MAR 5.5 Parts of the Handbook applicable to the operation of an ATS

High Level Standards

Principles for Businesses (PRIN)

This applies. However, note that some Principles are (partially) disapplied for clients that are market counterparties as further detailed in PRIN 3.4.

Senior management arrangements, Systems and Controls (SYSC)

This applies.

Threshold Conditions (COND)

This applies.

Statements of Principle and Code of Practice for Approved Persons (APER)

This applies to an approved person who performs a controlled function for an ATS operator.

The Fit and Proper test for Approved Persons (FIT)

This applies.

General provisions (GEN)

This applies.1

Business standards

Interim Prudential sourcebooks (IPRU)

These apply, as appropriate.

Conduct of Business sourcebook (COB)

In general, COB applies to ATS operators.

Service companies that operate an ATS are subject to the provisions of COB mentioned in COB 1.2.1 (2)A.

There are special terms of business set out in COB 4.2.17 for ATS operators that have customers (as opposed to those whose only clients are market counterparties).

Most of COB will not apply to ATS operators if their business is wholly within the scope of Inter-Professional Conduct (Inter-professional conduct): see COB 1.3.4.

Market Conduct sourcebook (MAR)

The Code of Market Conduct (The Code of Market Conduct) applies. Price Stabilising Rules (Price Stabilising Rules)and Endorsement of the Takeover Code (Endorsement of the Takeover Code) are likely to be of limited relevance to the business of an ATS operator.

Inter-Professional Conduct (Inter-Professional Conduct will ordinarily be relevant to ATS's whose clients are market counterparties. MAR 3.4.10A G is particularly relevant to the information that these ATS operators should provide to their clients.

Ordinarily, service companies are not covered by Inter-Professional Conduct. However, MAR 3.1.1 R provides that MAR 3.4.10 G and MAR 3.4.10A G apply to a service company that operates an ATS.

MAR 5 (Alternative trading systems) is directly relevant to the operation of an ATS.

Training and Competence sourcebook (TC)

This applies.4

Regulatory process

Authorisation manual (AUTH)

This applies in relation to an application by a prospective ATS operator for authorisation. In particular, 3.24.1 provides that if an applicant who wishes to operate an ATS intends to assume responsibility for the clearing or settlement of transactions effected using the ATS, the applicant should provide sufficient information with its application to demonstrate that it has adequate arrangements in place to ensure efficient clearing or settlement (as the case may be) of the transactions.

Supervision manual (SUP)

This applies.

Enforcement manual (ENF)

This applies.

Decision making manual (DEC)

This applies.

Redress

Dispute resolution: Complaints sourcebook (DISP)

ATS operators are subject to the compulsory jurisdiction of the Financial Ombudsman Service.

However, a firm which notifies the FSA under DISP 1.1.7 that it does not conduct business with eligible complainants (persons eligible to have a complaint considered under the Financial Ombudsman Service, as defined in DISP 2.4) will be exempt from the rules on complaint handling procedures for firms (DISP 1.2 to DISP 1.7) and from the Financial Ombudsman Funding rules (FEES 53).

Redress

Compensation sourcebook (COMP)

COMP applies to all firms. However, ATS operators that do not conduct business that could give rise to a protected claim by an eligible claimant as defined and have no reasonable likelihood of doing so can gain exemption under COMP 13.3 from some compensation scheme levies.

Complaints against the FSA (COAF)

This applies.

Specialist sourcebooks

Collective Investment Schemes Sourcebook (CIS)

ECO applies to an ATS operator that is an electronic commerce activity provider.

REC does not apply to an ATS operator.

The other specialist sourcebooks are likely to be of limited relevance to an ATS operator in respect of its operation of an ATS.

Credit Unions (CRED)

Electronic money (ELM)

E-commerce Directive (ECO)

Lloyd's (LLD)

Professional firms (PROF)

Recognised Investment Exchanges and Recognised Clearing Houses (REC)

Listing, Prospectus and Disclosure2

Listing Rules, LR2

This may apply if the firm is applying for listing in the United Kingdom, is a listed issuer in the United Kingdom, is a sponsor or is applying for approval as a sponsor.2

Prospectus Rules, PR2

This may apply if the firm makes an offer of transferable securities to the public in the United Kingdom or is seeking the admission to trading of transferable securities on a regulated market situated or operating in the United Kingdom.2

Disclosure Rules and Transparency Rules, DTR2

This may apply if the firm is an issuer, any class of whose financial instruments have been admitted to trading on a regulated market, or are the subject of an application for admission to trading on a regulated market, other than issuers who have not requested or approved admission of their financial instruments to trading on a regulated market.2

Special guides

Service companies (SERV)

This applies to a service company that operates an ATS.

Energy market participants (EMPS)

This applies to an energy market participant that operates an ATS.

Oil market participants (OMPS)

This applies to an oil market participant that operates an ATS.