Content Options

Content Options

You are viewing the version of the document as on 2012-08-01.

SUP 6A.1 Application and purpose

Application

SUP 6A.1.1 G

1This chapter applies to a firm:

  1. (1)

    that wishes to apply to the FCA for approver permission; or

  2. (2)

    with approver permission.

SUP 6A.1.2 G

1This chapter will also be of interest to a person who is applying, or is considering applying, for Part 4A permission and who may also wish to apply for approver permission.

Purpose

SUP 6A.1.3 G

1Under sections 21(2A) and 55NA of the Act2 a firm is unable to approve a financial promotion for the purposes of section 21 of the Act unless:

  1. (1)

    the firm has obtained approver permission entitling it to approve that financial promotion; or

  2. (2)

    an approver permission exemption applies.

SUP 6A.1.4 G

1A firm that approves, or purports to approve, a financial promotion other than:

  1. (1)

    in accordance with the terms of its approver permission, if it has such a permission; or

  2. (2)

    within the scope of an approver permission exemption,

is taken to have contravened a requirement imposed on the firm under the Act.

[Note: section 55NA(2) and (11) of the Act]

SUP 6A.1.5 G

1This chapter explains how:

  1. (1)

    a firm can apply for approver permission;

  2. (2)

    a firm with approver permission can apply to the FCA to vary the terms of that approver permission or to cancel it; and

  3. (3)

    the FCA assesses and determines those applications.

SUP 6A.1.6 G

1This chapter also outlines the FCA’s power, on its own initiative, to vary the terms of a firm’s approver permission or to cancel it.

SUP 6A.1.7 G

1This chapter also includes a rule that requires a firm to keep the FCA informed of its plans to approve financial promotions of investments subject to marketing restrictions (SUP 6A.2.19R).

Interaction with other powers

SUP 6A.1.8 G

1Apart from the FCA’s power to grant, vary or cancel approver permission, section 55NA(12) of the Act confirms that the FCA may exercise other powers under the Act to restrict a firm’s ability to approve financial promotions beyond the restriction imposed by section 55NA. For example, the FCA may exercise its power to impose requirements under section 55L of the Act to restrict a firm’s ability to approve financial promotions for which it would not otherwise require approver permission (see SUP 6.3 and SUP 7).

SUP 6A.2 Applications relating to approver permission

Applying for approver permission

SUP 6A.2.1 G
  1. (1)

    1The following persons may apply to the FCA for the grant of approver permission:

    1. (a)

      a firm; or

    2. (b)

      a person whose application for Part 4A permission has yet to be determined.

  2. (2)

    In the case of an applicant for Part 4A permission, the FCA is likely to consider the application for approver permission alongside the application for Part 4A permission.

Determination of applications for approver permission

SUP 6A.2.2 G
  1. (1)

    1The FCA may grant approver permission to a firm enabling it to approve:

    1. (a)

      any financial promotions; or

    2. (b)

      only certain financial promotions.

  2. (2)

    In relation to (1)(b), the FCA may grant approver permission subject to any terms the FCA considers appropriate. This may, in particular, provide for the approver permission to cover only financial promotions relating to certain kinds of controlled investment.

  3. (3)

    Where the FCA grants approver permission only in relation to certain financial promotions this may be:

    1. (a)

      in accordance with the firm’s own application; or

    2. (b)

      because the FCA determines that it is appropriate to grant approver permission on terms which are different to those applied for.

[Note: section 55NA(4) of the Act]

SUP 6A.2.3 G

1If the FCA grants or varies approver permission, the FCA will set out the terms on which the permission is granted, in particular, by describing what kinds of financial promotion the firm is entitled to approve and any conditions applicable to the exercise of the approver permission.

[Note: section 55NA(6) of the Act]

SUP 6A.2.4 G
  1. (1)

    1The FCA may refuse to grant an application for approver permission under section 55NA of the Act, or refuse an application to vary or cancel an existing approver permission, if it appears to the FCA that it is desirable to do so in order to advance one or more of its operational objectives.

  2. (2)

    The FCA can only grant an application for approver permission made by an applicant for Part 4A permission if the applicant obtains authorisation.

[Note: section 55NA(7) of the Act]

SUP 6A.2.5 G

1The FCA will assess an application for approver permission by reference to its operational objectives. In making this assessment, the FCA is likely to have particular regard to:

  1. (1)

    the applicant’s systems, controls and resources (including relevant personnel) relating to the approval of financial promotions;

  2. (2)

    the competence and expertise of relevant individuals;

  3. (3)

    the applicant’s processes (or intended processes) for approving financial promotions; and

  4. (4)

    the applicant’s readiness to comply with the relevant financial promotion rules.

[Note: for the FCA’s guidance on approving financial promotions see: https://www.fca.org.uk/firms/financial-promotions-and-adverts/approving-financial-promotions]

Applicant’s competence and expertise to approve financial promotions

SUP 6A.2.6 G
  1. (1)

    1The FCA ordinarily expects to grant permission only to approve financial promotions relating to controlled investments (or, where relevant, controlled claims management activity) of a kind in relation to which the applicant can demonstrate that it has appropriate competence and expertise to assess compliance with the applicable financial promotion rules.

  2. (2)

    In assessing an applicant’s expertise in (1), the FCA will have regard, among other factors, to the regulated activities for which the applicant has applied for, or for which the applicant has, Part 4A permission.

SUP 6A.2.7 G
  1. (1)

    1The FCA expects a person applying for approver permission to apply only for permission to approve financial promotions:

    1. (a)

      of a kind which the person anticipates they will, in fact, assess for the purposes of giving, or refusing to give, approval (if approver permission is granted); and

    2. (b)

      relating to controlled investments (or, where relevant, controlled claims management activity) of a kind in relation to which the person reasonably believes they have appropriate competence and expertise to assess compliance with the applicable financial promotion rules.

  2. (2)

    In accordance with (1), the FCA discourages applicants from applying for blanket approver permission in respect of financial promotions generally.

Preparing for an application

SUP 6A.2.8 G

1A firm that intends to apply for:

  1. (1)

    approver permission;

  2. (2)

    a variation of its approver permission; or

  3. (3)

    cancellation of its approver permission,

should, consistent with Principle 11 (Relations with regulators), discuss its plans with its supervisory contact at the FCA as early as possible before making an application. These discussions will help the FCA and the firm to agree the correct approach for the firm’s application.

Making an application

SUP 6A.2.9 D
  1. (1)

    1A firm wishing to apply for approver permission, or for a variation or cancellation of its approver permission, must apply online using the relevant form specified on the online notification and application system.

  2. (2)

    Until the application has been determined, a firm which submits an application must inform the FCA of any significant change to the information given in the application immediately after it becomes aware of the change.

  3. (3)

    If the online notification and application system fails and online submission is unavailable for 24 hours or more, until such time as facilities for online submission are restored, a firm must submit the relevant form in SUP 6 Annex 5D in the way set out in SUP 15.7.4R to SUP 15.7.9G (Form and method of notification).

SUP 6A.2.10 G
  1. (1)

    1If the online notification and application system fails and online submission is unavailable for 24 hours or more, the FCA will endeavour to publish a notice on its website confirming that online submission is unavailable and that the alternative methods of submission set out in SUP 15.7.4R to SUP 15.7.9G (Form and method of notification) should be used.

  2. (2)

    Where SUP 6A.2.9D(3) applies to a firm, GEN 1.3.2R (Emergency) does not apply.

SUP 6A.2.11 G

1An applicant for Part 4A permission that also wishes to apply for approver permission should refer to the FCA’s website for information on how to make this application.

SUP 6A.2.12 G

1As soon as possible after receipt of an application for approver permission, the FCA will advise the applicant of any additional information which is required as part of its application. The amount of information required will vary depending on the type of financial promotions in relation to which the applicant is seeking approver permission and the related risk profile of the application.

SUP 6A.2.13 G

1The fees payable by a person applying for approver permission, or an extension of approver permission, are set out in FEES 3 Annex 14R.

How long will an application take?

SUP 6A.2.14 G
  1. (1)

    1Under section 55V(1) of the Act (Determination of applications), the FCA has 6 months to consider a completed application from the date of receipt.

  2. (2)

    If the FCA receives an application which is incomplete (that is, if information or a document required as part of the application is not provided), section 55V(2) of the Act requires the FCA to determine that incomplete application within 12 months of the initial receipt of the application.

  3. (3)

    If the FCA fails to determine an application within the time period specified in section 55V of the Act, this does not mean that approver permission is deemed to be granted.

How will an application be determined?

SUP 6A.2.15 G
  1. (1)

    1A decision to grant an application will be taken by appropriately experienced staff at the FCA. However, if the staff dealing with the application recommend that a firm’s application for approver permission, or for a variation of its approver permission, be either refused or granted on terms other than those applied for, the decision will be subject to the FCA’s formal decision-making process.

  2. (2)

    DEPP gives guidance on the FCA’s decision-making procedures, including the procedures it will follow if it proposes to refuse an application for approver permission either in whole or in part.

Consultation with other regulators

SUP 6A.2.16 G

1Before granting approver permission, or varying or cancelling a firm’s approver permission in response to an application under section 55NA of the Act, the FCA will consult:

  1. (1)

    the PRA, if the applicant is a person:

    1. (a)

      who is, or on the granting of an application for Part 4A permission will be, a PRA-authorised person; or

    2. (b)

      who is a member of a group which includes a PRA-authorised person;

  2. (2)

    the Gibraltar regulator, if the applicant or firm is a Gibraltar-based person (in each case within the meaning of Schedule 2A of the Act).

[Note: section 55NA(9) and (10) of the Act]

Threshold conditions

SUP 6A.2.17 G

1In granting approver permission, the FCA is required by section 55B(3) of the Act to ensure that the applicant or firm satisfies, and will continue to satisfy, the threshold conditions for which the FCA is responsible in relation to all the regulated activities for which the applicant or firm has, or will have, Part 4A permission.

Approvals of financial promotions of investments subject to marketing restrictions

SUP 6A.2.18 G
  1. (1)

    1A firm that applies for permission to approve financial promotions relating to certain types of investment will be asked whether it expects to approve financial promotions relating to:

    1. (a)

      restricted mass market investments; and

    2. (b)

      non-mass market investments.

  2. (2)

    Reference to these categories of investment subject to marketing restrictions is unlikely to form part of a firm’s approver permission.

  3. (3)

    Nevertheless, the FCA expects firms to keep it informed of changes to their plans to approve financial promotions relating to restricted mass market investments and non-mass market investments.

SUP 6A.2.19 R
  1. (1)

    1A firm must give the FCA:

    1. (a)

      reasonable advance notice if it intends to begin approving financial promotions relating to restricted mass market investments or non-mass market investments for the first time; or

    2. (b)

      notice if it ceases approving financial promotions relating to restricted mass market investments or non-mass market investments.

  2. (2)

    A notification in accordance with (1) must be made in the manner set out in SUP 15.7.

SUP 6A.3 FCA’s own-initiative power

SUP 6A.3.1 G

1Where the FCA grants approver permission to a firm under section 55NA of the Act, the FCA may vary the terms of that permission, or cancel it:

  1. (1)

    on the application of the firm to whom it was given; or

  2. (2)

    on the FCA’s own initiative, if it appears to the FCA that:

    1. (a)

      the firm has failed, during a period of at least 12 months, to give, or to refuse to give, any approvals in accordance with its approver permission. In practice, this might arise where:

      1. (i)

        the firm does not appear to have assessed any financial promotions for the purposes of potential approval for a period of at least 12 months; or

      2. (ii)

        the firm has only approved (or refused to approve) financial promotions of a substantially narrower description than the kinds for which it has approver permission; or

    2. (b)

      it is desirable to do so in order to advance one or more of its operational objectives.

[Note: section 55NA(8) of the Act]

SUP 6A.3.2 G

1In deciding whether to vary or cancel a firm’s approver permission on its own initiative, the FCA will take into account all relevant factors in relation to the firm’s business. This may include its business model, the commercial environment and any legitimate explanation for the manner in which the firm has used its approver permission or for its failure to use its approver permission.

SUP 6A.3.3 G
  1. (1)

    1The FCA will consult the PRA before varying or cancelling, on the FCA’s own initiative, the terms of the approver permission of a PRA-authorised person or a member of a group which includes a PRA-authorised person.

  2. (2)

    Where the FCA varies the terms of, or cancels, the approver permission of a Gibraltar-based person on its own initiative, the FCA is not obliged to consult with the Gibraltar regulator but the FCA will inform the Gibraltar regulator in writing of the variation or cancellation.

[Note: section 55NA(9) and (10) of the Act]

SUP 6A.3.4 G
  1. (1)

    1If the FCA exercises its power to vary the terms of a firm’s approver permission on its own initiative, it will do so by issuing a supervisory notice.

  2. (2)

    If the FCA proposes to cancel a firm’s approver permission on its own initiative, it will give the firm a warning notice and, where the FCA decides to cancel, it will give the firm a decision notice.

  3. (3)

    The procedure that will be followed in each case is set out in DEPP 2.

SUP 6A.3.5 G

1A firm has a right of referral to the Tribunal in respect of the FCA exercising its power to vary or cancel a firm’s approver permission on its own initiative.