Variation of Permissions gains sharper edge

Wording in the Enforcement Guide (EG 8.2-8.5) is set to be tightened to indicate that the FSA may apply Own Initiative Variation of Permissions (OIVoPs), whether as a supervisory or enforcement tool, even if a firm has already confirmed that it will take corrective measures. The aim, stated in CP08/10, is to ensure a quick response to safeguard consumers’ interests. In most cases, there will be no need for an OIVoP, says the regulator and it notes that a statutory notice may on occasion prove helpful to a firm, which would else find it difficult to act due to legal duties owed to third parties. The revised approach would apply to both ‘fundamental’ and ‘non-fundamental’ OIVoPs, issued by the Regulatory Decisions Committee (RDC) and FSA staff under executive procedures, respectively. A fundamental OIVoP might stop a firm from engaging in a specified activity or prevent it from taking on new business while a non-fundamental OIVoP could, for example, require a firm to advise customers of risks that it had not explained clearly enough before. Both types of OIVoP supervisory notice would be published unless the firm’s current customers would be disadvantaged under the proposals. Currently EG 6.11 says that non-fundamental OIVoP notices will not normally be publicised if confidential information concerning the subject firm would be revealed or consumers’ interests would be injured.