CRED 4.1 Application and purpose

The purpose of this chapter is to provide further guidance to credit unions with a permission to accept deposits (see CRED 13.5) on the application of Senior management arrangements, Systems and Controls (SYSC), together with additional rules and guidance that are specific to credit unions.

1SYSC 1 to SYSC 3 apply to all credit unions in respect of the carrying on of their regulated activities and unregulated activities in a prudential context. SYSC 4 applies to all credit unions without restriction.2

The purposes of SYSC are:

1. (1)

   to encourage directors and senior managers to take appropriate practical responsibility for the credit union's arrangements on matters likely to be of interest to the FSA because they impinge on the FSA's function under the Act;

2. (2)

   to reinforce Principle 3, under which all firms including credit unions must take reasonable care to organise and control their affairs responsibly and effectively with adequate risk management systems;

3. (3)

   to encourage all firms, including credit unions, to vest responsibility for effective and responsible organisation in specific directors and senior managers.

SYSC contains a number of high level rules designed to have general application to all firms.

Specific guidance on how these rules, and the general guidance that accompanies them, apply to the particular circumstances of credit unions is set out below.

SYSC 3.1.2 G (3) states that detailed requirements regarding systems and controls relevant to particular types of firm may be covered elsewhere in the Handbook. This chapter includes all such specific requirements for credit unions.

2SYSC 4 reminds firms of the provisions of the Public Interest Disclosure Act 1998 and encourages them to consider adopting appropriate internal whistleblowing procedures. This applies equally to credit unions but is not the subject of further guidance in this chapter.