SUP 8.3 Applying for a waiver

Under section 148(4) of the Act, the FSA may not give a waiver unless it is satisfied that:

1. (1)

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

2. (2)

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

Even if the conditions in section 148(4) of the Act are satisfied, the FSA will consider other relevant factors before giving a waiver, such as whether the waiver would be compatible with European law, including relevant EC Directives.2

The FSA is required by section 148(6) of the Act to publish a waiver unless it is satisfied that it is inappropriate or unnecessary to do so (see SUP 8.6).

1. (1)

   The FSA's preferred method of submission for waiver applications is by e-mail or by online submission at www.fsa.gov.uk.4

2. (2)

   The form is available on the FSA's website (see FSA/docs/sup/w_form.doc).3

Before sending in a waiver application, a firm may find it helpful to discuss the application with its usual supervisory contact at the FSA. However, the firm should still ensure that all relevant information is included in the application.

The FSA will acknowledge an application promptly and if necessary will seek further information from the firm. The time taken to determine an application will depend on the issues it raises. However, the FSA will aim to give waiver decisions within 20 business days of receiving an application which includes sufficient information. If the FSA expects to take longer, it will tell the firm and give an estimated decision date. A firm should make it clear in the application if it needs a decision within a specific time.

The FSA will treat a firm's application for a waiver as withdrawn if it does not hear from the firm within 20 business days of sending a communication which requests or requires a response from the firm. The FSA will not do this if the firm has made it clear to the FSA in some other way that it intends to pursue the application. 3

In some cases, the FSA may give a modification of a rule rather than direct that the rule is not to apply. The FSA may also impose conditions on a waiver, for example additional reporting requirements. A waiver may be given for a specified period of time only, after which time it will cease to apply. A firm wishing to extend the duration of a waiver should follow the procedure in SUP 8.3.3 D. A waiver will not apply retrospectively.

If the FSA decides not to give a waiver, it will give reasons for the decision.

A firm may withdraw its application at any time up to the giving of the waiver. In doing so, a firm should give the FSA its reasons for withdrawing the application.

If the FSA believes that a particular waiver given to a firm may have relevance to other firms, it may publish general details about the possible availability of the waiver. For example, IPRU(INV) 3-80(10)G explains that a firm that wishes to use its own internal model to calculate its position risk requirement (PRR) will need to apply for a waiver of the relevant rules.

Under section 148(2) of the Act the FSA may give a waiver with the consent of a firm. This power may be used by the FSA in exceptional circumstances where the FSA considers that a waiver should apply to a number of firms (for example, where a rule unmodified may not meet the particular circumstances of a particular category of firm). In such cases the FSA will inform the firms concerned that the waiver is available, either by contacting firms individually or by publishing details of the availability of the waiver on the FSA's website The firms concerned will not have to make a formal application but will have to give their written consent for the waiver to apply.

An application for a waiver of an evidential provision will normally be granted only if a breach of the underlying binding rule is actionable under section 150 of the Act. Individual guidance would normally be a more appropriate response (see SUP 9 (Individual Guidance)) if there is no right of action.2

An application for a waiver of the presumption of compliance created by an evidential provision would not normally be granted.2

For an application for a waiver of the presumption of contravention of a binding rule, which is actionable under section 150 of the Act, the FSA would normally wish to be satisfied that the evidential rule is itself unduly burdensome or does not achieve the purpose of the rule.2

In the case of an application for a waiver of a two-way evidential provision relating to an actionable binding rule, the policy in SUP 8.3.12 G would apply to the presumption of compliance and the policy in SUP 8.3.13 G would apply to the presumption of contravention. In other words, any modification is likely to be in relation to the second presumption only.2