MIGI 2.1 Introduction

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This chapter provides an overview of the Handbook and explains:

(1)
which parts of the Handbook apply to mortgage and insurance intermediaries;
(2)
how the Handbook is structured; and
(3)
how to interpret rules, guidance and evidential provisions in the Handbook.

MIGI 2.2 Content of the Handbook

Where can you find the rules that apply to mortgage and insurance intermediaries?

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The Handbook and Tailored Handbook (see paragraph 2.2.2) can be found:

(1)
on our website (www.fsa.gov.uk) and click on 'FSA Handbook':
(2)
on the CD-ROM sent to all authorised firms each month.

You can buy paper copies of the full Handbook from our Publications Order Helpline or order online through our website. We update the website daily, but the CD-ROM and paper copy are only updated once a month.

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Only some of our rules and guidance apply to mortgage and insurance intermediaries. To make it more convenient for you, we have brought together the relevant provisions in 'Tailored Handbooks' - one for mortgage intermediaries and another for insurance intermediaries. The table below provides an overview of the Handbook for small mortgage and insurance intermediaries to highlight which parts will be most relevant to them, and where they are covered in the Guide. There will be some variation, as not all mortgage and insurance intermediaries undertake identical business or have permission to carry on the same regulated activities.

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Overview of contents of the Handbook:

Block	Sourcebook or manual	What does it include?	Where in the Guide can I find out more?
1 High Level	PRIN Principles for Businesses	A general statement of the main regulatory obligations of your firm.	Part I, Chapter 3
	SYSC Senior Management Arrangements, Systems and Controls	Rules and guidance on how key responsibilities for managing the business should be allocated amongst your senior management team; and the systems and controls your firm should have in place.	Part I, Chapter 3
	COND Threshold Conditions	The minimum standards your firm must satisfy to be authorised (and remain authorised) by us.	Part I, Chapter 4
	APER Statements of Principles and Code of Practice for Approved Persons	A set of principles and illustrative code of practice that describe the standards of behaviour that we expect of individuals in your firm who are performing 'controlled functions', i.e. functions that have a particular regulatory significance.	Part I, Chapter 6
	FIT The Fit and Proper test for Approved Persons	This sets out the criteria which we use to assess whether an individual is suitable to perform a controlled function.	Part I, Chapter 6
	GEN General provisions	This sets out some of the underlying legal framework to FSA regulation and requirements regarding statutory status disclosure.	Interpreting the Handbook: Part I, Chapter 2.3 Disclosure of status: Part I, Chapter 5
2 Business Standards	PRU Integrated Prudential	The rules about the financial safeguards your firm needs to have in place, for example capital requirements and professional indemnity insurance (PII) requirements.	Capital: Part I, Chapter 7 PII: Part I, Chapter 8
	MCOB Mortgages: Conduct of Business	If your firm does mortgage business, these are the requirements relating to how your firm must deal with customers.	Part II, Chapter 2
	ICOB Insurance: Conduct of Business	If your firm does insurance mediation activities, these are the requirements relating to how your firm must deal with customers.	Part III, Chapter 3
	CASS Client Assets	Our requirements on firms that hold client money. These client money rules do not apply to mortgage intermediaries. Insurance intermediaries only have to comply with CASS Chapter 5. The rest of CASS is not covered in the Guide.	Part III, Chapter 2
	TC Training and Competence	The arrangements your firm will need to have in place to ensure staff are appropriately trained and competent for their role.	Mortgage intermediaries: Part II, Chapter 3 Insurance intermediaries: Part III, Chapter 4
3 Regulatory Processes	AUTH Authorisation	Gives guidance to your firm on: whether you need FSA authorisation; the procedures you need to follow for authorisation; and our role in your authorisation. The perimeter guidance on mortgage and insurance mediation currently in AUTH App 4 and 5 will shortly be transferred to a new Perimeter Guide outside the Handbook (with the shortened title of PERG).	Part I, Chapter 4
3 Regulatory Processes	SUP Supervision	This manual sets out what we do to ensure you are complying with our requirements, including the requirements on what information you need to report to us and when. Chapter 12 of SUP includes the arrangements for firms with appointed representatives.	Variation and cancellation of Permission: Part I, Chapter 16 Reporting and notifications: Part I, Chapter 11 Audit requirements: Part I, Chapter 12 Waivers and rule modifications: Part I, Chapter 17 Appointed representatives: Part I, Chapter 9 Fees: Part I, Chapter 19
4 Redress	DISP Dispute resolution: Complaints	The procedures your firm will need to have in place to handle any complaints made by its customers and the rules that apply to firms subject to the Financial Ombudsman Service.	Part I, Chapter 14 and, on the FOS, Part I, Chapter 18
4 Redress	COMP Compensation	Information on the Financial Services Compensation Scheme, which is the scheme to compensate customers if the firm responsible for their loss is not able to pay the claim.	Part I, Chapter 18

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In addition, the Enforcement manual (ENF), Decision making manual (DEC) and Complaints against the FSA manual (COAF) contain information about the FSA's policies and procedures which will be of relevance to small mortgage and insurance intermediaries in certain circumstances. These manuals are not covered in the Guide but you can find further information about them on our website (www.fsa.gov.uk).

Which parts of the Handbook apply to mortgage and insurance intermediaries?

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The following sourcebooks are unlikely to apply to small firms doing only mortgage and insurance mediation activities:

(1)
ML (Money Laundering): the arrangements firms must have in place to prevent money laundering occurring; however, see Part I, Chapter 15 for further information on what we do require of mortgage and insurance intermediaries in relation to financial crime.
(2)
MAR (Market conduct): the requirements to ensure fair play in the market.
(3)
COB (Conduct of Business): the requirements relating to business processes for firms carrying on regulated activities that are not covered by MCOB or ICOB.
(4)
The interim prudential sourcebooks: these explain the financial resources requirements for firms carrying on FSA regulated activities other than mortgage and insurance mediation activities. The rules in these sourcebooks are interim rules that will be replaced in 2007.
(5)
The specialist sourcebooks: these sourcebooks show how the Handbook applies to certain sectors, such as collective investment schemes and credit unions. If your firm is a member of a designated professional body, such as the Law Society, you will need to read the Professional Firms sourcebook (PROF).

How are the sourcebooks and manuals structured?

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Any word that is in italics in the Handbook is defined in the Handbook Glossary.

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There is no index to the Handbook, however our website and CD-ROM contain search facilities that can be used to find particular words and phrases.

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A rule at the beginning of each chapter of the Handbook identifies those firms to which it applies. For example, PRU 9.1.1R states "This section applies to a firm with a permission to carry on insurance mediation activity". So it is recommended that you read the application rule first before looking at the rest of the chapter, checking the terms in italics with the Handbook Glossary, where necessary.

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There are tables of information at the end of each sourcebook or manual. These are numbered consistently throughout the Handbook and provide a summary of requirements as set out below.

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Schedules of information at the end of each sourcebook or manual:

Schedule	Contents
1	Record keeping requirements (see Part I, Chapter 13 of the Guide)
2	Notification and reporting requirements (see Part I, Chapter 11 of the
	Guide)
3	Fees (see Part I, Chapter 19 of the Guide)
4	FSA powers used in making the provisions
5	Rules where rights of action exist under Section 150 of the FSMA (action for damages by a person who suffers loss as a result of a breach of the rules)
6	Rules that we have powers to waive or modify (See Part I, Chapter 17 of the Guide)

How do you install the CD-Rom?

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When you first install the CD-ROM, selecting 'Preferences' enables you to select the entire Handbook or one or more sourcebooks or manuals, so allowing you to refine your search within the Handbook. Tick each sourcebook or manual to select it for your search. You can amend your selection whenever you wish. This function does not remove any content from the CD-ROM.

MIGI 2.3 Interpreting the Handbook

What is the difference between rules and guidance?

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We have prepared a Reader's Guide to help firms generally to navigate the Handbook. You can access it via the CD-ROM (by clicking on 'Handbook') and on our website at - www.fsahandbook.info/FSA/pdf/rguide.pdf.

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As explained more fully in the Reader's Guide, the provisions in the Handbook do not all have the same status. The difference between Rules and Guidance is important. The Rules in the Handbook (marked with an 'R') create binding obligations on firms. If a firm breaches such a rule, it may be subject to enforcement action and in some circumstances to an action for damages.

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Guidance in the Handbook (marked with a 'G') is general Guidance given to more than one firm or individual. Guidance is not binding on a firm. As long as a firm follows Guidance that indicates possible means of compliance with a rule or recommends a course of action or arrangement, we intend to proceed on the basis that the firm has complied with the relevant Handbook rule. A firm may find that Guidance is a helpful indication of how compliance with a Rule may be achieved without devising its own approach to that Rule.

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There are also Evidential Provisions. These are rules but they are not binding in their own right - they are marked with a status letter 'E' in the margin or header. You can find a more detailed explanation in the Reader's Guide.

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