. (6)

   [deleted]6

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In determining whether there is agreement to or acceptance of the action proposed, an indication by the following persons will be regarded as conclusive:

1. (1)

   in relation to an authorised unit trust scheme, the manager and trustee;8

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2. (1A)

   in relation to an authorised contractual scheme, the authorised contractual scheme manager and depositary;7

3. (2)

   in relation to an ICVC, the directors and the depositary;8

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4. (3)

   in relation to a recognised scheme, the operator and, if any, the trustee8or depositary.

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A decision to give a warning notice or decision notice refusing an application for an authorisation order declaring a scheme 7 to be an AUT, ACS7 or ICVC2 will be taken by the RDC only if the application is by an authorised fund manager who is not the operator of an existing AUT, ACS7 or ICVC. Otherwise, the decision to give the warning notice or decision notice will be taken by FCA6 staff under executive procedures.2

A notice under paragraph 15A(4) of Schedule 3 to5 the Act relating to the application by an EEA firm for approval to manage a UCITS scheme5 is not a warning notice, but the FCA6 will operate a procedure for this5 notice which will be similar to the procedure for a warning notice.

The FCA6 expects to adopt a procedure in respect of notices under enactments other than the Act which is similar to that for statutory notices under the Act, but which recognises any differences in the legislative framework and requirements. DEPP 2 Annex 1 and DEPP 2 Annex 2 therefore identify notices to be given pursuant to other enactments and the relevant FCA6 decision maker.

Some of the distinguishing features of notices given under enactments other than the Act are as follows:

1. (1)

   [deleted]6

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2. (2)

   [deleted]6

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3. (3)

   Friendly Societies Act 1992, section 58A1: The warning notice and decision notice must set out the terms of the direction which the FCA6 proposes or has decided to give and any specification of when the friendly society is to comply with it. A decision notice given under section 58A(3) must give an indication of the society's right, given by section 58A(5), to have the matter referred to the Tribunal. A decision notice under section 58A(3) may only relate to action under the same section of the Friendly Societies Act 1992 as the action proposed in the warning notice. A final notice under section 390 of the Act must set out the terms of the direction and state the date from which it takes effect. Section 392 of the Act is to be read as if it included references to a warning notice given under section 58A(1) and a decision notice given under section 58A(3).

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4. (4)

   The FCA is only required to give a single supervisory notice under Regulations 28 and 36 of the MiFI Regulations. No representations can be made to the FCA after the issuing of this notice, but the matter can be referred to the Tribunal.10