Category: Compliance & AML · Reviewed by Jake Leat, Associate Director · Last reviewed June 2026
The FCA Handbook sourcebook setting out the FCA’s procedures for taking statutory decisions — including warnings, decisions and final notices — and the methodology for calculating financial penalties.
DEPP — the Decision Procedure and Penalties manual — sets out how the FCA reaches and gives effect to formal statutory decisions. It describes who within the FCA may make a decision (executive procedures versus the Regulatory Decisions Committee, RDC), what process governs warning notices and decision notices, how representations are handled, and how financial penalties are calculated.
Made under FSMA section 395, which requires the FCA to publish a statement of policy on the decision-making process. The penalty methodology gives effect to section 124 (in respect of certain market abuse cases), section 169 (cases referred from the PRA) and the FCA’s general enforcement powers under Parts XI, XIV and XV of FSMA.
DEPP 2 covers warning notices. DEPP 3 covers decision notices and the RDC. DEPP 4 covers settlement (early settlement discount up to 30% — known as the “stage one” discount). DEPP 5 covers settlement decision-making. DEPP 6 contains the five-step penalty calculation framework: (1) any financial benefit derived; (2) seriousness multiplier on relevant revenue or notional starting figure; (3) mitigating and aggravating factors; (4) adjustment for deterrence; (5) settlement discount.
The Tribunal route under FSMA section 133 (Upper Tribunal Tax and Chancery Chamber) is available where the subject of action does not accept the FCA’s decision. Settlement discounts are tiered by stage — 30% if settled before issue of a warning notice, smaller discounts thereafter.
A firm subject to a section 206 financial penalty for breach of Principle 6 in relation to renewal pricing might see DEPP 6.5A applied: step 1 zero (no clear quantifiable benefit), step 2 a percentage of relevant revenue scaled by seriousness (typically 5%–20% of relevant revenue), step 3 adjusted for aggravating factors (e.g. inadequate management response), step 4 deterrence multiplier, step 5 30% settlement discount on early agreement.
FCA Handbook, Decision Procedure and Penalties manual (DEPP). Financial Services and Markets Act 2000, sections 124, 133, 169, 206, 395.
By Matt Bartlett, Director, on 2026-06-11.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-11. Apex Insurance Brokers Limited, FCA FRN 724952, Companies House 07014570. Not regulated advice — consult your broker on your specific position.
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