REC 3.3 Waivers

Under section 294 of the Act (Modification or waiver of rules), the FCA1 may, on the application or with the consent of a recognised body (including an ROIE),1 direct that any notification rule is not to apply to the body or is to apply with such modifications as may be specified in the waiver.

A waiver given under section 294 of the Act may be made subject to conditions.

Under section 294(4) of the Act, before the FCA1 may give a waiver of notification rules, it must be satisfied that:

1. (1)

   compliance by the recognised body with those notification rules, or with those rules as unmodified, would be unduly burdensome or would not achieve the purpose for which those rules were made; and

2. (2)

   the waiver would not result in undue risk to persons whose interests those rules are designed to protect.

Where a recognised body wishes to make an application to the FCA1 for a waiver of a notification rule, it should in the first instance inform its usual supervisory contact at the FCA.1

There is no application form, but applicants should make their application formally and in writing and in accordance with any direction the FCA1 may make under section 294(2) of the Act. Each application should set out at least:

1. (1)

   full particulars of the waiver which is requested;

2. (2)

   the reason why the recognised body believes that the criteria set out in section 294(4) (and described in REC 3.3.3 G) would be met, if this waiver were granted; and

3. (3)

   where the recognised body believes that these criteria would be met if the FCA1 gave a waiver under section 294 subject to any condition, particulars of the kind of condition contemplated.

   1

The FCA1 may request further information from the applicant, before deciding whether to give a waiver under section 294 of the Act.

Any waiver given by the FCA1 under section 294 of the Act will be made in writing, stating:

1. (1)

   the name of the recognised body in respect of which the waiver is made;

2. (2)

   the notification rules which are to be waived or modified in respect of that body;

3. (3)

   where relevant, the manner in which any rule is to be modified;

4. (4)

   any condition or time limit to which the waiver is subject; and

5. (5)

   the date from which the waiver is to take effect.

Where the FCA1 considers that it will not give the waiver which has been applied for, the FCA1 will give reasons to the applicant for its decision. The FCA1 will endeavour, where practicable, to inform an applicant in advance where it seems that an application is likely to fail unless it is amended or expanded, so that the applicant will have the opportunity to make any necessary amendments or additions before the application is considered.

Where the FCA1 wishes to give a waiver under section 294 of the Act with the consent of a recognised body (rather than on the application of a recognised body), the FCA1 will correspond or discuss this with that body in order to agree an appropriate waiver.

The FCA1 will periodically review any waiver it has given. The FCA1 has the right to revoke a waiver under section 294(6) of the Act. This right is likely to be exercised in the event of a material change in the circumstances of the recognised body or in any fact on the basis of which the waiver was given.