In our weekly update for the week ending 30th July 2021 we included commentary on the FCA’s consultation on changes to its decision-making process that will enable it to make faster and more effective decisions. The aim of the proposals is to help the FCA improve how it tackles firms and individuals who do not meet the required regulatory standards. The FCA has now issued the relevant Policy Statement PS21/16: Issuing statutory notices – a new approach to decision makers.
Key points to note
- The FCA consulted on moving some decision-making from its Regulatory Decisions Committee (RDC) to its Authorisations, Supervision and Enforcement Divisions, to allow greater responsibility for decisions to senior members of FCA staff close to the matters.
- Most respondents agreed with the aims of the proposals but did not agree with how the FCA would implement them. There was a concern that speed and efficiency were being emphasised unduly and would increase the potential risk of a lack of fairness and objectivity in decision-making.
- However, having carefully considered whether to make any changes in light of the comments received in consultation, the FCA intends to implement its proposals as consulted on, without amendment.
- The FCA recognises that the desire to intervene more quickly must be balanced with procedural fairness. However, it believes that its Executive Procedures, through which numerous decisions on authorisations and interventions are already made, do provide a fair process.
- As a result, more decisions will be taken by the FCA’s senior managers rather than by the Regulatory Decisions Committee (RDC). The new process will ensure decisions to prevent or stop consumer harm are taken more quickly.
- The FCA’s senior managers are now able to take decisions on the following:
- a firm’s authorisation or an individual’s approval
- action in straightforward cases to cancel a firm’s permissions and that action is contested
- starting civil proceedings, such as seeking an injunction
- starting criminal proceedings, such as a prosecution for insider dealing
- using the FCA’s powers to vary or limit a firm’s permissions
- using the FCA’s powers to impose requirements on a firm
Next actions
None – for information and awareness