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SIFA 15.1 Variation of permission (VOP)

SIFA 15.1.1G

A Part IV permission is granted by us to allow a firm to conduct one or more regulated activities. The permission states the activities that a firm may carry on and also specifies the designated investments that it relates to. Should your firm wish to alter the regulated activities it undertakes, or stop conducting them completely, you must apply to us for a variation, or cancellation of permission. Rules and guidance on this are in SUP 6.

SIFA 15.1.2G

A firm can apply to us to vary its permission if it wants to do one or more of:

  1. (1)

    carry on further regulated activities;

  2. (2)

    reduce the number of regulated activities it is permitted to undertake;

  3. (3)

    vary the description of its regulated activities (including the removal or variation of any limitations); or

  4. (4)

    add, remove or vary any requirement.

SIFA 15.1.3G

Limitations and requirements are covered in AUTH 3.6 and AUTH 3.7 and are also described in Chapter 5 of this Overview. Our powers to vary a firm's Part IV permission on our own initiative are described in SUP Chapter 7.

SIFA 15.1.4G

Under Section 45 of the Act we can vary a firm's permission on our own initiative. This covers imposing a requirement or limitation to a firm's Part IV permission, for example where a firm fails to satisfy one of its threshold conditions, such as in relation to capital adequacy.

SIFA 15.1.5G

If your firm intends to expand its business you should assess, taking appropriate professional advice where necessary, whether you will need to apply to us for a variation of permission before making any changes. If your firm is planning on varying its permission substantially, you should discuss these plans with your usual supervisory contact as early as possible. The supervisory contact for small IFA firms is the Contact Centre.

SIFA 15.1.6G

If your firm applies for a VOP to add new regulated activities, you should bear in mind that it is required to begin the activity within 12 months of being granted a variation of permission. We have the power to alter a firm's permission if it does not adhere to this rule, or if it ceases to provide a permitted regulated activity for a period of 12 months or more (regardless of when the permission was granted). We may also vary a firm's permission for other reasons, for example if it appears the firm is failing to satisfy the Threshold Conditions in relation to one or more of its regulated activities.

SIFA 15.1.7G

If your firm is applying for a VOP that will require a change in the controlled functions of its approved persons, you should also submit the necessary form at the same time as your application for the VOP. For more information on Approved Persons see chapter 7 of this Overview.

Application procedure

SIFA 15.1.8G

An application for a VOP should be made in writing and must contain a statement of the desired variation and of the regulated activity (or activities) that your firm proposes to carry on if its application is successful. Your firm should also explain the reasons and circumstances that have given rise to the request and include any additional information requested by your supervisor during pre-application discussions. You must address and deliver the application to us as explained in SUP 15.7.4 to SUP 15.7.6.

SIFA 15.1.9G

Until the application has been granted, we must be notified immediately your firm becomes aware of any significant change in the information you have given.

SIFA 15.1.10G

As soon as possible after receipt of the application we will advise your firm of any additional information we require. The amount of information we may request will depend on the scale of the variation and its complexity. We have 6 months from receipt to deal with a complete application. However, if the application is incomplete this is extended to 12 months.

SIFA 15.1.11G

We publish typical response times on our website, setting out how long the process is expected to take in practice. Also, from time to time, we will publish our performance against these times. You will find details of our performance against the service standards on our website by clicking on the following: 'Publications'; 'By type'; 'Annual reports'; 'Annual report 2002/03' (or whichever year is relevant); and 'The Performance Account' under the 'Additional information' heading.

SIFA 15.1.12G

SUP 6 Ann 2 provides a flowchart that summarises the procedures for applying for a variation of Part IV permission.

SIFA 15.1.13G

The following section of this Overview is also relevant:

•'Cancellation of permission' - Chapter 15.2.