On 19 May 2022, the FCA published Policy Statement 22/5 ‘New cancellation and variation power: Changes to the Handbook and Enforcement Guide’ (PS22/5).
The Financial Services Act 2021 inserted a new Schedule 6A into the Financial Services and Markets Act 2000 (FSMA). This schedule sets out a new power allowing the FCA to more quickly and efficiently:
- Vary or cancel the statutory permissions to conduct FCA-regulated activities of firms it has authorised under Part 4A of the FSMA, as well as the permissions of firms deemed to be so authorised, where those firms (i) appear to the FCA to be carrying on no FCA-regulated activities for which they have permission, and (ii) have not responded as the FCA has directed to its notices warning of the risk of such action.
- Reflect such variations and cancellations on the FCA register.
On 9 September 2021, the FCA published Consultation Paper 21/28 ‘New cancellation and variation power: Changes to the Handbook and Enforcement Guide’ (CP21/28) in which it set out proposed changes to the Handbook and Enforcement Guide (EG) in light of its new powers under Schedule 6A of the FSMA. The consultation closed on 29 October 2021. In PS22/5 the FCA sets out its comments on the feedback received to CP21/28 and the final changes to the Handbook and EG.
In PS22/5 the FCA reports that it has made a minor change to the amendments to the Handbook and EG as consulted on in CP21/28. Specifically, it has slightly amended SUP 7.2.2DG to make clearer that the FCA will consider all relevant facts and circumstances when deciding whether to use the new power. The FCA has also made some non-substantive conforming and grammatical changes to the Handbook and EG text as consulted on.
The FCA will start using the new power to cancel or vary the permissions of FCA authorized firms.