FCA publishes Policy Statement:New cancellation & variation power
FCA publishes Policy Statement PS22/5: New cancellation and variation power – Changes to the Handbook and Enforcement Guide
In January 2021 the FCA announced what it referred to as its ‘use it or lose it’ campaign, reminding firms of their obligation to regularly review regulatory permissions to ensure they are up to date and removed where they are not needed. Following a Consultation Paper (CP21/28), which it announced on 9th September 2021, the FCA has now published its Policy Statement PS22/5, ‘New cancellation and variation power: Changes to the Handbook and Enforcement Guide’. The FCA press release sets out its intention to strengthen consumer protection by speeding up removal of firms that do not use their regulatory permissions. In its web page explaining the Policy Statement, the FCA sets out what it is changing, who the changes apply to and what firms should do next.
The FCA is changing its Handbook and Enforcement Guide to give guidance on new power to cancel or vary the statutory Part IV A permissions of many FCA-authorised firms to carry on FCA-regulated activities.
This new power is available following a change in the law allowing the FCA to streamline and shorten the removals process.
Firms may in some circumstances be required to prove that they are carrying out the regulated activities they are permitted to, or face losing this permission.
Where a firm fails to pay its regulatory fees, submit returns, or complete annual declarations, the FCA may view these as indicators of a lack of regulated activity which may lead to permission being removed through use of this new power.
Failure to take action following two warnings will lead to cancellation of regulatory permission 28 days after the first warning
If you are an FCA-authorised firm that is not or no longer carrying on any FCA-regulated activity, or no longer carrying on particular regulated activities within the scope of your permissions the FCA asks that you consider cancelling your permission or asking the FCA to remove permissions to carry out those activities. See how to cancel an authorisation or apply for a variation of permission, or contact us for assistance.