The decision to authorise a firm or individual is not a one-off. Firms and individuals may request changes to activities they are permitted to do. Our response to these requests should create public value by preventing harm. This section shows how quickly we have considered and responded to notifications and requests to vary permissions.
We remain committed to improving our performance against standards for regulating existing businesses. In some areas we have needed additional time to scrutinise requests to ensure firms and individuals meet high standards we expect of them. Where we have experienced a higher-than-normal number of requests, we have recruited additional resources to help us respond within the required timeframes. We continue to focus on improving our processes.
We must be informed in writing of any proposed changes to:
- a trust
- its trustee
- its manager (under s. 251 of FSMA)
We need to be satisfied that any changes will not adversely affect a trust’s compliance with our requirements.
Alterations to a collective investment scheme (CIS)
We must be informed in writing of certain proposed changes to the features of an authorised OEIC under regulation 21 of the Open-Ended Investment Companies Regulations 2001. We need to be satisfied that the changes will not adversely affect the OEIC’s compliance with regulatory requirements.
We must also be informed in writing of any proposed changes to the features of an authorised unit trust (AUT) or authorised contractual scheme (ACS) under sections 251 and 261Q of FSMA respectively. As for OEICs, we need to be satisfied that following any such changes the scheme will continue to comply with regulatory requirements. Overseas collective investment schemes may be recognised as individual schemes if the individual schemes satisfy the conditions set out in section 272 of FSMA. Operators of individually recognised overseas schemes must inform us in writing of any proposed changes to an individually recognised overseas scheme (under s. 277 of FSMA).
Our standard practice is to acknowledge and give written approval wherever feasible. If we do not, then the proposal (under s. 251 and 261Q and 277 of FSMA and regulation 21 of the OEIC regulations) gets automatic approval 1 month from the date we received notice.
We have a statutory requirement to consider notice of proposed alterations to a CIS, and if appropriate, issue a warning notice (the issuance of a warning notice does not apply to applications under s.277 of FSMA).
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Graph R2.1 shows we have achieved the 100% target for the last 3 years.
Variation of permission
Firms may change the nature of their business and apply to add, vary, or remove any regulated activities, investment or customer types. They may also apply to add or vary a requirement or limitation to, or remove a requirement or limitation from, the scope of their Part 4A permission.
We have a statutory requirement to process a complete application from an authorised firm for a variation of permission within 6 months (s55V(1) of FSMA) or 12 months of receiving an incomplete application (s55V(2) of FSMA).
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Graph R5.1 shows that we met the standard in 99% of cases in 2023/24.
Cancellation of Part 4A permission
An authorised person with permission to carry on regulated activities (Part 4A permission) can apply to us to cancel their permission. Changes to individual regulated activities involve a variation of permission, whereas the cancellation of all permissions means that the firm would no longer be permitted to carry on any FSMA-regulated activities in the UK.
We can refuse an application for cancellation if it may cause harm to consumers or potential consumers. For example, if a firm has outstanding customer complaints.
We have a statutory requirement to determine a complete application for cancellation of Part 4A permission within 6 months (s55V (1) of FSMA) or 12 months of receipt of an incomplete application (s55V(2) of FSMA).
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Graph R8.1 shows we achieved this in 99% of cases in 2023/24.
Notification of a proposed change in control
Controllers and firms must notify us before acquiring or increasing control (in line with part 12 of FSMA). A ‘controller’ refers broadly to a person who holds shares in or is entitled to exercise or control the exercise of voting power or significant influence in a UK-authorised firm or a parent of a UK-authorised firm. The legislation allows us to object to the acquisition of, or increase in control, or to approve with conditions. More information on control thresholds or bands[1] and change in control requirements[2].
We have a statutory requirement to make a decision after receiving a ‘complete’ notification of a proposed change in control. Our target is to do this within 60 working days of acknowledgement of receipt (s189(1) of FSMA).
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We received 1,289 pre-notifications this year and 5 missed the target, resulting in 99.6% of decisions being made within 60 working days. This small number of cases missed the target because they were mis-triaged and their statutory deadlines were not identified in a timely way.