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Status: You are viewing the version of the handbook as on 2005-06-30.

DEC 4.5 Delegation of RDC decisions and modified RDC procedures

DEC 4.5.1G

The making of the following types of statutory noticedecisions and statutory notice associated decisions falling within DEC 4.1.4 G (Decisions to be taken by the RDC) will be discharged, on behalf of the RDC, by the Chairman of the RDC or FSA staff, so that they will be made by modified rather than full RDC procedure:

  1. (1)

    in relation to warning notices and decision notices:

    1. (a)

      those relating to financial penalties for late submission of reports (see DEC 4.5.2 G to DEC 4.5.6 G);

    2. (b)

      those relating to the revocation of recognition of section 270 or 272 recognised schemes, where there is a common understanding between the scheme management and the FSA about the need for revocation (see DEC 4.5.14 G to DEC 4.5.15 G);

  2. (2)

    in relation to supervisory notices:

    1. (a)

      those involved in taking urgent action by supervisory notice (see DEC 4.5.7 G and DEC 4.5.8 G);

    2. (b)

      those relating to the use of the FSA's own-initiative power and other cases involving the imposition of requirements, where there is a common understanding between the FSA and the person concerned about the need for the action (see DEC 4.5.9 G to DEC 4.5.13 G).

Financial penalties for late submission of reports

DEC 4.5.2G

When the FSA decides whether to impose a financial penalty on a firm for the late submission of a report (regardless of the period of delay), FSA staff will report on the late submission to at least one other member of staff who is:

  1. (1)

    at a level senior to that of the member of staff who reports on the late submission and on the reasons for it; and

  2. (2)

    not directly involved in the day-to-day supervision of the firm concerned, or in establishing the evidence on which the decision is based.2

DEC 4.5.3G

FSA staff at the appropriate level of seniority will consider the report about the late submission. They will then decide whether a financial penalty is appropriate and, if so, its amount. If they decide a penalty is appropriate, the FSA will give a warning notice.

DEC 4.5.4G

If the firm makes representations in relation to the penalty stated in the warning notice, the matter will be referred to the Chairman or Deputy Chairman of the RDC. The Chairman or Deputy Chairman of the RDC will decide whether to confirm the penalty stated in the warning notice or that the penalty should be of a different amount and, if so, give a decision notice.

DEC 4.5.5G

If the firm makes no representations, by the time a decision is to be made about the giving of a decision notice, then the decision maker may regard the matters in the warning notice as undisputed. A decision notice will be given accordingly.3

DEC 4.5.6G

If the firm objects to the decision notice, it may refer the matter to the Tribunal. The right to refer a matter to the Tribunal is outlined in DEC 5.1.

Supervisory notices: urgent cases

DEC 4.5.7G

If FSA staff recommend action be taken and they consider that the decision is the RDC's responsibility:

  1. (1)

    in general, but subject to the need to act swiftly in urgent cases, the FSA staff's recommendation will go before an RDC panel;

  2. (2)

    in an urgent case, if, in FSA staff's opinion, the action proposed should occur before it is practicable to convene an RDC panel, the FSA staff's recommendation will be considered by the RDC's Chairman or a Deputy Chairman of the RDC and, where possible, but subject to the need to act swiftly, one other RDC member;

  3. (3)

    in an exceptionally urgent case, where in the FSA's opinion:

    1. (a)

      the action should be taken before a recommendation to the Chairman or a Deputy Chairman1 of the RDC can be made; and

    2. (b)

      an urgent decision on the proposed action is necessary to protect the interests of consumers;

    the FSA staff's recommendation will be considered by a member of the FSA's executive of at least director of division level. In these circumstances, the FSA will ensure as far as possible that the executive making the decision was not involved in establishing the evidence on which the decision is based.

DEC 4.5.8G

If the executive making the decision has been involved in establishing the evidence on which the decision is based, and a notice is given on the grounds of urgency, this will be in accordance with DEC 4.3.17 G to DEC 4.3.19 G.

Supervisory notices: non-urgent cases

DEC 4.5.9G

In certain other cases, including cases relating to collective investment schemes (see DEC 4.5.14 G to DEC 4.5.15 G), FSA staff may be in a position to inform the person concerned of their concerns, and of the action they are considering, before they begin to exercise supervisory notice procedures. If the person concerned consents to the action at that stage, FSA staff may decide to use the modified decision making procedure in DEC 4.5.10 G to DEC 4.5.13 G.

DEC 4.5.10G

FSA staff will make recommendations for action to at least one other member of staff who is:

  1. (1)

    at an appropriate level of seniority; and

  2. (2)

    not directly involved in the supervision of the person concerned, or in establishing the evidence on which the decision is based.

DEC 4.5.11G

FSA staff at the appropriate level of seniority will consider the recommendations. If they are satisfied that the person concerned agrees to the recommended action, they will consider whether the FSA should give a first supervisory notice (see DEC 3.1.3 G to DEC 3.1.7 G).

DEC 4.5.12G

If FSA staff decide to give the first supervisory notice and the person concerned accepts its terms, the FSA will then consider whether to give a second supervisory notice (see DEC 3.1.8 G to DEC 3.1.10 G) confirming the decision.

DEC 4.5.13G

The FSA will only give the second supervisory notice when it is satisfied that the person concerned accepts the terms of the first supervisory notice, and the circumstances of the case have not materially changed since that notice was given. If FSA staff are not satisfied, or circumstances of the case have changed, they will refer the possible giving of a second supervisory notice to the RDC. In such cases the RDC will follow the process in DEC 3.1.8G to DEC 3.1.10G.

Modified procedures in collective investment scheme cases

DEC 4.5.14G

In DEC 4.5.15 G, the term "scheme management" refers:

  1. (1)

    in relation to an AUT, to the manager and trustee;

  2. (2)

    in relation to an ICVC, to the directors and the depositary;

  3. (3)

    in relation to a recognised scheme, to the operator, and (if any) the trustee or depositary.

DEC 4.5.15G

In certain cases where it is proposing to exercise its powers under section 257 (Directions), 279 (Revocation of recognition) or 281 (Directions) of the Act or under regulation 23 or 25 of the OEIC Regulations, the FSA may be in a position to inform the scheme management of its concerns, and of the action it is considering, before it exercises those powers. Alternatively, the scheme management may request the FSA to exercise one of the powers. For example, the manager and the trustee of an AUT may ask the FSA to give a direction under section 257(2)(a) for the suspension of the issue and redemption of units because of a temporary problem in valuing the property subject to the scheme. If there is a common understanding between the FSA and all the members of the scheme management about the need for the exercise of the power in question at that stage (that is, before the FSA begins to exercise the statutory procedures), the FSA may:

  1. (1)

    in the case of the exercise of its powers under sections 257 or 281 or under regulation 25, decide to use the modified decision making procedure for non-urgent supervisory notices in DEC 4.5.9 G to DEC 4.5.13 G; or

  2. (2)

    in the case of the exercise of its powers under section 279 or regulation 23, decide to use a modified decision making procedure under which the matter will be delegated to FSA staff of an appropriate level of seniority. The procedure will be as set out in DEC 4.5.9 G to DEC 4.5.13 G but adapted to be appropriate for a case involving a warning notice and decision notice.