The Regulatory Decisions Committee (RDC) takes certain decisions on behalf of the FCA. These decisions relate to enforcement and supervisory actions, as well as applications by firms for authorisation and by individuals for approval.
When the RDC makes decisions, they are set out in a formal document known as a ‘statutory notice’. This page explains more about the RDC and what to do if you receive a statutory notice from the RDC. You can read the formal procedures relating to the RDC in the Decision Procedure and Penalties Manual (DEPP) in the FCA Handbook. Statutory notices also contain information on the procedural and regulatory provisions relevant to the action proposed or taken in them.
The RDC process is administrative, not judicial. It is not an appeal body but is the final stage of decision-making within the FCA.
The RDC is a Committee of the FCA Board that operates separately from the rest of the FCA. The FCA Board appoints the RDC Chair, one or more Deputy Chairs and the other members of the Committee, who are drawn from business, consumer and financial services backgrounds. The RDC Chair is an FCA employee.
Making fair decisions
The separation of the RDC ensures that decisions are not made by FCA staff who are recommending action against a firm or individual. The RDC also has its own team of support staff and legal advisers.
Generally, RDC cases are considered by a panel of 3 members, including the Chair or a Deputy Chair, but if the decision is considered to be straightforward or is urgent the RDC Chair or a Deputy can decide alone whether to issue a statutory notice.
Once a statutory notice has been issued, the RDC will not discuss a case with the FCA staff who are recommending the action while the case is ongoing, unless a representative for the individual/firm is present or given an opportunity to respond.
The firm/individual will usually be given access to all of the materials that the RDC panel considers before making a decision. There are some circumstances where you will not be entitled to see these, but this is rare.
The RDC will always consider any written or oral representations that you may wish to make on the action proposed or (in the case of a first supervisory notice) taken. The representations may not change the decision, but in many cases the RDC panel has altered a decision as a result of representations and, in some cases, has decided to take no further action.
All of this helps to ensure that decisions are made fairly.
Decisions the RDC makes
The FCA is required to give statutory notices under the Financial Services and Markets Act (FSMA) when it takes certain actions or makes certain decisions. The statutory notices given by the RDC are usually warning notices, decision notices or supervisory notices.
The FCA must issue a ‘warning notice’ where it proposes to take certain action.
The RDC is the FCA’s decision-maker for various types of warning notice, including those proposing to:
- Cancel permissions and registrations;
- Issue a prohibition to prevent an individual from carrying on particular activities in relation to regulated business, or from carrying on any such role;
- Issue a financial penalty or public censure against a firm or individual;
- Issue a suspension or restriction against a firm or individual preventing them from carrying out particular actions;
- Withdraw approval from an individual for particular functions.
The FCA must issue a ‘decision notice’ where, after considering the representations a firm or individual has made on a warning notice (or if none are made) it decides to take action.
The RDC is the FCA’s decision-maker for various types of decision notice, including those deciding to take the types of action set out above in relation to ‘warning notices’ and additionally to refuse to authorise a firm or approve an individual, where that refusal is opposed by the firm or individual. In these additional cases, the warning notice will have been issued by the executive decision maker, and the RDC only becomes involved if representations are made by the firm or individual concerned.
The FCA must issue a ‘first supervisory notice’ if it decides that action should be taken to intervene in relation to a firm by imposing a variation of permission and/or requirement(s).The firm or individual may then make representations to the FCA. If the FCA decides, following representations, that a variation and/or requirement(s) should remain in place, it will issue a ‘second supervisory notice’.
The RDC is the FCA’s decision-maker for first and second supervisory notices in relation to variations of permission and ‘asset requirements’, which impose certain types of restriction on a firm’s ability to deal with its assets or consumers’ assets which it holds.
Notices relating to enforcement action
The RDC gives warning notices based on recommendations from the FCA Enforcement team which carries out investigations. Based on the material presented to it, the RDC considers whether the action recommended is the right action to take.
After you receive a warning notice you have the right to respond by making written and/or oral representations. If the RDC receives written representations from you, the Enforcement team will be given an opportunity to respond in writing. You may also make oral representations at a meeting with the RDC. The Enforcement team will also attend and will be allowed to respond. The RDC will then consider all the representations and decide whether it is right to continue with the proposed action, either issuing a decision notice or deciding that no decision notice should be given. If the RDC decides that no decision notice should be given, the relevant parties will be notified in writing.
Instead of making representations on a warning notice, you may notify the RDC that you wish to make an expedited reference to the Upper Tribunal and that you waive, and will not exercise, any rights under section 387(2) of FSMA (which include the right to make representations). The RDC will then issue a decision notice, subject to the interests of any third parties.
If you do not make representations on a warning notice and have not referred the matter to the Upper Tribunal under the expedited reference procedure, the RDC may regard the facts and matters set out in the warning notice as undisputed and issue a decision notice.
If you are given a decision notice, you can either accept the decision or take the matter to court by referring it to the Upper Tribunal.
Notices refusing an application
When you apply to be authorised, your application will be assessed and may be referred to the executive decision maker if the recommendation of the Authorisations team is to refuse the application. If the executive decision maker agrees with the recommendation to refuse your application it will give you a warning notice. You will also be provided with a copy of the material considered by the executive decision maker when it made its decision.
If you receive a warning notice, you have the right to make representations to the RDC and say why you think the FCA should not refuse your application. This can be by making written and/or oral representations. If the RDC receives written representations from you, the Authorisations team will be given an opportunity to respond in writing. You may also make oral representations at a meeting with the RDC. The Authorisations team will attend the meeting and will be allowed to respond. The RDC will consider all the representations and decide whether it is appropriate to continue with the refusal of your application. If it decides to refuse, it will issue a decision notice.
If after considering representations, the RDC decides that no decision notice should be given, all the relevant parties will be notified in writing of that decision.
If you do not make representations on a warning notice, the executive decision maker may regard the facts and matters set out in the warning notices as uncontested and issue a decision notice.
If you are given a decision notice you can either accept the decision or take the matter to Court by referring it to the Upper Tribunal.
The FCA must issue supervisory notices when it decides to take certain types of actions under FSMA. A supervisory notice requires a regulated firm to do something or not to do something – for example, it may remove regulated activities from your firm’s permissions, or impose requirements restricting the use of assets.
Unlike a warning notice or decision notice, the action set out in a supervisory notice can take effect immediately or on a date set out in the notice. The RDC will make clear in the notice the date it takes effect.
You have a minimum of 14 days to respond to a first supervisory notice. As the effect of a first supervisory notice can be immediate, if appropriate you can ask to make urgent representations to the RDC before the deadline expires.
You can also take a first supervisory notice to Court by referring it to the Upper Tribunal within 28 days of receiving it.
If you receive a second supervisory notice after making representations to the RDC, you can also refer that notice to the Upper Tribunal. The Upper Tribunal has the power to suspend the effect of a supervisory notice.
Documents you’ll receive with your warning, decision and/or supervisory notice
It is important that the procedure used to take action against firms and individuals is fair and effective. To help you understand why you were given a warning notice and decide whether to make representations, you will usually be given a copy of the materials which were considered and relied on by the executive decision maker or RDC when the decision was made. FSMA (section 394) says we must give you access to material which will, if relevant, be described in your notice. However, this does not apply to every decision to give a notice.
The material will usually include:
- the notice itself
- the recommendation papers from the relevant team at the FCA
- a draft of the notice which formed the basis of the team’s recommendation to the RDC or executive decision maker and a formal list of documents
- the preliminary or final investigation report (if there was one) and any response you sent to the report
- other correspondence and key materials relied on to support the recommendation
- a note of any additional substantive communications between the case team and the RDC
Getting help with a warning or supervisory notice
If the notice has been issued by the RDC, you can ask the Decision-Making Committees Secretariat (DMC Secretariat) for help in understanding the rights referred to in the notice and for further information about the procedure.
You may wish to take legal or other professional advice (for example from a compliance consultant) about your situation. The Financial Services Lawyers Association runs a scheme which may be able to provide you with free legal advice and help with responding to a warning notice or supervisory notice. This scheme is not run or endorsed by the FCA.
Responding to a warning notice and/or supervisory notice
Your rights are described in general terms in the notice you receive in the section labelled 'Procedural matters'.
If you decide to make representations to the RDC in writing or in person or both - this is an opportunity to explain your side of the matter. The notice will contain a deadline for making written representations and for telling the RDC if you wish to make representations in person.
You can also refer the notice direct to the Upper Tribunal. For warning notices issued by the RDC, this is via the expedited reference procedure mentioned above. For first supervisory notices, this can be as well as making representations to the RDC, which could lead to parallel proceedings before both the RDC and the Tribunal, particularly in urgent cases.
If you need more time to make written representations or to prepare to make oral representations you should contact the DMC Secretariat before the deadline in the notice expires. You will need to explain why you need more time and how much more time you need. The DMC Secretariat will ask our Enforcement or Authorisations teams to provide comments on your request. The RDC Chair (or a Deputy Chair) will decide whether to give you more time. The Chair is unlikely to grant long extensions, unless the circumstances are exceptional.
Your representations should respond to the facts and matters set out in the notice and set out your points clearly. They must be sent to the DMC Secretariat by the deadline. The FCA’s Enforcement or Authorisations teams will have an opportunity to respond to your written representations to the RDC. You will be sent a copy of their response. The RDC will consider your representations and any response made by the Enforcement or Authorisations teams when making its decision.
This is a meeting between the firm/individual and/or their representatives, the FCA Enforcement, Authorisations or Supervision team, and an RDC panel. The panel will normally comprise the Chair (or a Deputy Chair) plus 2 other members.
As well as those mentioned above, other people who may attend the meeting include:
- the RDC's legal advisers
- a case handler from the DMC Secretariat
- other FCA staff.
Before the meeting, you will be sent an agenda and information about the composition of the panel.
At the meeting, your representations should normally last about an hour. If you need more time, you should ask before the meeting, explaining why. The meeting is your opportunity to explain your arguments against the FCA taking or continuing the action set out in the notice. Legal or other professional representation can help you to cover the points that you want to make, structure what you want to say and answer any questions. You may also choose to bring someone, such as a friend, with you.
The RDC is not a court or a tribunal and there is no cross-examination. You cannot cross-examine FCA staff or call witnesses to give evidence. The RDC panel members may ask you questions. If you are unable to answer a question you should say so or, where appropriate, ask the Chair if you may respond in writing after the meeting. If the Chair permits this, you will be given a deadline to provide your written response.
At the end of the meeting, the Chair will explain the next steps.
Failing to respond to warning notices and/or supervisory notices
If you do not either make representations on a warning notice or invoke the expedited reference procedure referred to above, the RDC may assume that the facts and matters set out in the notice are correct, so it will nearly always give you a decision notice on that basis. This does not affect your right to take the matter to the Upper Tribunal. You must do this within 28 days of being given the decision notice.
If you receive a first supervisory notice and you do not make representations to the RDC or refer it directly to the Upper Tribunal, this will be the end of the process. The action set out in the notice may already have taken effect and you may not have any right to argue against it. However, you may have an opportunity to apply to the FCA to reverse its effects if your situation changes.
It is therefore important not to miss the deadline for making representations, if you wish to do so.
After the representations meeting
After the meeting, the RDC will consider your representations and decide what action to take. It will not normally make a decision on the day of the meeting and will let you know approximately when you may expect to hear the decision.
Any notice given will set out the action the FCA has decided to take and will explain why the RDC has made that decision.
If the RDC decides not to issue a decision notice or second supervisory notice in the case of enforcement and supervisory action, it will tell you in writing.
If you were applying for authorisation or approval and the RDC decides not to issue a decision notice, this will normally result in your authorisation or approval being granted.
Receiving a decision notice or second supervisory notice
You can accept the decision set out in the decision notice or second supervisory notice, or you have the right to refer the matter to the Upper Tribunal, normally within 28 days. The notice will set out how to do this.
If you do not refer a decision notice to the Upper Tribunal within the 28-day deadline you will be given a final notice. A copy of the final notice will usually be placed on the FCA website.
If you do not refer a second supervisory notice to the Upper Tribunal, that will be the end of the matter. The action set out in the second supervisory notice may already have taken effect and you will not have any right to argue against it. However, you can apply to the FCA to reverse its effects if your situation changes.
Costs and compensation
You will not usually be entitled to any compensation or costs if we decide not to proceed with action against you.
However, if you believe that you may have a complaint about the FCA and want further information about making a complaint, see the FCA complaints scheme.
In certain circumstances, we must give a copy of a statutory notice to someone other than the person it is issued to. This is when someone is identified in the notice and, in our opinion, it may be prejudicial to them. Such a person is known as a third party. The notice will normally state if there are any third parties.
Third parties may also make representations to the RDC and refer a decision notice to the Upper Tribunal.
Publication of notices
In certain circumstances, details of a warning notice can be made public. If the FCA intends to publish details of your warning notice, you will be provided with a copy of the proposed warning notice statement and given an opportunity to object and/or provide comments on its publication.
Once a supervisory notice has taken effect, it is usually published on the FCA website.
The FCA may publish such information about the matter to which a decision notice or final notice relates as it considers appropriate. If you refer a decision notice to the Upper Tribunal, the facts and matters in the notice may be made public before your reference to the tribunal is concluded. You can object to early publication in relation to the decision notice and you will be provided with details about how to do this when you are given the notice.
06/09/2019: Link changed Updated link to Financial Services Lawyers Association