CRED App 2.1 Detailed contents of CRED

CRED App 2.1.101/01/2005

1	Introduction
	1.1	The Credit Unions sourcebook
2	Reader's Guide
	2.1	What is this guide?
	2.2	Structure
	2.3	Contents of CRED
	2.4	Status of provisions
		2.4.2	Rules: R
		2.4.4	Evidential provisions: E
		2.4.6	Guidance: G
		2.4.11	Direction: D
	2.5	Numbering: Pages
	2.6	Numbering: Contents
	2.7	Defined terms
	2.8	Schedules
		2.8.2	Transitional provision
		2.8.3	Schedule 1: Rules that can be waived
		2.8.4	Schedule 2: Notification requirements
		2.8.5	Schedule 3: Contents of the FSA Handbook
		2.8.6	Schedule 4: Powers exercised in making the Handbook
		2.8.7	Schedule 5: Rights of action for damages
		2.8.8	Schedule 6: Rules that can be waived
		2.8.9	Schedule 7: Schedule of releases1
3	The FSA's Principles for Businesses
	3.1	Application and Purpose
	3.2	The Principles
	3.3	Consequences of breaching the Principles
4	Senior management arrangements, systems and controls
	4.1	Application and purpose
	4.2	Apportionment of responsibilities
	4.3	Systems and controls
		4.3.1	General
		4.3.5	Rules and evidential provisions
		4.3.15	Committee of management
		4.3.19	Organisation
		4.3.28	Documentation of systems of control
		4.3.32	Accounting records and systems
		4.3.37	Compliance
		4.3.41	Management information
		4.3.46	Information for the FSA
		4.3.47	Personnel
		4.3.50	Internal Audit
		4.3.61	Business planning
		4.3.69	Documentation of policies and procedures
		4.3.72	Business continuity
5	Threshold conditions
	5.1	Application and purpose
	5.2	The Conditions
6	The Approved persons Regime
	6.1	Application and purpose
	6.2	The Statements of Principle of Code of Practice for Approved Persons (APER)
		6.2.2	Introduction
		6.2.4	The Statements of Principle
		6.2.6	Code of Practice for Approved persons
		6.2.7	Factors relevant to Statements of Principle
		6.2.9	Enforcement procedures
	6.3	Approved Persons
		6.3.2	Introduction
		6.3.3	Purpose of the regime
		6.3.4	Controlled functions
		6.3.5	Specification of functions
	6.4	Assessing fitness and propriety
		6.4.1	Purpose
		6.4.2	Background
		6.4.3	Assessing fitness and propriety
7	Investment and borrowing
	7.1	Application, purpose and interpretation
	7.2	Investment
		7.2.1	Types of investment
		7.2.2	Maturity of investments5
		7.2.4	Cash in custody of officers
		7.2.5	Investment conditions no longer satisfied
		7.2.6	Transactions between credit unions
	7.3	Borrowing and Financial risk management2
		7.3.16	Borrowing
		7.3.7	Financial risk management policy statement
27A	Shareholding
	2 7A.1	Application and purpose
	2 7A.2	Members' shares
		2 7A.2.1	Maximum shareholdings
		2 7A.2.5	Joint accounts
		2 7A.2.7	Dividends on shares
	2 7A.3	Deposits6
	2 7A.4	Insurance against fraud or other dishonesty
	2 Ann 1	Insurance against fraud or other dishonesty
8	Capital requirements
	8.1	Application and purpose
	8.2	Components of capital
	8.3	Version 1 credit unions
		8.3.1	Requirement to maintain positive net worth
		8.3.5	Building reserves
		8.3.9	Minimum initial capital
		8.3.12	Capital requirement for version 1 credit unions wishing to lend amounts of more than £5,000 in excess of the borrowing member's shareholding
		8.3.14	Capital requirements for large version 1 credit unions
	8.4	Version 2 credit unions
		8.4.3	Minimum initial capital
9	Liquidity
	9.1	Application, purpose and interpretation
	9.2	General requirements
	9.3	Minimum liquidity requirements
10	Lending to members5
	10.1	Application and purpose
	10.2	General requirements
	10.3	Lending limits
	10.4	Large exposures
	10.5	Provisioning
11	Conduct of business4
	11.1	Introduction
	11.2	Financial promotion
	4 11.3	Statutory status disclosure
	11.47	Entering into a distance contract for accepting deposits7
12	Money Laundering
	12.1	Introduction
		12.1.1	What is Money laundering?
	12.2	Money laundering and the FSA
	12.3	Identification of the Client
	12.4	External Reporting
	12.5	Government and Financial Action Task Force findings
	12.6	Compliance Monitoring
	12.7	Record keeping
13	Registration and Authorisation
	13.1	Application and purpose
	13.2	Introduction
	13.2A6	Use of name "credit union"6
	13.3	What does registration mean?
	13.4	Process for registration
	13.5	What does authorisation involve?
	13.6	Process for Part IV permission
	13.7	Applying for approved persons status
	13.8	The FSA's decision making procedures
	Ann 1	Requirements of Registration [table]
	Ann 1A8	Common bond8
	Ann 1B8	Section 1 of the Credit Unions Act 1979 (as amended)8
	Ann 1C8	Qualifications approved by the FSA (and the Registry of Friendly Societies)8
	3 Ann 2	Eligibility for membership of a credit union
14	Supervision
	14.1	The FSA's approach to supervision
		14.1.1	Application and purpose
		14.1.6	The FSA's risk based approach to supervision
		14.1.7	Tools of supervision
	14.2	Information gathering by the FSA on its own initiative
		14.2.1	Application and purpose
		14.2.7	Information gathering by the FSA on its own initiative: background
		14.2.9	Information gathering by the FSA on its own initiative: cooperation by credit unions
		14.2.13	"Mystery Shopping"
	14.3	Auditors
		14.3.1	Application and purpose
		14.3.3	Appointment of auditors
		14.3.5	Auditors' qualifications
		14.3.12	Auditors' independence
		14.3.16	Credit unions' cooperation with their auditors
		14.3.20	Notification of matters raised by auditor
		14.3.22	Rights and duties of all auditors
	14.4	Skilled persons
		14.4.1	Application and purpose
		14.4.3	The FSA's power
		14.4.4	Policy on the use of skilled persons
		14.4.5	Appointment and reporting process
		14.4.6	Duties of a credit union
		14.4.8	Confidential information privilege
	14.5	Application to vary or cancel Part IV permission
		14.5.1	Application and purpose
		14.5.5	Introduction
		14.5.6	Applications for variation of permission
		14.5.15	Applications for cancellation of permission
		14.5.29	Ending authorisation
		14.5.30	Additional guidance
	14.6	Individual requirements
		14.6.1	Application and purpose
		14.6.4	The FSA's powers to set individual requirements on its own initiative
		14.6.7	Criteria for varying a credit union's permission
	14.7	Waiver and modification of rules
		14.7.1	Application and purpose
		14.7.3	Introduction
		14.7.5	Applying for a waiver
		14.7.11	Notification of altered circumstances relating to waivers
		14.7.12	Publication of waivers
		14.7.15	Varying waivers
		14.7.16	Revoking waivers
		14.7.19	Decision making
	14.8	Individual guidance
		14.8.1	Application and purpose
		14.8.4	Making a request for individual guidance
		14.8.7	Giving individual guidance to a credit union on the FSA's own initiative
		14.8.9	Reliance on individual guidance
	14.9	Notifications to the FSA
		14.9.1	Application and purpose
		14.9.3	General notification requirements
		14.9.13	Core information requirements
		14.9.15	Inaccurate, false or misleading information
		14.9.18	Form and method of notification
	14.10	Reporting requirements
		14.10.1	Application and purpose
		14.10.4	General provisions on reporting
		14.10.5	Quarterly Return
		14.10.7	Annual Return
		14.10.9	Accounts and audit
		5 14.10.12	Financial penalties for late submission of reports
		14.10.136	Controllers and close links 6
	Ann 1	Accounts and audit - Friendly and Industrial and Provident Societies Act 1968
15	Enforcement
	15.1	Application and purpose
	15.2	Investigation and enforcement powers
	15.3	The FSA's approach to the use of its investigation and enforcement powers
	15.4	The FSA's policies and procedures for taking enforcement action
	3 15.5	Financial penalties for late submission of reports
	Ann 1	Enforcement Powers [table - powers available under Industrial and Provident Societies legislation and the Credit Unions Act 1979]
	Ann 2	Enforcement Powers [table - powers referred to in ENF]
	3 Ann 3	Financial Penalties [table - indicative scale of financial penalties for reports no more than 28 days late]
16	Decision making manual (DEC)
	16.1	Application and purpose
	16.2	Introduction
	16.3	Guidance on DEC
		16.3.1	DEC 1
		16.3.3	DEC 2
		16.3.4	DEC 3
		16.3.5	DEC 4
		16.3.10	DEC 5
17	Complaint handling procedures for credit unions5
	2 17.1	Application and purpose
	17.2	Internal complaint handling procedures: general requirements
	17.3	Eligible complainants
	17.4	Internal complaint handling procedures: additional requirements
	17.5	Time limits for dealing with a complaint
	17.6	Record keeping and reporting
	17.7	Co-operation by credit unions with the Ombudsman
	5 Ann 1	Complaints report

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CRED App 2.1 Detailed contents of CRED