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DEPP 1.1 Application and Purpose

Application

DEPP 1.1.1 G

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. (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);

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  2. (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 of a Part 4A permission; or (c) to perform a controlled function (see DEPP 2.5.7A G);5

  3. (1B)

    the FCA's decision-making procedure where it is deciding under section 391(1)(c) of the Act to publish information about the matter to which a warning notice relates (see DEPP 3.2.14A G to DEPP 3.2.14H G);5

  4. (2)

    the FCA's5 policy with respect to the imposition and amount of penalties under the Act (see DEPP 6);

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  5. (2A)

    2the FCA's5 policy with respect to the imposition of suspensions, restrictions and disciplinary prohibitions7, and the period for which those sanctions7 are to have effect, under the Act (see DEPP 6A);

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  6. (3)

    the FCA's5 policy with respect to the conduct of interviews by investigators appointed in response to a request from an overseas regulator or an EEA regulator (DEPP 7);6

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  7. (4)

    the FCA’s policy regarding the variation of an SMF manager’s approval on the FCA’s initiative under section 63ZB of the Act (see DEPP 8).6

Purpose

DEPP 1.1.2 G

The purpose of DEPP is to satisfy the requirements of sections 63C(1),2 63ZD(1),6 69(1), 88C(1), 89S(1),5 93(1), 124(1), 131FA,4 131J(1),2 169(9),3 192N(1), 210(1), 312J(1), 345D(1)5 and 395 of the Act that the FCA5 publish the statements of procedure or policy referred to in DEPP 1.1.1 G.

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DEPP 1.2 Introduction to statutory notices

Statutory and related notices1

DEPP 1.2.1 G

Section 395 of the Act (The FCA's and PRA's procedures) requires the FCA2 to publish a statement of its procedure for the giving of statutory notices. The procedure must be designed to secure, among other things, that the decision which gives rise to the obligation to give a statutory notice is taken by a person not directly involved in establishing the evidence on which that decision is based or by two or more persons who include a person not directly involved in establishing that evidence.2 The types of statutory notices and related notices, and the principal references to them in the Act and DEPP are set out in DEPP 1.2.2 G.

DEPP 1.2.2 G

Table: Summary of statutory and related notices

Notice

Description

Act reference

Further information

Warning notice

Gives the recipient details about action that the FCA2 proposes to take and about the right to make representations.

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Section 387

DEPP 2.2

Decision notice

Gives the recipient details about action that the FCA2 has decided to take. The FCA2 may also give a further decision notice if the recipient of the original decision notice consents.

2 2

Section 388

DEPP 2.3

Notice of discontinuance

Identifies proceedings set out in a warning notice or decision notice and which are not being taken or are being discontinued.

Section 389

DEPP 1.2.4 G and DEPP 3.2.26 G

Final notice

Sets out the terms of the action that the FCA2 is taking.

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Section 390

DEPP 1.2.4 G

Supervisory notice

Gives the recipient details about action that the FCA2 has taken or proposes to take, for example to vary a Part 4A permission.2

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Section 395(13)

DEPP 2.2 and DEPP 2.3

DEPP 1.2.3 G

In DEPP the supervisory notice about a matter first given to the recipient is referred to as the "first supervisory notice" and the supervisory notice given after consideration of any representations is referred to as the "second supervisory notice".

DEPP 1.2.4 G

The requirement in section 395 of the Act to publish a procedure for the giving of notices does not extend to the giving of a notice of discontinuance or a final notice. Neither of these notices is a statutory notice for the purposes of DEPP; nor is the decision to give such a notice a statutory notice associated decision.

Decisions relating to applications for authorisation or approval made to the PRA

DEPP 1.2.4A G

2Section 395 of the Act also requires the FCA to publish a statement of its procedure for decisions which give3 rise to an obligation for the PRA to include a statement under section 387(1A) in a warning notice or a statement under section 388(1A) in a decision notice as follows:

  1. (1)

    Section 387(1A) provides that where the FCA proposes to refuse consent for the purposes of section 55F, 55I or 59 of the Act, or to give conditional consent as mentioned in section 55F(5), 55I(8) or 61(2D)3, the warning notice given by the PRA must (a) state that fact, and (b) give the reasons for the FCA's proposal.

  2. (2)

    Section 388(1A) provides that where the FCA has decided to refuse consent for the purposes of section 55F, 55I or 59 of the Act, or to give conditional consent as mentioned in section 55F(5), 55I(8) or 61(2D),3 the decision notice given by the PRA must (a) state that fact, and (b) give the reasons for the FCA's decision.

DEPP 1.2.4B G

2Where an application for Part 4A permission is made to the PRA as the appropriate regulator (section 55A(2)(a) of the Act), the PRA may only give permission with the consent of the FCA (section 55F of the Act). FCA consent can be conditional on the PRA imposing limitations or specifying the permission is for certain regulated activities only.

DEPP 1.2.4C G

2Where an application to vary a Part 4A permission is made to the PRA as the appropriate regulator (section 55A(2)(a) of the Act), the PRA may only give permission with the consent of the FCA (section 55I of the Act). The FCA may withhold its consent to a proposed variation if it appears to it that it is desirable to do so in order to advance one or more of its operational objectives. FCA consent can be conditional on the PRA imposing limitations, or the PRA specifying the permission is for certain regulated activities only.

DEPP 1.2.4D G

2Where an application to perform a controlled function is made to the PRA as the appropriate regulator, the PRA can only approve a person to perform a controlled function with the consent of the FCA (section 59(4)(b) of the Act). Where the application is a relevant senior management application, the FCA’s consent can be conditional on the PRA imposing conditions, or the PRA giving approval only for a limited period.3

DEPP 1.2.4E G

2The procedure must be designed to secure, among other things, that the decision is taken by a person not directly involved in establishing the evidence on which that decision is based, or by two or more persons who include a person not directly involved in establishing that evidence.

The decision makers

DEPP 1.2.5 G

Decisions on whether to give a statutory notice will be taken by a 'decision maker'. The FCA's2 assessment of who is the appropriate decision maker is subject to the requirements of section 395 of the Act and will depend upon the nature of the decision, including its complexity, importance and urgency. References to the 'decision maker' in DEPP are to:

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  1. (1)

    the Regulatory Decisions Committee (RDC); or

  2. (2)

    FCA2 staff under executive procedures; or

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  3. (3)

    FCA2 staff under the settlement decision procedure.

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DEPP 1.2.6 G

The decision maker will also take decisions associated with a statutory notice (a 'statutory notice associated decision'). Statutory notice associated decisions include decisions:

  1. (1)

    to set or extend the period for making representations;

  2. (2)

    on whether the FCA2 is required to give a copy of the statutory notice to any third party and, if so, the period for the third party to make representations; and

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  3. (3)

    on whether to refuse access to FCA2 material, relevant to the relevant statutory notice, under section 394 of the Act.

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DEPP 1.2.6A G

1 Statutory notice associated decisions do not include decisions relating to the publication of a statutory notice.

DEPP 1.2.7 G

In each case, the decision maker will make decisions by applying the relevant statutory tests, having regard to the context and nature of the matter, that is, the relevant facts, law, and FCA2 priorities and policies (including on matters of legal interpretation).

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DEPP 1.2.8 G

The FCA2 will make and retain appropriate records of those decisions, including records of meetings and the representations (if any) and materials considered by the decision makers.

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DEPP 1.2.9 G

DEPP 2 to DEPP 5 set out:

  1. (1)

    which decisions require the giving of statutory notices and who takes them (DEPP 2);

  2. (2)

    the nature and procedures of the RDC (DEPP 3);

  3. (3)

    the procedure for decision making by FCA2 staff under executive procedures (DEPP 4);

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  4. (4)

    the procedure for decision making by FCA2 staff under the settlement decision procedure (DEPP 5).

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