RPP 9 RPP 9 Waivers and Modifications
RPP 9-1 RPP 9-1 Introduction
This chapter outlines the DFSA's approach to considering and determining applications to grant relief from legislation, by either waiving or modifying the application of one or more Rules of the DFSA Rulebook or Articles of the Markets Law 2012.
To waive the application of a provision is to give relief to a person from the entire obligation in that provision. A modification can either modify the way in which a person can comply with an obligation in a provision or can give relief from part of the obligation in a provision.
RPP 9-2 RPP 9-2 DFSA's Power to Issue Relief
DFSAmay, on the application or with the consent of a person, direct that its Rules:(a) do not apply to a person; or(b) do apply to a person but with such modifications as are set out in a notice issued by the DFSAfor this purpose.2
2 Article 25 of the Regulatory Law 2004.
Usually such a person is an
Authorised Person, but this may not necessarily be the case. For example, in the case of an Offerof Securitiesthe Issuermay apply for relief from the MKT Rules.
DFSA, in addition to waiving or modifying Rules, has the power to waive or modify Articles of the Markets Law 20123. This power would typically only be exercised where practicality conflicts with a provision of the law and the associated risks are adequately addressed by alternative arrangements put in place by the applicant.
3 Article 9 of the Markets Law 2012.
If an application is successful, the
DFSAwill issue its decision by means of a notice in writing.
RPP 9-3 RPP 9-3 Making an Application
When applying for relief from a Rule or a provision of the Markets Law 2012 please use the GEN1 form in the AFN Sourcebook.
Currently not in use
Prior to submitting an application to the
DFSA, the applicant should contact their usual DFSAsupervisory contact to discuss the application. For Authorised Firmssubject to thematic supervision, the dedicated contact portal should be used:
If the applicant is not regulated by the
DFSA, contact should be made through the general enquiries form on the DFSA website here.
Before making an application, the
DFSAexpects that the applicant will carry out appropriate research on:(a) the intention behind the provisions in question and the regulatory outcomes that the provisions aim to achieve;(b) whether there are any precedents where the DFSA has previously granted relief, or not granted relief, from the provisions in question; and(c) if so, any similarities and differences between the cases where relief has previously been granted and the applicant's case.
In the application, the applicant will need to:(a) set out the reasons for requesting the granting of a waiver or a modification;(b) explain the impact of the application of the provisions as it stands on the applicant;(c) attach any precedent relief supporting the application which may have been issued;(d) identify any risks associated with the relief being sought and how the applicant plans to mitigate such risks; and(e) in the case of an application to modify a provision, propose wording for the modification.
The reasons stated by the applicant need to show a compelling case for the granting of the relief, as the
DFSAdoes not grant relief lightly. The determination of a waiver or modification is at the discretion of the DFSAand it will generally only grant relief where there is shown to be an appropriate and justifiable reason for doing so.
On occasion, the
DFSAmay believe that the relief being sought by an applicant may be relevant to, and should be applied to, a large number of persons. In these circumstances instead of requiring the relevant persons to apply for the relief, the DFSAwill publish the relief on the homepage of its website and invite the relevant persons to "consent" to the waiver or modification. This is simply done by notifying the DFSAthat they wish the notice to apply in relation to their activities.
RPP 9-4 RPP 9-4 Considering an Application
The legal standing of the RAWC's work is that the committee does not itself grant waivers or modifications. The committee's role is to consider applications and to make recommendations to the
Chief Executive, or his delegate, either to approve or to reject applications for proposed waivers and modifications.
The Chief Executive, or his delegate, may then in relation to waivers or modifications of Rules exercise his power under Article 36(e) of the Regulatory Law 2004 or, in relation to waivers or modifications of Articles of the Markets Law 2012, exercise his powers under Article 36(f) of the Regulatory Law 2004 and issue a notice.
In some cases the RAWC may determine that waivers or modifications should be standardised, that is, made available to any applicant meeting certain criteria. An example of standard relief given is a waiver of the prudential requirements in Chapters 4, 6 and 7 of the PIN Module that would otherwise apply to an
Insureroperating as a Branch. Where standard relief is given, the DFSAwill consider at the appropriate time whether the relevant Rule or Rules should be amended, so that standard relief need no longer be applied for.
DFSAmay impose conditions on the relief, for example, of additional reporting requirements, and a notice may be given for a specified period of time, after which time it will cease to apply.
DFSAdecides not to grant relief, it will give reasons for the decision. An applicant may withdraw its application for relief at any time up until the giving of the notice. In doing so, the applicant should give reasons for the withdrawing of the application.
DFSAwill acknowledge an application for relief and may request further information. The time taken by the DFSAto determine the application will depend upon the issues it raises.
It is unlikely that the DFSA will waive the following Rules:
However, modification of some of the above mentioned Rules may be possible.
When considering an application, the
DFSAattempts to weigh the net regulatory benefit or detriment which would flow from granting the sought relief on the conditions proposed. The DFSAwill generally grant relief where:(a) it considers that there is a net regulatory benefit; or(b) the regulatory detriment is minimal as the relief sought does not conflict with the policy intent of the Rule and the associated risks are adequately mitigated.
Relief will be given to overcome the disproportionate effects of provisions in exceptional cases, the anomalous effects of old provisions in novel cases for which they were not designed, and the unintended side effects of provisions.
For example, it may simply be the case that an applicant, such as an
Authorised Firm, needs more time in which to implement certain procedures or to carry out specified tasks. This commonly arises when new Rules are introduced requiring, for example, Authorised Firmsto introduce new procedures or to carry out due diligence on financial products.
All applications for waivers and modifications are handled by the Rules and Waivers Committee (RAWC). The objective of the RAWC is to consider and determine applications to waive or modify Rules and provisions of the Markets Law 2012.
RPP 9-5 RPP 9-5 Publication of Waivers and Modifications
DFSAis required to publish all notices concerning waivers and modifications unless it is satisfied that it is inappropriate or unnecessary to do so4.
4 Article 25(4) of the Regulatory Law 2004.
DFSAwill publish a notice in such a way as it considers appropriate for bringing the notice to the attention of:(a) those likely to be affected by it; and(b) others who may be likely to become subject to a similar notice.
The principal method of publication of waivers and modifications is by publication on the
DFSAwebsite here. The fundamental principle behind publication is transparency. This allows any person dealing with the applicant, for example, its clients and competitors, to know to what extent the relevant legislation applies to the applicant.
If an applicant believes that it is inappropriate or unnecessary for the
DFSAto publish the relief, or to publish it after a delay, or without disclosing the identity of the applicant, it should make this clear in its application.
RPP 9-6 RPP 9-6 Withdrawal or Variation of Waivers And Modifications
Under Article 25(5) of the Regulatory Law 2004, the
DFSAmay:(a) on its own initiative, or on the application of the person to whom it applies, withdraw a written notice of relief; or(b) on the application of, or with the consent of, the person to whom it applies, vary a written notice of relief.
RPP 9-7 RPP 9-7 Enforcement of Waivers And Modifications
If a notice of relief directs that a provision is to apply to the applicant with modifications, then a contravention of the modified provision could lead to the
DFSAtaking enforcement action.
If relief is given subject to a condition, the relief will not apply to activities conducted in breach of the condition and those activities, if in breach of the original provision, could lead to enforcement action.
RPP 9-8 RPP 9-8 Expiry And Extension of Current Waivers and Modifications
Where relief has been granted for a limited period of time (see paragraph 9-4-9) it is the responsibility of the person, to whom the notice applies, to monitor any expiry date.
There is no automatic renewal process for any relief granted by the
DFSAfor a limited period of time.
It is the responsibility of the person, to whom the notice applies, to notify the
DFSAat least two weeks in advance of a notice expiry of their intention to apply for an extension of the relief or explain how they intend to comply with the original provision.
Notification should be made through the same contact point as described in 9-3-3 and 9-3-4, namely either your usual DFSA supervisory contact, the dedicated contact portal or the general enquiries form on the DFSA website.
DFSAwill consider every application for extension of relief in the same manner as an initial application and will not necessarily grant extensions as a matter of course.