MIGI APP 1.1 Appendix A: brief description of key terms in the Guide

Appointed representative (AR)

A person or firm that carries on certain regulated activities under the responsibility of a principal. The principal must be an authorised firm and has full responsibility for ensuring that the AR complies with our requirements.

Approved person

A person to whom the FSA has given its approval for the performance of a controlled function.

Client assets

Assets that you hold on behalf of a client, for example, client money and client title documents such as bearer bonds.

Client money

Money that a firm holds on behalf of a client in the course of carrying on mortgage or insurance mediation activities. In the case of insurance mediation activities, this includes money that a firm treats as client money in line with the FSA client money rules set out in CASS.

Controlled function

Controlled functions are those jobs or functions within an authorised firm that have a particular regulatory significance, such as being a member of the governing body of the firm. You will find a full list of the controlled functions at SUP 10.4.5 R.

Customer

In relation to insurance mediation activities, a 'customer' is, broadly, a policyholder or potential policyholder. This can include a member of a group insurance policy who has direct rights under the policy, e.g. to claim.

In relation to mortgage mediation activities, a 'customer' is, broadly, a borrower or potential borrower (who is an individual or trustee).

Eligible complainant

A person eligible to have a complaint considered by the Financial Ombudsman Service as defined in DISP 2.4.

Financial Ombudsman Service (FOS)

The scheme provided under Part XVI of the FSMA (the Ombudsman Scheme) under which certain disputes may be resolved quickly and with minimum formality by an independent person. Further details are in DISP.

Financial Services Compensation Scheme (FSCS)

The scheme set up to pay compensation to customers of FSA authorised firms. It can pay compensation if an FSA authorised firm is unable to pay claims against it, usually because it has gone out of business. Further details are in COMP.

FSMA

The Financial Services and Markets Act 2000.

FSA Register

This is a public record of financial services firms, individuals and other bodies that fall under our regulatory jurisdiction. It can be accessed on our website at www.fsa.gov.uk/register/.

General insurance contract

Any contract of insurance within Part 1 Schedule 1 to the Regulated Activities Order (Contracts of General Insurance), for example motor insurance and home contents insurance.

Governing body

The board of directors, committee of management or other governing body of a firm. In relation to a sole trader, the sole trader him or herself would be the governing body.

The Handbook

The FSA Handbook of Rules and Guidance.

Insurance intermediary

A firm carrying on insurance mediation activities.

Insurance mediation activity

Any of the following regulated activities:

(1) dealing as agent in contracts of insurance;

(2) arranging (bringing about) deals in contracts of insurance;

(3) making arrangements with a view to transactions in contracts of insurance;

(4) assisting in the administration and performance of a contract of insurance;

(5) advising on contracts of insurance; and

(6) agreeing to carry on any of the above activities.

Mortgage intermediary

A firm that arranges regulated mortgages or makes arrangements with a view to regulated mortgages.

Mortgage lender

A firm with permission (or which ought to have permission) for entering into a regulated mortgage contract.

Mortgage mediation activity

Advising on, arranging or making arrangements with a view to regulated mortgages.

Non-investment insurance contract

A contract of insurance that is a general insurance contract or a pure protection contract but which is not a long-term care insurance contract.

Permission

Permission given by the FSA under Part IV of the FSMA to carry on regulated activities.

Principles

One of the principles set out in PRIN 2.1.1 R (Principles for Businesses) contained in the Principles for Businesses sourcebook.

Pure protection contract

A long-term insurance contract that is not an investment product, e.g. critical illness insurance.

Regulated activity

Any of the activities specified in Part II of the Regulated Activities Order.

Regulated Activities Order

The Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 as amended.

Regulated mortgage contract

A loan to an individual secured by first charge on land in the UK, where the property is to be at least 40% used by the borrower or a member of his immediate family. Second charge loans are therefore not RMCs and buy-to-let mortgages are extremely unlikely to be RMCs.

Reinsurance mediation

The activities of carrying out work preparatory to the conclusion of, concluding, or assisting in the administration and performance of contracts of reinsurance.

Retail customer and commercial customer

In relation to insurance mediation activity:

(1) A 'retail customer' is a customer who is an individual acting outside his trade business or profession.

(2) A 'commercial customer' is a customer who is not a 'retail customer'.

If you are in any doubt about whether a customer is a retail or commercial customer, you should treat the customer as a 'retail customer'.

Retail Mediation Activities Return (RMAR)

This is the information we require mortgage and insurance intermediaries to submit to us electronically.

Threshold conditions

Any of the conditions in Schedule 6 to the FSMA (see Threshold Conditions (COND)).

Variation of permission (VOP)

A variation to a firm's permission given by us under Part IV of the FSMA to carry on regulated activities.

Waiver

A direction waiving or modifying a rule.