Consultation response
Licensing, Compliance and Enforcement Policy: Consultation Response
This response sets out our position in relation to the consultation around proposed changes to our Licensing, Compliance and Enforcement Policy.
Contents
- Executive summary
- Introduction
- Summary of responses - Licensing changes
- - Proposal 1: Policy position in relation to dual regulation products
- - Proposal 2: Changes to complete applications
- - Proposal 3: Clarification of relevant persons
- - Proposal 4: Timescale for using licence
- - Proposal 5: Clarification of suitability criteria
- - Proposal 6: Clarification of financing arrangements
- - Proposal 7: Addition of new examples to update the Commission about
- - Proposal 8: Minor updates to reflect minor changes to processes in the policy
- Summary of responses - Compliance changes
- - Proposal 9: Remote assessments
- - Proposal 10: Assessment framework
- - Proposal 11: Special Measures
- Summary of responses - Enforcement changes
Proposal 12: Commencing a review of an individual licence
Proposal
Updated paragraph 5.10
The process of review may itself reveal facts or matters requiring investigation. Accordingly, the Commission will take a flexible approach to the procedure to ensure that all relevant facts and matters are investigated, and that the licensee has a full opportunity to make representations in relation to the review.
Updated paragraph 5.20
While in most cases, the Licensee’s representations will enable the Commission to proceed to a determination, in some cases the Licensee’s representations may raise further questions for the Commission. This may be because the licensee has not adequately replied to the preliminary findings letter or because its representations raise further questions requiring investigation. This may lead to further investigations by the Commission, as set out at paragraph 5.10 above, which may result in a further consolidated preliminary findings letter. In such a case, the Commission will afford the Licensee the opportunity to make further representations before moving to consider its determination.
Consultation question
- Q16. To what extent do you agree with the proposed amendment to paragraphs 5.10 and to 5.19?
Respondents’ views
The majority of respondents supported the proposed changes. Respondents commented as follows:
- whether the proposed amendments were necessary as the Commission should already be able to compel sufficient information and can void or withhold a licence if it needs to
- the potential for ambiguity of the interpretation of ‘flexible approach’ and the need to ensure procedural fairness
- getting the balance right between sufficient investigation, obtaining and properly considering representations whilst ensuring overall process is fair, transparent and managed within a reasonable timeframe
- not permitting the revised approach to unduly benefit the Commission at the expense of licensees and ensuring conclusions are fully explained.
Respondents also indicated that the Commission was perceived to be more than fair in its regulatory approach.
Our position
We consider it important that our processes are transparent and available to licensees and their advisers. There are many occasions when engagement is not withheld to the point of obstruction but is not as effective as it could be. In these instances, clarifying the process and the opportunity for representations is important to manage the process and relationship.
Similarly, whilst every effort will be made to issue only one set of preliminary findings, where required we must have the flexibility to ensure fair weight is given to the available information.
It is not envisaged that this amendment would be utilised solely for the benefit of the Commission and officials will continue to expect licensees to engage comprehensively at the earliest opportunity. It is anticipated this would be used exceptionally, rather than routinely.
The Commission will make available to licensees under review projected timescales for case progression at the outset of an investigation and these will be monitored on an ongoing basis as applicable to the facts of each individual case. The Commission already provides detailed rationale in its decision letters and notices and will ensure this continues to apply.
The Commission intends to continue with its proposals to amend paragraphs 5.10 and 5.19 of the Policy.
Proposal 13: Financial penalties
Last updated: 22 June 2022
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