FAQ's - how the Committee works

Applications to the FSA

When you applied to be authorised, our Regulatory Transactions Division (RTD) assessed your application, asking for more information, which it then presented to our Regulatory Transaction Committee (RTC). This committee of senior FSA staff decided to refuse your authorisation based on this information. We sent you the information that the RTC considered.

You have the right to tell the FSA why it shouldn't do what it has proposed in the warning notice, this will be your representations. It is the Regulatory Decisions Committee (RDC) that will consider what you have to say.

Enforcement actions

Before we decided to give you a warning notice, we would have carried out an enforcement investigation. Our Enforcement division would have, on the basis of this investigation, made a recommendation to the RDC to give you a warning notice.

More details about the enforcement process are available. 

Based on the material presented to it, either an RDC panel or the Chairman alone would have considered whether the action Enforcement recommended was the right thing to do in all the circumstances.  In most cases, the RDC sends you a copy of the material it considered in taking its decision.  If you didn’t get a copy (this will usually be for practical reasons, such as the size of the material) you are usually entitled to request access to it and we would have told you this in the letter you received with your warning notice.  There are some circumstances where you will not be entitled to access, but this is rare. 

It is important to note that the RDC, who decided to give you a warning notice, are separate from the Enforcement division, which conducted the investigation.  This is essential under the legislation (section 395(2) of FSMA) and helps to ensure that decisions to issue statutory notices are fair.  The RDC also has its own legal team and support staff.

FSMA requires us to issue supervisory notices to take some types of actions.  On the whole, a supervisory notice requires you do something or not to do something – for example removing regulated activities from your permission. 

Unlike a warning notice, a supervisory notice can take effect immediately.  If this is not the case, we’ll make the date it takes effect on clear in the notice itself. 

As with a warning notice you do have the right to respond to a supervisory notice.  You can refer it to the Tribunal straight away (with a warning notice you would need to wait until we have sent you a further notice).  You have 28 days in which to refer the supervisory notice to the Tribunal. 

If you refer a supervisory notice to the Tribunal it will still take effect unless you apply to the Tribunal to have it suspended until a final decision is reached by the Tribunal.

It is important that the procedure used to take action against firms and individuals is fair and effective.  FSMA imposes a disclosure obligation on us (in section 394 – which we describe in the notice).  However, this does not apply to every decision to give a notice, and it may not reveal how we reached our decision to give you a warning notice or a first supervisory notice

For you to be able to understand why we gave you a Notice and decide whether to take up the opportunity to make representations, we believe it is important to give you, straight away, the materials we considered when making the decision.

The papers will usually consist of the following (in addition to the notice itself, and the covering letter):

• an 'Enforcement Submissions Document';
• a draft warning or first supervisory notice and a formal list of documents (as required by section 394 FSMA);
• the investigation report (if there was one) and any response you sent to the preliminary investigation report;
• other correspondence and key materials relied on to support the recommendation made in the Enforcement Submissions Document; and
• a note of any additional submissions made to the decision maker (if any were made)

Your rights are described in general terms in the notice you received.  This description is in the section headed 'Important'.

If you were given a warning notice, you have the right to make representations to the FSA.  This is your opportunity to explain your side of the matter before we make up our mind to take action.  You may make representations in writing or in person (oral representations).  The notice will give you a specific deadline for making written representations, and a deadline for telling us you wish to make representations in person.

You can ask us for help in understanding the rights we refer to in the notice and for further information about the procedure.  However, our staff cannot give you any advice about what you should do.  The names of the relevant FSA contacts are set out in the notice and covering letter which you received.

You may wish to obtain legal or other professional advice (for example from a compliance consultant) about your situation.

Yes.  We will always consider representations made in response to a warning notice.  Of course, these may not change our mind, but in previous cases we have revised our view of a matter as a result of representations. 

It is particularly important for you to tell us if you are unable to meet a proposed penalty.  We are likely to have little, if any, up-to-date information about your finances, and will rely on you to give us this information. 

If you do not respond at all to a warning notice, we are entitled to assume that the facts and matters relied on for giving that notice are accurate.  Accordingly we will nearly always give you a decision notice based on the same facts and matters.  This does not affect your right to take the matter to the Tribunal (see below).

If you received a first supervisory notice you have a choice of responding to us or taking the matter directly to the Tribunal (see below).  If you do neither, that will be the end of the process – the action set out in the supervisory notice will already have taken effect and you will not have any right to argue against it.  However, you may have an opportunity to apply to reverse its effects if your situation changes.

You can make representations to the RDC in response to a warning notice or supervisory notice – by writing or in person.  You can make both written and oral representations. 

Written representations:

If you wish to make written representations you will normally have 35 days from the date of the notice in which to do this. 

Your representations should be in response to the notice and set out your points clearly.  You should send you written representations to the case handler who is dealing with your case.  These details will be set out in both the warning/supervisory notice and also in the covering letter that was sent with the notice. 

The written representations must reach us by the deadline to ensure that your representations are considered.  If, after this, we have not received your representations, then we assume that the facts in the notice are correct and issue a decision notice (in the case of a warning notice) on the basis of those facts. 
 
Enforcement/RTD (Retail Transactions Division) will have an opportunity to provide a response to your representations and we will send you a copy of this.  The RDC will consider your representations.   

Oral representations

If you wish to make oral representations instead of – or in addition to – written representations you will need to let your case handler know by the date indicated in the warning/supervisory notice and the covering letter.  This will be an earlier date than the deadline to make written representation so we can arrange for you to come and make your representations to the RDC.  It will normally be around two weeks from the date of the notice.

You will need to let us know who will be attending the oral representations meeting in advance.  You can bring representatives, and people often find it useful to do this; however, this is not a requirement and you do not have to bring anybody with you.  In fact, some of the most effective representations have been made by those individuals most closely concerned to the matter. 

If you have made written representations, the RDC Panel would have read them, as well as Enforcement's/RTD's response to these.  So there is no need to read your written representations out.  Enforcement will be given an opportunity during the oral representations meeting to respond to any points that you make.      

If you need more time to make written representations you should contact the case handler dealing with your case as soon as possible but certainly before the deadline expires.  You will need to explain why you need more time and how much more time you need. 

The RDC Chairman will decide whether to extend your deadline to make written representations.  It is important that he understands why an extension is needed and how long you need.  You are not guaranteed an extension but it may be possible – depending on many factors, including how long you need and why you need longer to prepare your representations. 

You should note that in order to keep the process on track and avoid lengthy delays in resolving the matter, we are unlikely to grant very long extensions. 

You do not have to attend a representations meeting in person – you may be represented. 

However, in our experience it is very helpful to the decision-making process if those directly involved in the relevant facts attend.  Indeed some of the most effective representations have been made by the individuals most closely concerned – either personally, as the proprietor of the firm, or as a senior manager.

Legal or other professional representation can help you to cover all of the points that you want to make, to help you structure what you want to say, and can help you to answer any questions that are posed. 

In most circumstances you will not be able to change your mind and make representations once the deadline has expired.

No.  You still have the opportunity to refer the notice to the Tribunal even if you have not made representations to the RDC.  However, you must do this within 28 days of the date on the notice.

If you do not make your written representations by the deadline you risk receiving a decision notice on the same basis as the warning notice.  We are entitled to issue a default decision notice if representations are not received. 

No.  Even if you receive a default decision notice you still have the opportunity to refer the notice to the Tribunal.  However, you must do this within 28 days of the date on the notice.

The RDC will consider your representations and Enforcement's/Retail Transactions Division’s response to these.  It will consider whether it is right in all the circumstances to continue with the proposed action. 

The RDC, who took the decision to give you a warning notice, are independent from Enforcement, who conduct the investigation.  This is essential under section 395(2) of FSMA and helps to ensure that decisions to issue statutory notices are fair.  Once a warning or first supervisory notice has been issued the RDC will not meet with or discuss a case with Enforcement/Retails Transactions Division (RTD) while it is still ongoing without you being present or being given an opportunity to respond. 

The RDC has its own legal advisers, which ensures that they are not being advised on the law by those recommending the action.

To ensure that the Panel can hear representations impartially, it is normal practice for two members of the RDC Panel who were not involved in issuing the warning notice or supervisory notice to be present. 

At all stages you are given access to the material that the RDC considered in making its decision.  You will also be given access to those substantive communications between the RDC and Enforcement/RTD.     

All of this helps to ensure that all decisions are taken fairly. 

What is a representations meeting?

The representations meeting involves the RDC.  It meets as a panel of the committee – usually the Chairman, or a deputy, plus four others.  If your warning notice was given as a result of a decision by the Chairman or a deputy alone, the panel will usually comprise the Chairman (or a deputy) plus two others.  There will be at least two RDC members present who were not concerned with the decision to give you the warning notice.

The meeting is your opportunity to explain personally to us your arguments why we should not take the proposed action.  The focus of this meeting is very much on what you want to say.

Who will be there?

Present at the oral representations meeting will be:

• you and your representatives;
• the Enforcement or Retail Transactions Division team;
• the RDC Panel (this is usually five in an enforcement case and three in an authorisations case or a case decided by Chairman alone at warning notice stage);
• the RDC's legal advisers; and
• the case handler.

Sometimes there may be observers or additional support staff for the RDC.

Who will be there?

The agenda will set out the structure of the meeting.  This will allow time for you to make your representations and for the Enforcement/RTD team to respond to them. 

How long will I have to speak for?

You should use the time that you need in order to explain to the RDC why the FSA should not take the action proposed in the Warning or First Supervisory Notice.  Ordinarily representations should not last longer than one hour, after which Enforcement/Authorisations will be given an opportunity to respond. 

If you think that you will need more than an hour, let the RDC case handler know in advance.  It is at the Chairman's discretion that you can talk for longer so it will be important to set out why you need the extra time. 

Will I be cross-examined?

No, the RDC is not a court and there is no cross examination in the RDC.  The RDC Panel may ask you questions and Enforcement will have the opportunity to respond to the points that you make but you will not be cross examined. 

Can I call witnesses and cross-examine the FSA staff?

You are able to bring someone with you who is able to support your representations if you think that this will be beneficial. However, the RDC is not a court or tribunal, so you are cannot call witnesses or cross-examine FSA staff.

What if someone asks a question I can’t answer there and then?

If you are unable to answer a question you should say so.  You can ask the Chairman if you can respond in writing after the representations meeting.  If the Chairman permits this you will be given a deadline for this. 

We appreciate that sometimes you will need to check some information in order to answer a question.  However, you will only be permitted to do this where the Chairman feels that it is necessary and appropriate. 

After the meeting the RDC Panel will consider your representations and decide whether to continue with the action proposed in the warning/supervisory notice. 

If the RDC Panel decides that in all the circumstances it is right to continue with the action, we will issue a decision or second supervisory notice.  This notice will set out the action the FSA has decided to take and will explain why it has made that decision.

If the RDC decides not to issue a decision or second supervisory notice, we will tell you in writing.  If you were applying for authorisation this would result in your authorisation being granted. 

You can accept the decision notice or you are able to refer the matter to the Tribunal.  You have 28 days in which to make a referral to the Tribunal; there are details of how to do this in the decision notice. 

Generally speaking you will not be entitled to any compensation or costs if we decide not to proceed with action against you.  The process before a matter is taken to the Tribunal is simply between you and the FSA – an administrative decision-making process. 

FSMA provides you with some protection against unreasonable or malicious proposals for action by requiring us to ensure there is effective separation between those investigating a matter and those deciding whether action should be taken.  The process required by FSMA, also provides you with an opportunity to persuade us that our initial view of a case is incorrect.  If you succeed in doing so, that will be the end of the matter.

However, if you believe that you may have a complaint, you should refer to the COAF module in the FSA’s Handbook (Complaints against the FSA).

In certain circumstances, we must give a copy of a notice to someone other than the person it is issued to.  This is when they are identified in the notice and, in our opinion, it is prejudicial to them.  However they do not need to be given a copy of the notice if they have been given a separate notice on the matter themselves.  This is a third party.

A third party does not need to be identified by name.  The notice will state if there are any third parties.