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DEPP 5.1 Settlement decision makers

Introduction

DEPP 5.1.1 G

  1. (1)

    1A person subject to enforcement action may agree to a financial penalty or other outcome rather than contest formal action by the FCA.4

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  2. (2)

    The fact that he does so will not usually obviate the need for a statutory notice recording the FCA's4 decision to take that action. Where, however, the person subject to enforcement action agrees not to contest the content of a proposed statutory notice, the decision to give that statutory notice will be taken by senior FCA4 staff.

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  3. (3)

    The decision will be taken jointly by two members of the FCA's4 senior management, one of whom will be3 of at least director of division level (which may include an acting director)2 and the other of whom will be of at least head of department level3 (the "settlement decision makers").

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  4. (4)

    At least one of the settlement decision makers will not be from the Enforcement and Financial Crime Division.3 The other settlement decision maker3 will usually be, but need not be, from the Enforcement and Financial Crime Division. A4settlement decision maker will not have been directly involved in establishing the evidence on which the decision is based.3

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  5. (5)

    "Statutory notice" for these purposes:

    1. (a)

      means any statutory notice the giving of which would otherwise require a decision by the RDC;

    2. (b)

      includes a statutory notice associated decision.

Procedure: general

DEPP 5.1.2 G

A person who is or may be subject to enforcement action may wish to discuss the proposed action with FCA4 staff through settlement discussions.

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DEPP 5.1.3 G

Settlement discussions may take place at any time during the enforcement process if both parties agree. This might be before the giving of a warning notice, before a decision notice, or even after referral of the matter to the Tribunal. But the FCA4 would not normally agree to detailed settlement discussions until it has a sufficient understanding of the nature and gravity of the suspected misconduct or issue to make a reasonable assessment of the appropriate outcome. Settlement after a decision notice will be rare.

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DEPP 5.1.4 G

FCA 4staff and the person concerned may agree that neither the FCA4 nor the person concerned would seek to rely against the other on any admissions or statements made in the course of their settlement discussions if the matter is considered subsequently by the RDC or the Tribunal.

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Procedure: participation of decision makers in discussions

DEPP 5.1.5 G

  1. (1)

    The settlement decision makers may, but need not, participate in the discussions exploring possible settlement.

  2. (2)

    If the settlement decision makers have not been involved in the discussions, but an agreement has been reached, they may ask to meet the relevant FCA4 staff or the person concerned in order to assist in the consideration of the proposed settlement.

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DEPP 5.1.6 G

The terms of any proposed settlement:

  1. (1)

    will be put in writing and be agreed by FCA4 staff and the person concerned;

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  2. (2)

    may refer to a draft of the proposed statutory notices setting out the facts of the matter and the FCA's4 conclusions;

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  3. (3)

    may, depending upon the stage in the enforcement process at which agreement is reached, include an agreement by the person concerned to:

    1. (a)

      waive and not exercise any rights under sections 387 (Warning notices) and 394 (Access to Authority material) of the Act to notice of, or access to, material relied upon by the FCA4 and any secondary material which might undermine the FCA4 decision to give the statutory notice;

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    2. (b)

      waive and not exercise any rights under section 387 of the Act or otherwise to make representations to the RDC in respect of a warning notice or first supervisory notice;

    3. (c)

      not object to the giving of a decision notice before the expiry of the 144 day period after the giving of a warning notice specified under section 387 of the Act;

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    4. (d)

      not dispute with the FCA4 the facts and matters set out in a warning notice, decision notice, supervisory notice or final notice and to waive and not exercise any right under section 208 (Decision notice) of the Act to refer the matter to the Tribunal.

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DEPP 5.1.7 G

The settlement decision makers may:

  1. (1)

    accept the proposed settlement by deciding to give a statutory notice based on the terms of the settlement; or

  2. (2)

    decline the proposed settlement;

whether or not the settlement decision makers have met with the relevant FCA4 staff or the person concerned.

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DEPP 5.1.8 G

  1. (1)

    Where the settlement decision makers decline to issue a statutory notice despite the proposed settlement, they may invite FCA4 staff and the person concerned to enter into further discussions to try to achieve an outcome the settlement decision makers would be prepared to endorse.

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  2. (2)

    However, if the proposed action by the FCA4 has been submitted to the RDC for consideration, it will be for the RDC to decide:

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    1. (a)

      whether to extend the period for representations in response to a warning notice or first supervisory notice; or

    2. (b)

      if representations have been made in response to a warning notice or first supervisory notice, whether to proceed to give a decision notice or second supervisory notice.

Settlement by mediation

DEPP 5.1.9 G

The FCA4 and other parties may agree to mediation as a way of facilitating settlement in appropriate cases.

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Third party rights

DEPP 5.1.10 G

  1. (1)

    DEPP 2.4 sets out the FCA's4 approach to giving third parties copies of statutory notices pursuant to section 393 (Third party rights) of the Act.

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  2. (2)

    The decision to give a warning notice or a decision notice to a third party is a statutory notice associated decision.

  3. (3)

    In cases therefore where the decision to give a warning notice or decision notice is taken by settlement decision makers, those decision makers will decide whether a copy of the notice should be given to a third party in accordance with section 393 of the Act. Any representations made by the third party in response to a warning notice will be considered by the settlement decision makers