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GEN 1.1 Application

[Note: ESMA has also issued guidelines under article 16(3) of the ESMA Regulation covering various topics relating to automated trading and direct electronic access.

7See www.fca.org.uk7]
GEN 1.1.1RRP
  1. (1)

    This chapter applies to every firm. GEN 1.3 (Emergency) also applies to an unauthorised person to whom a rule in the Handbook applies.1

  2. (2)

    For a UCITS qualifier, this chapter applies only with respect to the communication and approval of financial promotions to whichCOBS 4 (Communicating with clients, including financial promotion)3 applies and to the maintenance of facilities to which COLL 9.4 (Facilities in the United Kingdom) applies3.2

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GEN 1.1.2GRP

GEN 1.1.1 R (2) reflects section 266 of the Act (Disapplication of rules).

GEN 1.2 Referring to approval by the appropriate regulator9

GEN 1.2.1 G RP

The purpose of GEN 1.2.2 R is to prevent clients being misled about the extent to which the appropriate regulator9 has approved a firm's affairs.

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GEN 1.2.2 R
  1. (1)

    Unless required to do so under the regulatory system, a firm must ensure that neither it nor anyone acting on its behalf claims, in a public statement or to a client, expressly or by implication, that its affairs, or any aspect of them, have the approval or endorsement 2of the appropriate regulator9 or another competent authority2.

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  2. (2)

    Paragraph (1) does not apply to statements that explain, in a way that is fair, clear and not misleading, that:

    1. (a)

      the firm is an authorised person;

    2. (b)

      the firm has permission to carry on a specific activity;

    3. (c)

      an authorisation order has been made in relation to an AUT, ACS3 or ICVC;

    4. (d)

      a recognised scheme has that status;

    5. (e)

      the firm's approved persons have been approved by the appropriate regulator9 for the purposes of section 59 of the Act (Approval for particular arrangements);

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    6. (f)

      the firm has been given express written approval by the appropriate regulator9 in respect of a specific aspect of the firm's affairs.

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  3. (3)

    Paragraph (1) applies with respect to the carrying on of both regulated activities and unregulated activities.

GEN 1.2.3 G RP

GEN 1.2.2 R (2)(f) 1 is confined to written approval because of the need for clarity as to the scope of any approval given by the appropriate regulator9.

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GEN 1.3 Emergency

GEN 1.3.1 G RP

The appropriate regulator9 recognises that there may be occasions when, because of a particular emergency, a person (generally a firm, but in certain circumstances, for example in relation to price stabilising rules, an unauthorised person) may be unable to comply with a particular rule in the Handbook. The purpose of GEN 1.3.2 R is to provide appropriate relief from the consequences of contravention of such a rule in those circumstances.1

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GEN 1.3.2 R RP
  1. (1)

    If any emergency arises which:

    1. (a)

      makes it impracticable for a person to comply with a particular rule in the Handbook;

    2. (b)

      could not have been avoided by the person taking all reasonable steps; and

    3. (c)

      is outside the control of the person, its associates and agents (and of its and their employees);

    the person will not be in contravention of that rule to the extent that, in consequence of the emergency, compliance with that rule is impracticable.

  2. (2)

    Paragraph (1) applies only for so long as:

    1. (a)

      the consequences of the emergency continue; and

    2. (b)

      the person can demonstrate that it is taking all practicable steps to deal with those consequences, to comply with the rule, and to mitigate losses and potential losses to its clients (if any).

  3. (3)

    The person must notify the appropriate regulator9 as soon as practicable of the emergency and of the steps it is taking and proposes to take to deal with the consequences of the emergency.

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  4. (4)

    A notification under (3) must be given to or addressed and delivered in accordance with SUP 15.7 (Form and method of notification) (whether or not the person is a firm). If the person is not a firm, the notification must be given to or addressed for the attention of:FirmContact Centre, The Financial Conduct9 Authority, 25 The North Colonnade, Canary Wharf, London E14 5HS (tel: 0845 606 9966).1

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GEN 1.3.3 G RP

A firm should continue to keep the appropriate regulator9 informed of the steps it is taking under GEN 1.3.2 R (3), in order to comply with its obligations under Principle 11 (Relations with regulators).

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GEN 1.3.4 G

In the context of GEN 1.3.2 R, an action is not practicable if it involves a person going to unreasonable lengths.1

GEN 1.3.5 G RP

GEN 1.3.2 R operates on the appropriate regulator's9rules. It does not affect the appropriate regulator's9 powers to take action against a firm in an emergency, based on contravention of other requirements and standards under the regulatory system. For example, the appropriate regulator9 may exercise its own-initiative power in appropriate cases to vary a firm'sPart 4A permission9 based on a failure or potential failure to satisfy the threshold conditions (see SUP 7 (Individual9 requirements) and EG 8 (Variation and cancellation of permission and imposition of requirements on the FCA's8 own initiative and intervention against incoming firms)2).

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