ENF 3.3 Grounds for exercising the power to vary Part IV permission

Grounds for varying Part IV permission on the FSA's own-initiative are set out in section 45 and 47 of the Act.

Under section 45 of the Act (Variation etc on FSA's own initiative), the FSA may vary a Part IV permission in any of the following cases:

1. (1)

   Case A. Where it appears to the FSA that the firm is failing, or is likely to fail, to satisfy the threshold conditions in relation to one or more, or all, of the regulated activities for which the firm concerned has a Part IV permission;

2. (2)

   Case B. Where it appears to the FSA that the firm concerned has failed, during a period of at least twelve months, to carry on a regulated activity to which the Part IV permission relates;

3. (3)

   Case C. Where it appears to the FSA that it is desirable to vary the Part IV permission in order to protect the interests of consumers or potential consumers in relation to a regulated activity to which the Part IV permission relates.

Under section 47(1) of the Act (Exercise of power in support of overseas regulator), the FSA may exercise its own-initiative power to vary a Part IV permission at the request of, or for the purpose of assisting, a regulator who is:

1. (1)

   outside the United Kingdom; and

2. (2)

   of a kind prescribed in regulations made by the Treasury.

Section 47(1) applies whether or not the FSA has powers which it can exercise in relation to the firm under any provision of Part XIII of the Act, (Incoming firms: Intervention by FSA) (see ENF 4).

If a request to the FSA for the exercise of its own-initiative power is made by a regulator who is:

1. (1)

   outside the United Kingdom;

2. (2)

   of a kind prescribed in regulations made by the Treasury; and

3. (3)

   acting in pursuance of provisions of a kind prescribed in regulations made by the Treasury;

the FSA must, when it decides whether to exercise that power in response to the request, consider whether it is necessary to do so to comply with a Community obligation.

In any case in which the FSA does not consider that the exercise of its own-initiative power is necessary in order to comply with a Community obligation, the FSA may take into account in particular:

1. (1)

   whether in the country or territory of the regulator concerned, corresponding assistance would be given to a UK regulatory authority;

2. (2)

   whether the case concerns the breach of a law, or other requirement, which has no close parallel in the United Kingdom or which involves the assertion of a jurisdiction not recognised by the United Kingdom;

3. (3)

   the seriousness of the case and its importance to persons in the United Kingdom;

4. (4)

   whether it is otherwise appropriate in the public interest to give the assistance sought.

The FSA may decide not to exercise its own-initiative power, in response to a request, unless the regulator concerned undertakes to make whatever contribution towards the cost of its exercise the FSA considers appropriate. However, this does not apply if the FSA decides that it is necessary for it to exercise its own-initiative power in order to comply with a Community obligation.