What is a waiver or modification?
A 'waiver' from a rule means that the applicant does not have to comply with that rule. A 'modification' to a rule enables the applicant to comply with an amended rule that better fits their own circumstances.
We can grant a waiver or modification on application or with the consent of a person who is subject to the rules. We do not automatically grant applications for waivers or modifications: we assess the merits of individual application against the statutory tests laid out in FSMA.
Section 138A(4) of FSMA sets out the statutory tests which must be met:
- Compliance by a firm with the unmodified rules would be unduly burdensome or would not achieve the purpose for which the rules were made and
- The direction would not adversely affect the advancement of any of the PRA’s objectives.
In addition to the statutory tests, we will consider other relevant factors before a waiver or modification is granted, including whether it is compatible with European law.
In exceptional circumstances, we may decide to grant a 'general' waiver (known as a 'waiver or modification by consent').
We have a statutory duty to publish the details of waivers and modifications we approve, unless we consider it inappropriate or unnecessary to do so. Waivers and modifications are published on the Financial Services Register.
A waiver or modification will not apply retrospectively.