Every provision in the Handbook must be interpreted in the light of its purpose.
GEN 2.2 Interpreting the Handbook
Purposive interpretation
The purpose of any provision in the Handbook is to be gathered first and foremost from the text of the provision in question and its context among other relevant provisions. The guidance given on the purpose of a provision is intended as an explanation to assist readers of the Handbook. As such, guidance may assist the reader in assessing the purpose of the provision, but it should not be taken as a complete or definitive explanation of a provision's purpose.
Evidential provisions
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(1)
The rules to which section 149of the Act applies ("evidential provisions") are identified in the Handbook by the status letter "E" in the margin or heading.
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(2)
Other provisions in the Handbook, although also identified by the status letter "E" in the margin or heading, are actually not rules but provisions in codes and GEN 2.2.3 R does not apply to them. These code provisions are GEN 2.1.4 E, and those provisions in the Code of Practice for Approved Persons (APER 3 and APER 4) and the Code of Market Conduct (MAR 1) with the status letter "E".
Use of defined expressions
Examples of related expressions are:
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(1)
"advice on investments" and "advise on investments", which should be interpreted by reference to "advising on investments";
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(2)
"closely linked", which should be interpreted by reference to "close links";
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(3)
"controls" and "controlled", which should be interpreted by reference to "control"; and
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(4)
"effect", as for example in "effect a life policy", which should be interpreted by reference to "effecting contracts of insurance".
Unless the context otherwise requires, where italics have not been used, an expression bears its natural meaning (subject to the Interpretation Act 1978; see GEN 2.2.11 R to GEN 2.2.12 G).
Application of the Interpretation Act 1978
The Interpretation Act 1978 applies to the Handbook.
The application of the Interpretation Act 1978 to the Handbook has the effect, in particular, that:
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(1)
expressions in the Handbook used in the Act have the meanings which they bear in the Act, unless the contrary intention appears;
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(2)
where reference is made in the Handbook to an enactment, it is a reference to that enactment as amended and includes a reference to that provision as extended or applied by or under any other enactment, unless the contrary intention appears; and
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(3)
unless the contrary intention appears:
4Civil partnership - references to stepchildren etc
4Any reference in a provision of the Handbook made before 5 December 2005 to a stepchild, step-parent, stepdaughter, stepson, stepbrother or stepsister is to be interpreted in accordance with section 246 of the Civil Partnership Act 2004.
4 GEN 2.2.12A R and sections 246 and 247 of the Civil Partnership Act 2004 amend each reference in the Handbook to a stepchild, step-parent and certain related expressions to take account of civil partnerships. As a result a reference (for example) to a stepchild of a person (A) includes a reference to the child of the civil partner of A where that child is not A's child.
Cross-references in the Handbook
References to writing
If a provision in the Handbook refers to a communication, notice, agreement or other document "in writing" then, unless the contrary intention appears, it means in legible form and capable of being reproduced on paper, irrespective of the medium used. Expressions related to writing must be interpreted accordingly.
GEN 2.2.14 R means that, for example, electronic media may be used to make communications which are required by a provision of the Handbook to be "in writing", unless a contrary intention appears, or the use of electronic media would contravene some other requirement such as the requirement to treat customers fairly under Principle 6. GEN 2.2.14 R does not, however, affect any other legal requirement which may apply in relation to the form or manner of executing a document or agreement.
8Activities covered by general rules
A general rule (that is a rule made section 138 of the Act (General rule-making power)) is to be interpreted as:
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(1)
applying to a firm with respect to the carrying on of all regulated activities, except to the extent that a contrary intention appears; and
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(2)
not applying to a firm with respect to the carrying on of unregulated activities, unless and then only to the extent that a contrary intention appears.
Continuity of authorised partnerships and unincorporated associations
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(1)
If a firm, which is a partnership7 or unincorporated association, is dissolved, but its authorisation continues to have effect under section 32 of the Act (Partnerships and unincorporated associations) in relation to any partnership or unincorporated association7 which succeeds to the business of the dissolved firm, the successor partnership or unincorporated association7 is to be regarded as the same firm for the purposes of the Handbook unless the context otherwise requires7.
77 -
(2)
[deleted]7
7 -
(3)
[deleted]7
7
In principle, it is possible to view a change of partners7 in a partnership7, or a change in the membership of the unincorporated association, as the formation of a new partnership7 or association. GEN 2.2.18 R reflects section 32 of the Act (Partnerships and unincorporated associations), which provides for the continuing authorisation of partnerships7 and unincorporated associations following a change in partners7 or members if certain conditions are satisfied. GEN 2.2.18 R ensures a similar effect to section 327 in relation to the status of the partnership7 or unincorporated associations as a "firm" or "authorised person" for the purposes of the Handbook.
7 7 7 7 7 7 9 7 73Designated investment exchanges3
In the Glossary, the definition of designated investment exchange lists certain investment exchanges. Further information on designated investment exchanges, including guidance on the addition of an investment exchange to the list, is set out in GEN 2 Annex 1 G and the obligation to pay the application fee is set out in 53FEES 3.25.
European Economic Area (EEA)
10The agreement on the European Economic Area, signed at Oporto on 2 May 1992, extends certain EU legislation to those EEA States which are not Member States of the EU, namely Norway, Iceland and Liechtenstein. References in the Handbook concerning the territorial scope of EU law should therefore be read as extending throughout the EEA where the context requires.
Treaty of Lisbon
10As a result of the Treaty of Lisbon, the European Union has replaced and succeeded the European Community. References in the Handbook to the European Community should therefore be interpreted as references to the European Union, where the context requires. In particular, references which are copied out directly from EU or UK legislation may contain references to the Community which should be read in conjunction with section 3 of the European Union (Amendment) Act 2008.
GEN 2 Annex 1 Designated investment exchanges
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Introduction |
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1. |
A designated investment exchange is an exchange appearing in the list of such exchanges in the Glossary. |
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Benefits of designation |
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2. |
Under certain rules, firms may treat transactions effected on a designated investment exchange in the same way as transactions on RIEs (for example, see 3CASS 2). 3 |
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Criteria for inclusion in the list of designated investment exchanges |
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3. |
Before adding an investment exchange to the list of designated investment exchanges in the Handbook, the FSA will comply with all the requirements imposed by the Act in relation to the exercise of its rule-making powers. This will include consulting on the proposed amendment to the list. |
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4. |
In considering compatibility of the proposed addition with the regulatory objectives, the FSA will determine whether the investment exchange provides an appropriate degree of protection for consumers having regard in particular to: |
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(1) |
the relevant law and practice, including the regulatory framework in which the investment exchange operates, in the country or territory in which the investment exchange's head office is situated and any other relevant country or territory; and |
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(2) |
the rules and practices of the investment exchange. |
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5. |
Only investment exchanges which do not carry on a regulated activity in the United Kingdom and are not regulated markets may be added to the list. This is because an investment exchange carrying on a regulated activity in the United Kingdom will need to apply for recognition as an RIE, or authorisation, and because a regulated market is usually treated in the same way as an RIE in the rules. |
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Applications to be added to the list of designated investment exchanges |
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6. |
An application to be added to the list should be in writing and delivered to the FSA by: |
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(1) |
post to: The Financial Services Authority 25 The North Colonnade Canary Wharf London E14 5HS; or |
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(2) |
leaving the application at that address. |
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7. |
In support of the application, an investment exchange should provide information on the questions set out in the table below. |
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An application will not be considered by the FSA until the application fee has been paid. See 12FEES 3.22 |
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Designated investment exchange questionnaire |
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1 |
In what way are members subject to formal supervision by the exchange or another supervisory or regulatory body? Describe how capital resources of members are monitored on an ongoing basis and how this is related to business done. |
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2 |
What powers does the exchange or any other supervisory or regulatory body have to intervene in a member's business in the event of misconduct, financial difficulties or otherwise? |
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3 |
What are the clearing arrangements of the exchange? How does the exchange ensure performance of a contract between its members? If relevant, what type of contract guarantee is available? |
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4 |
How is price information in respect of contracts effected on the exchange disseminated to investors, particularly those investors in the United Kingdom? |
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5 |
What are the exchange's arrangements for reporting and recording of transactions effected on the exchange? Please describe. |
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6 |
Does the exchange, or any other supervisory or regulatory body, require members to segregate the money and assets of the member's clients from the money and assets of the member? If so, please describe in outline how this operates. If not, are investors protected in any other way in the event of the insolvency of a member or the exchange? |
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7 |
Does the exchange have procedures for the investigation of complaints? Please describe what they are. |
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8 |
Does the exchange classify the different contracts traded on it in terms of liquidity? Is it possible to identify certain contracts which are more liquid than others and in which a ready market might be considered to exist? |