Related provisions for SUP 10C.13.14

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SUP 13.3.7AGRP
20For details of the FCA's procedures for the giving of warning notices or decision notices see DEPP 2 (Statutory notices and the allocation of decision making).
DEPP 6.7.3GRP

  1. (1)

    Subject to DEPP 6.7.3G(4) a settlement discount is available only in cases where a settlement agreement (which may be a focused resolution agreement) is reached during the period from commencement of an investigation until the FCA has:6

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    1. (a)

      a sufficient understanding of the nature and gravity of the breach to make a reasonable assessment of the appropriate penalty; and6

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    2. (b)

      communicated that assessment to the person concerned and given them reasonable opportunity to reach agreement as to the amount of the penalty ("stage 1").6

  2. (2)

    The communication of the FCA's3 assessment of the appropriate penalty for the purposes of DEPP 6.7.3G(1)(b)6 need not be in a prescribed form but will include an indication of the breaches alleged by the FCA3. It may include the provision of a draft warning notice.

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  3. (3)

    Subject to DEPP 6.7.3.G(4), in relation to any settlement agreement other than a focused resolution agreement the reduction in penalty will be as follows:6

    1. (a)

      30% if the agreement is concluded during stage 1; and6

    2. (b)

      0% in any other case.6

  4. (4)

    Where stage 1 has been started but no settlement agreement has been agreed before 1 March 2017:6

    1. (a)

      if any agreement is reached to settle the case between the period from the end of stage 1 until the expiry of the period for making representations, or, if sooner, the date on which the representations are sent in response to the giving of a warning notice, there will be a reduction of 20% in the penalty; and6

    2. (b)

      if any agreement is reached to settle the case between the expiry of the period of making representations, or, if sooner, the date on which representations are sent in response to the giving of a warning notice and the giving of a decision notice, there will be a reduction of 10% in the penalty.6

EG 5.3.1RP
As set out in DEPP 5, special decision-making arrangements apply in relation to settlement. The person concerned may agree all relevant issues with the FCA (in which case the settlement decision makers will give all relevant statutory notices). Alternatively, a focused resolution agreement may be agreed (in which case the settlement decision makers are responsible for giving the warning notice and the RDC for giving any decision notice).2 The FCA would expect to hold any settlement
EG 19.26.6RP
1Where the FCA proposes or decides to take action to publish a statement or impose a financial penalty referred to in EG 19.26.3, it will give the person concerned a warning notice or a decision notice respectively. In the case of a public statement, the warning notice or decision notice will also set out the terms of the statement. In the case of a financial penalty, the warning notice or decision notice will also state the amount of the penalty. On receiving a warning notice,
EG 19.27.8RP
2The AIFMD UK regulation applies the procedural provisions of Part and Part 26 of the Act for matters that can be referred to the Tribunal and to warning and decision notices under the regulations as it applies to referrals and notices under the Act. The AIFMD UK regulation also applies sections 205 and 206 of the Act to unauthorised AIFMs and, accordingly, the FCA will give third party rights (section 393 of the Act) and access to material
EG 19.15.2RP
1When the FCA proposes or decides to censure a person,2 impose a penalty on a person, suspend, cancel or restrict an authorisation or registration or impose a prohibition on a person2 under the Money Laundering Regulations, it must give the person a warning notice or a decision notice2.
RCB 6.1.2GRP
The purpose of this chapter is to set out the FCA's statement of the procedure which it proposes to follow on giving warning notices and decision notices in relation to regulated covered bonds.
EG 5.4.2RP
1Even where action is not taken against connected parties, these parties may have what the Act calls ‘third party rights’. Broadly, if any of the reasons contained in a warning notice or decision notice identifies a person (the third party) other than the person to whom the notice is given, and in the opinion of the FCA is prejudicial to the third party, a copy of the notice must be given to the third party unless that person receives a separate warning notice or decision notice
DEPP 2.4.1GRP
Sections 393 (Third party rights) and 394 (Access to FCA1 material) of the Act confer additional procedural rights relating to third parties and to disclosure of FCA1 material. These rights apply in certain warning notice and decision notice cases referred to in section 392 of the Act (Application of sections 393 and 394). The cases in which these additional rights apply are identified in DEPP 2 Annex 1 by asterisks; these are generally cases in which the warning notice or decision
EG 19.6.1RP
1The RAO sets out those activities which are regulated for the purposes of the Act. Part V of the RAO also requires the FCA to maintain a register of all those people who are not authorised by the FCA but who carry on insurance mediation activities. Under article 95 RAO, the FCA has the power to remove from the register an appointed representative who carries on insurance mediation activities if it considers that he is not fit and proper. The FCA will give the person a warning
EG 19.7.3RP
1The FCA will give a company a warning notice if it proposes to revoke the company’s authorisation and a decision notice if the decision to revoke the company’s authorisation is subsequently taken. The decisions to give a warning notice or a decision notice will be taken by the RDC following the procedures set out in DEPP 3.2 or, where appropriate, DEPP 3.3. A person who receives a decision notice under the OEIC Regulations may refer the matter to the Tribunal.
EG 19.17.3RP
1The FCA's approach to the use of its enforcement powers, and its statement of policy in relation to imposing and determining financial penalties under the RCB Regulations, are set out in RCB 4.2. The FCA's penalty policy includes having regard, where relevant, DEPP 6.5 to DEPP 6.5D and such other specific matters as the likely impact of the penalty on the interests of investors in the relevant bonds. The FCA's statement of procedure in relation to giving warning notices or decision
EG 1.1.2RP
3In the areas set out below, the Act expressly requires the FCA to prepare and publish statements of policy or procedure on the exercise of its enforcement and investigation powers and in relation to the giving of statutory notices. (1) section 63C requires the FCA to publish a statement of its policy on the imposition, and amount, of financial penalties on persons that perform a controlled function without approval; (1-A) 1section 63ZD requires the FCA, among other things, to
DEPP 1.1.1GRP
1This manual (DEPP) is relevant to firms, approved persons and other persons, whether or not they are regulated by the FCA.5 It sets out:5(1) the FCA's5 decision-making procedure for giving statutory notices. These are warning notices, decision notices and supervisory notices (DEPP 1.2 to DEPP 5);5(1A) the FCA's decision-making procedure in cases where the PRA is required to seek the FCA's consent before approving an application (a) for Part 4A permission; (b) for the variation
SUP 12.4.10GRP
(1) 1The FCA has the power to decide not to include on the Financial Services Register (or to remove from the Financial Services Register) an appointed representative whose scope of appointment includes an insurance mediation activity, if it appears to the FCA that he is not a fit and proper person to carry on those activities (article 95 of the Regulated Activities Order).(2) If the FCA proposes to use the power in (1), it must give the appointed representative a warning notice.
CREDS 10.1.3GRP

Module

Relevance to Credit Unions

The Principles for Businesses (PRIN)

The Principles for Businesses (PRIN) set out 3high-level requirements 3imposed by the FCA3. They provide a general statement of regulatory requirements. The Principles apply to all12credit unions. In applying the Principles to credit unions, the FCA3 will be mindful of proportionality. In practice, the implications are likely to vary according to the size and complexity 3of the credit union.

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Senior Management Arrangements, Systems and Controls (SYSC)

SYSC 1,3SYSC 4 to 10 and SYSC 213 apply to all credit unions in respect of the carrying on of their regulated activities and unregulated activities in a prudential context. SYSC 4.5 (Management responsibilities maps for relevant authorised persons), SYSC 4.7 (Senior management responsibilities for relevant authorised persons: allocation of responsibilities), SYSC 4.9 (Handover procedures and material), SYSC 5.2 (Certification regime) and SYSC 18 apply3 to all credit unions in respect of both their regulated activities and their unregulated activities3.

3Code of Conduct (COCON)

This contains rules and guidance that are directly applicable to a credit union’sSMF managers, certification employees and (from 2017) other conduct rules staff. There is also guidance for credit unions on giving their staff training about COCON.

Threshold Conditions (COND)

In order to become authorised under the Act all firms must meet the threshold conditions. The threshold conditions must be met on a continuing basis by credit unions. Failure to meet one of the conditions is sufficient grounds for the exercise by the FCA3 of its powers.

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The Fit and Proper test for Approved Persons (FIT)

The purpose of FIT is to set out and describe the criteria that a firm should3 consider when assessing the fitness and propriety of a person (1)3 in respect of whom an application is being made for approval to undertake a controlled function under the approved persons regime, (2)3 who has already been approved, (3) who is a certification employee or (4) whom a firm is considering appointing to be a certification employee3.

It also sets out and describes criteria that the FCA will consider when assessing the fitness and propriety of a candidate for a controlled function position and that it may consider when assessing the continuing fitness and propriety of approved persons.3

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General Provisions (GEN)

GEN contains rules and guidance on general matters, including interpreting the Handbook, statutory status disclosure, the FCA's3 logo and insurance against financial penalties.

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Fees manual (FEES)

This manual sets out the fees applying to credit unions.

3Prudential sourcebook for Mortgage and Home Finance Firms, and Insurance Intermediaries (MIPRU)

MIPRU applies to any credit union carrying out insurance mediation activity or home finance mediation activity, or using these services. In particular, it sets out requirements for allocation of responsibility for the credit union’sinsurance mediation activity (MIPRU 2), for the use of home finance intermediaries (MIPRU 5) and for professional indemnity insurance (MIPRU 3).

Conduct of Business sourcebook (COBS)

A credit union which acts as a CTF provider or provides a cash-deposit ISA will need to be aware of the relevant requirements in COBS. COBS 4.6 (Past, simulated past and future performance), COBS 4.7.1 R (Direct offer financial promotions), COBS 4.10 (Systems and controls and approving and communicating financial promotions), COBS 13 (Preparing product information) and COBS 14 (Providing product information to clients) apply with respect to accepting deposits as set out in those provisions, COBS 4.1 and BCOBS. A credit union that communicates with clients, including in a financial promotion, in relation to the promotion of deferred shares and credit union subordinated debt will need to be aware of the requirements of COBS 4.2 (Fair, clear and not misleading communications) and COBS 4.5 (Communicating with retail clients).4

3Insurance: Conduct of Business sourcebook (ICOBS)

ICOBS applies to any credit union carrying on non-investment insurance activities, such as arranging or advising on general insurance contracts to be taken out by members. But ICOBS does not apply to a credit union taking out an insurance policy for itself, such as a policy against default by members on their loans where the credit union is the beneficiary of the policy, since in this circumstance the credit union would not be acting as an insurance intermediary, but would itself be the customer. Credit unions are reminded that they are subject to the requirements of the appropriate legislation, including the Credit Unions Act 1979, relating to activities a credit union may carry on.

3Mortgages and Home Finance: Conduct of Business sourcebook (MCOB)

MCOB applies to any credit union that engages in any home finance activity. MCOB rules cover advising and selling standards, responsible lending (including affordability assessment), charges, and the fair treatment of customers in payment difficulties.

Banking: Conduct of Business sourcebook (BCOBS)

BCOBS sets out rules and guidance for credit unions on how they should conduct their business with their customers. In particular there are rules and guidance relating to communications with banking customers3and financial promotions (BCOBS 2), distance communications (BCOBS 3), information to be communicated to banking customers3(BCOBS 4), post sale requirements (BCOBS 5), and cancellation (BCOBS 6). 3The rules in BCOBS 3.1 that relate to distance contracts may apply 3to a credit union. This is because the Distance Marketing Directive3applies where there is "an organised distance sales or service-provision scheme run by the supplier" (Article 2(a)), i.e. if the credit union routinely sells any of its services by post, telephone, fax or the internet3.

Supervision manual (SUP)

The following provisions of SUP are relevant to credit unions: 13SUP 1A13 (The FCA’s 3 approach to supervision), SUP 2 (Information gathering by the FCA or PRA 3 on its own initiative), SUP 3.1 to SUP 3.8 (Auditors), SUP 5 (Skilled persons), SUP 6 (Applications to vary or cancel Part 4A12permission), SUP 7 (Individual requirements), SUP 8 (Waiver and modification of rules), SUP 9 (Individual guidance), 13SUP 10C (FCA senior management regime for approved persons in relevant authorised persons),3SUP 11 (Controllers and Close links), SUP 15 (Notifications to the FCA or PRA 3) and SUP 16 (Reporting Requirements).

Credit unions are reminded that they are subject to the requirements of the Act and SUP 11 on close links, and are bound to notify the FCA3 of changes. It may be unlikely, in practice, that credit unions will develop such relationships. It is possible, however, that a person may acquire close links with a 3credit union3 within the meaning of the Act by reason of holding the prescribed proportion of deferred shares in the credit union.

In relation to SUP 16, credit unions are exempted from the requirement to submit annual reports of 3close links.

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3Consumer Credit sourcebook (CONC)

CONC contains rules that apply to firms carrying on credit-related regulated activities. PERG 2.7.19IG provides guidance on relevant exemptions. Most credit union lending is therefore outside the scope of CONC. However, subject to the constraints in the Credit Unions Act 1979 or the Credit Unions (Northern Ireland) Order 1985 (as relevant), credit unions may undertake credit-related regulated activities to which CONC does apply if the activity is carried out by way of business. This could include lending under a borrower-lender-supplier agreement, or debt adjusting or debt counselling where the credit union is not the lender. A credit union carrying on such activities should consider whether it requires permission to do so. Further information can be found on the FCA’s website.

Decision, Procedure and Penalties manual (DEPP)

DEPP is relevant to credit unions because it sets out:

(1) the FCA's12 decision-making procedure for giving statutory notices. These are warning notices, decision notices and supervisory notices (DEPP 1.2 to DEPP 5); and

(2) the FCA's12 policy with respect to the imposition and amount of penalties under the Act (see DEPP 6).

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Dispute Resolution: Complaints (DISP)

DISP sets out rules and guidance in relation to treating complainants fairly and the Financial Ombudsman Service.

Compensation (COMP)

COMP sets out rules relating to the scheme for compensating consumers when authorised firms are unable, or likely to be unable, to satisfy claims against them.12

The Enforcement Guide (EG)

The Enforcement Guide (EG) describes the FCA's12 approach to exercising the main enforcement powers given to it by the Act and by other legislation.2

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Financial crime: a guide for firms (FC)

FC provides guidance on steps that a firm can take to reduce the risk that it might be used to further financial crime.