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

ENF 18.2 The FSA's power to make a disapplication order

ENF 18.2.1G

Under section 329(1) of the Act (Orders in relation to the general prohibition) if it appears to the FSA that a person to whom (as a result of section 327(1) of the Act (Exemption from the general prohibition)) an exemption from the general prohibition applies, is not a fit and proper person to carry on exempt regulated activities, it may make an order under section 329(2) disapplying the exemption to the extent set out in the order.

ENF 18.2.2G

Sections 329(5) and 329(6) are concerned with the effect of disapplication orders on partnerships (including limited liability partnerships). Section 329(5) provides that if a partnership (or limited liability partnership) is named in a disapplication order, the order is not affected by any change in its membership.

ENF 18.2.3G

Under section 329(6) a partnership (or limited liability partnership) named in a disapplication order is dissolved, the order continues to have effect in relation to any partnership (or limited liability partnership) that succeeds to the business of the dissolved partnership (or limited liability partnership). Section 329(7) provides that a partnership will succeed to the business if:

  1. (1)

    the members of the resulting partnership are substantially the same as those of the former partnership; and

  2. (2)

    succession is to the whole or substantially the whole of the business of the former partnership.

ENF 18.2.4G

Section 331(1) (Procedure on making or varying orders under section 329) provides that if the FSA proposes to make a disapplication order, it must give the person concerned a warning notice setting out the terms of the proposed order. The FSA's procedures in DEC 2.2 (Warning notice procedure) will apply.

ENF 18.2.5G

Section 331(3) provides that if the FSA then decides to make a disapplication order it must give the person concerned a decision notice. The FSA's procedures in DEC 2.3 (Decision notice procedure) will apply.

ENF 18.2.6G

Under section 331(9), a person against whom the FSA has decided to make a disapplication order may refer the matter to the Tribunal (see DEC 5.1 (The Tribunal)).