Firms can apply for waivers and modifications to vary Handbook rules and alter their compliance obligations.
Waivers and modifications are variations to Handbook rules. A waiver means you do not have to comply with a rule. A modification allows you to comply with a rule amended to fit your circumstances.
Ordinarily, we individually assess all applications to waive or modify Handbook rules.
In exceptional circumstances, we take the decision to make a modification available to a selection of firms − these are known as modifications by consent.
Power to grant waivers
We have the power to grant waivers and modifications under section 138A of the Financial Services and Markets Act 2000 (FSMA).
We also have the power to exercise the national discretions under the Capital Requirements Regulation (referred to as CRR Permission).
The Prudential Regulation Authority (PRA) also grants waivers and modifications under FSMA. Check the PRA Handbook and our Handbook if you are unclear about which authority to apply to for your waiver or modification.
As of 1 January 2022 a new prudential regime for UK investment firms authorised under MIFID (the Investment Firm Prudential Regime (IFPR)) has come into force.
- the majority of existing waivers and modifications to prudential rules in the FCA Handbook no longer apply
- the majority of existing CRR permissions no longer apply to FCA investment firms
- the new rules contain transitional provisions that give some existing waivers and permissions status under the new regime − firms should consider the transitional provisions in the IFPR rules for more details
- firms will need to consider applying for permissions, or rule waivers and modifications, of rules in the new sourcebook (MIFIDPRU)
Find out more about IFPR.
Renewals or extensions
If you wish to renew or extend an existing waiver you will need to submit a new application, detailing again how your request meets the statutory test.
Please submit your application through our Connect portal and allow time for us to review your request.
Applications are not automatically granted. Each application is assessed on its merits. Following our guidelines and suggestions will make sure you present the best possible case. But remember that not all rules can be waived or modified.
If we decide to grant your application, we may attach conditions or requirements, such as extra reporting.
A waiver or modification will not apply retrospectively.
Publishing waivers, modifications and CRR permissions
The majority of waivers, modifications and CRR Permissions granted are published in full. Certain waivers, modifications and CRR Permission are published in abridged form, generally to protect the commercial interests of the firm concerned. A small number of waivers, modifications and CRR remain unpublished.
A firm may make representations to us if it objects to the publication of a waiver, modification or CRR Permission. If we decide to publish a waiver, modification or CRR Permission against the wishes of a firm, we will give the firm an opportunity to withdraw the application before the waiver, modification or CRR Permission is granted.
Subsequently, the decision to withhold a waiver, modification, CRR Permission or the identity of a firm from publication will usually only last for the duration of the relevant grounds for non-publication. If we decide to publish a waiver, modification or CRR Permission which has previously been withheld, we will first give the firm an opportunity to make representations.
We will update the Financial Services Register with the firm's Direction or Permission detailing the waiver, modification or CRR Permission. Please note that this won’t happen in all cases i.e. the modification by consent which is available to solo regulated firms using temporary arrangements and the list of firms that have been granted it does not appear on the register but is available on the modification by consent page.
We may offer a general waiver or modification to firms.
These are offered where an unmodified rule would not meet the circumstances of a particular category of firm. If a particular waiver is relevant to other firms, this will be publicised. For more information, please our modification by consent webpage.