On 29 July 2021, the FCA published Consultation Paper 21/25: Changes to the FCA’s decision-making procedure (CP21/25).
In CP21/25 the FCA is setting out proposals to move some decision making from its Regulatory Decisions Committee (RDC) to its Authorisations, Supervision and Enforcement Divisions. These decisions include:
- Imposing a requirement on a firm or varying its permissions by limiting or removing certain types of business.
- Making a final decision in relation to a firm’s application for authorisation or an individual’s approval that has been challenged.
- Making a final decision to cancel a firm’s permissions because a firm does not meet the FCA’s regulatory requirements.
- The decision to start civil and/or criminal proceedings.
As a result of these changes, the RDC would focus on significant misconduct cases, where the harm has already materialised and the subject needs to be penalised for the failure. These cases could involve proposals to impose a sanction or disciplinary measure against a firm or individual. The FCA Authorisations, Supervision and Enforcement Divisions would focus on situations where the FCA needs to intervene to prevent or stop harm, or prevent harm from increasing, to consumers or the market, where the exercise of a power involves making regulatory judgments. This may be through the use of the FCA’s statutory intervention powers, or through its authorisation and cancellation decisions as well as action through the civil and criminal courts. These matters will often involve the FCA needing to act decisively and swiftly.
The deadline for responding to CP21/25 is 17 September 2021.
The FCA will consider the feedback to CP21/25 and expects to publish a Policy Statement in or around November 2021. At that point, the FCA proposes that any cases being considered by the RDC would remain with the RDC. When considering those cases, the RDC will follow its stated procedures. This includes any cases where a warning notice has been issued before that date which refers to making representations to the RDC.
The FCA has also issued a press release regarding CP21/25.
Emily Shepperd, Executive Director of Authorisations said:
‘The proposed changes will allow us to be more efficient by making best use of the breadth of expertise across the FCA and by putting certain decisions back to the subject matter experts. As a result of that there will be greater accountability in those areas. The changes will help to increase the speed and reduce the regulatory costs of dealing with firms and individuals that fail to meet the FCA standards.
‘As part of our transformation we will continue to take a fresh approach to tackle firms and individuals who do not meet the required standards. As part of this, we aim to become a forward looking, proactive regulator – one that is tough, assertive, confident, decisive and agile.’