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.
- Executive summary
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
- Summary of responses - Enforcement changes
Proposal 8: Minor updates to reflect minor changes to processes in the policy
Updated paragraph 3.6
All applicants are required to supply the Commission with sufficient and complete information to support their application, and in particular information that will enable an assessment of their suitability to be made. However, the Commission takes a risk based and proportionate approach to the amount and detail of information an applicant is required to provide. Guidance on the type of information required is included on our website and online application services.
Updated paragraph 3.14
On considering an application for a licence the Commission is required to: grant it; refuse it; or grant it in respect of one or more of the specified activities and refuse it in respect of the others. In some circumstances the Commission may attach specific conditions to the licence, which may, for example, have the effect of restricting the activities that may be carried out in reliance on the licence.
Updated paragraph 3.20
The Commission requires individuals to provide identification information, as recommended by the Disclosure and Barring Service (DBS), which is checked in accordance with their advice. The Commission will seek to follow up and resolve any inconsistencies, such as an indication on the DBS record that states aliases have been used by an applicant.
Updated paragraph 3.23
The Commission requires a full description of the company structure and would satisfy ourselves that other companies in the structure are either listed companies or that we knew of nothing untoward about them. We might carry out checks with overseas regulators in respect of overseas companies.
Updated paragraph 3.45
If the applicant is successful then a licence will be issued either by email. For operating and personal licences relevant details of the licence will be published in the public register on the Commission’s website.
- Q12. Do you agree with the proposed changes to the Policy to reflect our service?
The majority of respondents agreed with the proposal and noted:
- not only the company structure of the licence applicant should be disclosed, but a full structure of all affiliated entities under the same ownership or group (relates to Consolidated Financial Statements)
- important that the Commission contacts other regulators when an applicant or licensee operator in various jurisdictions
- online guidance for completing an application must be available as a complete document. The current format is unworkable. It cannot be printed or viewed as a single document. Many of the details come from different people in an organisation and a single document to be one capable of circulation (and printing off) is essential
- Paragraph 3.6 in the Policy does not appear to include information that ‘licence applications must be made through the online application services rather than on manual application forms'. Perhaps this should be included if that is the position of the Commission. Although what would happen should there be a technical issue with the online services?
- it would also be preferable that the Commission further defines ‘company structure’ and gives further details about whether this means within the licensed entity group or the full group structure of Ultimate Beneficial Owners (UBOs) and why this information is needed
- the Commission’s expectations on revenue from other jurisdictions should be made clearer.
Respondents also made the following comments:
- why does the Commission not insist on a photograph to accompany an application as part of their due diligence?
- if the risk-based approach has a minimal entry standard that properly ensures identification and verification, the policy should suffice.
It is clear from some of the comments that providing the online application service ‘help and guidance’ in one document available for download would be of great value to applicant and licensees. This improvement will be explored in the new financial year, as part of continuous improvement, and taken forward as soon as practicably possible.
The Commission has deliberately excluded mention of it being mandatory for all applications to be made online as certain types of application cannot currently be made in this way; the Commission continues to accept these specific applications by email. Again, as part of continually updating and improving our services, we are working towards all applications being submitted online only.
It should be noted that the Commission checks associated companies within the same group structure or under common ownership already as part of the application process. In respect of further defining company structure, we do not intend to do this because this is a policy statement and company structures can vary enormously.
In respect of concerns about identity requirements, the Commission no longer requires photographs from personal licence applicants because we have a robust online identity verification process in place.
Proposal 7: Addition of new examples to update the Commission about
Last updated: 22 June 2022
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