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Status: You are viewing the version of the handbook as on 2009-03-31.

CRED 14.5 Applications to vary or cancel Part IV permission

Application and purpose

CRED 14.5.1G

This section and SUP 6 apply to all credit unions with a Part IV permission that wish to;

  1. (1)

    vary their Part IV permission; or

  2. (2)

    cancel their Part IV permission and end their authorisation.

CRED 14.5.2G

This section is a summary of SUP 6.

CRED 14.5.3G

This section explains:

  1. (1)

    how a credit union can apply to vary or cancel its Part IV permission;

  2. (2)

    the additional procedures that apply to a credit union that needs to wind down its business over a long time period (usually more than six months);

  3. (3)

    how the FSA assesses those applications.

CRED 14.5.4G

A version 1 credit union that wishes to become a version 2 credit union will need to apply to vary it's Part IV permission.

Introduction

CRED 14.5.5G

A credit union authorised under Part IV of the Act (Permission to carry on regulated activities) has a single permission granted by the FSA, which contains a description of the activities the credit union may carry on, including any limitations.

Applications for variation of permission

CRED 14.5.6G

A credit union may apply to the FSA to vary its Part IV permission.

CRED 14.5.7G

SUP 6.3.15 D states that the application must be in writing and addressed and delivered in the way set out in SUP 15.7.4 R - SUP 15.7.6 G (summarised in CRED 14.9.19 G).

CRED 14.5.8G

A credit union is advised to discuss its application with the Credit Union team at the FSA before submission, particularly if it is seeking a variation of permission within a short time scale. It is also advised to include as much detail as possible with its application. A version 1 credit union that wishes to become a version 2 credit union will typically need to supply information on the matters referred to in CRED 13.6.2 G.

CRED 14.5.9G

The FSA, as soon as possible after receipt of an application, will advise the credit union of any additional information which is required as part of its application. The amount of information that the FSA will require will vary depending on the nature of the variation.

CRED 14.5.10G

The FSA may refuse the application if it appears that the interests of members would be adversely affected if the application were to be granted.

CRED 14.5.11G

The FSA may vary or impose limitations or requirements on a credit union's permission.

CRED 14.5.12G

The FSA has six months to consider a completed application, or 12 months if the application in incomplete.

CRED 14.5.13G

Within these time limits, however, the length of the process will vary according to the complexity of the variation requested.

CRED 14.5.14G

At any time after receiving an application and before determining it, the FSA may require the applicant to provide additional information or documents. The circumstances of each application will dictate what additional information or procedures are appropriate.

Applications for cancellation of permission

CRED 14.5.15G

If a credit union with a Part IV permission applies to the FSA, the FSA may cancel its permission.

CRED 14.5.16G

The FSA may refuse such an application if it appears that:

  1. (1)

    the interests of members, or potential members, would be adversely affected; and

  2. (2)

    it is desirable in the interests of members or potential members for the application to be refused.

CRED 14.5.17G

SUP 6.4.5 D states that if a credit union wishes to cancel its permission, it must write to the FSA giving the reasons and the date on which the credit union has ceased or expects to cease carrying on regulated activities. The credit union must explain the full circumstances of its application.

CRED 14.5.18G

SUP 6.4.5 D states that a credit union's application for cancellation of its permission must be given to a member of, or addressed for the attention of, the Corporate Authorisation Resignation team at the FSA.

CRED 14.5.19G

The credit union's usual supervisory contact at the FSA will, however, be responsible for all day-to-day contact with the credit union and for assessing the application.

CRED 14.5.20G

When it receives this application, the Corporate Authorisation Resignation team will send the credit union a written acknowledgement. This acknowledgement will explain the cancellation process and detail the information required as part of the application.

CRED 14.5.21G

The FSA may request confirmation from the credit union that there are no unresolved, unsatisfied or undischarged complaints against the credit union from a member.

CRED 14.5.22G

SUP 6.4.14 G states that it is an offence for a person knowingly or recklessly to give the FSA information that is false or misleading. If necessary a credit union should take appropriate professional advice when supplying information required by the FSA.

CRED 14.5.23G

The FSA may require additional information, including professional advice where it considers this appropriate.

CRED 14.5.24G

The FSA will usually not cancel a credit union's permission until the credit union can demonstrate that it has:

  1. (1)

    ceased carrying on regulated activities;

  2. (2)

    repaid all shares and deposits;

  3. (3)

    discharged, satisfied or resolved complaints against the credit union.

CRED 14.5.25G

In deciding whether to cancel a credit union'spermission, the FSA will take into account all relevant factors in relation to business carried on under that permission, including those set out in SUP 6.4.22 G.

CRED 14.5.26G

If the FSA has granted an application for cancellation of permission and withdrawn a credit union's status as an authorised person, it will retain certain investigative and enforcement powers in relation to the credit union, including those set out in SUP 6.4.23.

CRED 14.5.27G

The FSA has six months to consider a completed application or 12 months if the application is incomplete.

CRED 14.5.28G

Within these time limits, however, the length of the process will vary according to the complexity of the circumstances.

Ending authorisation

CRED 14.5.29G

If the FSA cancels a credit union'spermission, leaving it without permission to carry out a regulated activity, the FSA is required to withdraw the credit union's authorisation.

Additional guidance

CRED 14.5.30G

SUP 6 Annex 4 provides additional guidance for a credit union winding down (running off) its business.

CRED 14.5.31G

If a credit union requires a long term period (usually in excess of six months) in which to wind down (run off) its business, it will usually be appropriate for it to apply for a variation in its permission.

CRED 14.5.32G

A credit union should discuss its plans with its usual supervisory contact at the FSA.

CRED 14.5.33G

The FSA may vary a credit union's permission to impose a limitation on accepting new deposits.

CRED 14.5.34G

The annexes to CRED 15 provide tables setting out the FSA's enforcement powers, including those to cancel or suspend registration, vary or cancel permission and withdraw authorisation.