FCA has confirmed new rules that will make it easier for it to cancel permissions that firms are not using. Following a change in the law in the FS Act 2021 that allows it to streamline and shorten the process, FCA will now send two warnings to a firm if it believes the firm is not using some or all of its permissions. If the firm does not take appropriate action, FCA can then cancel or amend the permission 28 days after the first warning – rather than waiting the 12 months which was previously necessary.
FCA says the change is needed to reduce the risk of consumers misunderstanding or being misled as to the protections they have.
The power supports the “use it of lose it” initiative, which FCA is increasingly using. In the past year it has carried out over 1,000 assessments which has let to 264 firms applying to cancel their authorisation, and 47 more to modify their permissions.
FCA still encourages firms to take the initiative in asking for a variation or cancellation of permission where appropriate.