PRIN 3.4 General

11PRIN 3.4.1R, PRIN 3.4.2R and PRIN 1 Annex 1 do not apply with respect to:

1. (1)

   credit-related regulated activities; or

2. (2)

   regulated claims management activities; or

3. (3)

   regulated funeral plan activities; or

4. (4)

   payment services; or

5. (4A)

   13regulated pensions dashboard activity; or

6. (5)

   the issuing of electronic money (where not a regulated activity).

For business other than MiFID or equivalent third country business,7 the only requirement of Principle 7 relating to eligible counterparties3 is that a firm must communicate information to eligible counterparties3 in a way that is not misleading.

For the purposes of PRIN, a firm intending to carry on, or carrying on, activities that do not involve designated investment business, may treat a client as an eligible counterparty in accordance with PRIN 1 Annex 1 R.2

1. (1)

   6Paragraph (2) applies in relation to an individual who:

   1. (a)

      has provided, or is to provide, a guarantee or an indemnity (or both) in relation to a regulated credit agreement, a regulated consumer hire agreement or a P2P agreement; and

   2. (b)

      is not the borrower or the hirer.

2. (2)

   If the individual is not a customer, they are to be treated as if they were a customer for the purposes of Principles 6 and 7 and as if they were a retail customer for the purposes of Principle 12 and PRIN 2A12.

3. (3)

   For the purposes of this rule, a guarantee does not include a legal or equitable mortgage or a pledge.

A contravention of the rules in PRIN does not give rise to a right of action by a private person under section 138D of the Act (and each of those rules is specified under section 138D(3) of the Act as a provision giving rise to no such right of action).

Where Principle 11 refers to regulators, this means, in addition to the FCA7, other regulators with recognised jurisdiction in relation to regulated activities, payment services and electronic money10 whether in the United Kingdom or abroad.