PROF 5.3 Reference to other sourcebooks and manuals

The parts of the Handbook in which provisions are disapplied or modified in relation to authorised professional firms when carrying on non-mainstream regulated activities include those described in PROF 5.3.1A G to PROF 5.3.9 G3521

4.3.5 R provides that 4.3.1 R (Disclosure in letters to private customers) does not apply to an authorised professional firm with respect to its non-mainstream regulated activities.

COBS 18.11 12 provides that COBS12 does not apply to an authorised professional firm with respect to its non-mainstream regulated activities, except for:7

1. (1)

   the fair, clear and not misleading rule;12

   12
2. (1A)

   12the financial promotion rules, but only in limited circumstances;

3. (2)

   (where these are insurance distribution activities) the parts of COBS set out in COBS 18.11.2R(3)(a) to (i) which implemented21 the IDD apply19 unless:

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   1. (a)

      the designated professional body of the firm has made rules which implemented21 some or all of articles 1(4), 17, 18, 19, 20, 23, 24(1) to (4) and (6), 29, and 30 of the IDD19;

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   2. (b)

      those rules have been approved by the FCA under section 332(5) of the Act; and7

   3. (c)

      the firm is subject to the rules in the form in which they were approved;7

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4. (3)

   COBS 8.1.3 R (Client agreements), except for the requirement to provide information on conflicts of interest; and1412

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5. (4)

   COBS 5.2 (E-commerce).14

TC Appendix 3 11 provides that TC11, which imposes the substantive training and competence requirements for retail clients or customers11, does not apply to an authorised professional firm with respect to its non-mainstream regulated activities.

20The following provisions do not apply to authorised professional firms when carrying on non-mainstream regulated activities:

1. (1)

   SYSC 6.3 (Financial crime), in relation to money laundering;

2. (2)

   SYSC 10.1 (Application), in relation to conflicts of interest;

3. (3)

   SYSC 10.2 (Chinese walls);

4. (4)

   SYSC 19F.2 (IDD remuneration incentives) where the designated professional body of the firm has made rules, approved by the FCA, that implemented21 article 17(3) of the IDD and that apply to the firm; and

5. (5)

   SYSC 28.2 ((Knowledge and ability requirements) except SYSC 28.2.1R(1)).

SUP 10C Annex 1 2.1R 22 provides that SUP 10C (FCA senior managers regime for approved persons in SMCR firms) does not apply (except in respect of the FCA required functions22) to an authorised professional firm in respect of its non-mainstream regulated activities. So a person such as a partner, whose only regulated activities are incidental to their22 professional services, in an authorised professional firm whose principal purpose is to carry on activities other than regulated activities, need not be an approved person.

DISP 1.1.5R (3) 10 provides that DISP 1 (Treating complainants fairly10) only applies 12to an authorised professional firm in so far as its mainstream regulated activities are12 concerned. DISP 2.3.4 R15 further provides that a complaint15 about an authorised professional firm cannot be handled under the Compulsory Jurisdiction of the Financial Ombudsman Service if it relates solely to non-mainstream regulated activity and can be handled by a designated professional body. This is because such a complaint15will be handled by the relevant professional body.

MAR 4.4.1 R (3) provides that MAR 4, which deals with the endorsement of the City Code on Takeovers and Mergers and the Rules Governing Substantial Acquisitions of Shares, does not have effect in relation to an authorised professional firm in respect of non-mainstream regulated activity.

3 MCOB 1.2.10 R 16 16 provides that MCOB does not apply to an authorised professional firm with respect to its non-mainstream regulated activities except for MCOB 3A (Financial promotions and communications with customers).18

4 CASS 1.2.4 R provides that with the exception of CASS 1 and the insurance client money chapter, CASS12 does12 not apply to authorised professional firms when carrying on non-mainstream regulated activities. CASS 1.2.5 R further provides that if the non-mainstream regulated activities are insurance distribution activity19, CASS 5 (the insurance client money chapter)12 does not apply to an authorised professional firm, if the firm's designated professional body has rules applicable to the firm which implemented21 the IDD19 and which are in the form approved by the FCA under section 332(5) of the Act.4

1. (1)

   5ICOBS13 does not apply to an authorised professional firm with respect to its non-mainstream regulated activities (see ICOBS 1 Annex 1, Part 1, paragraph 3.1R19, except for:

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   1. (a)

      the provisions on communications to clients and financial promotions (ICOBS 2.2);13

      13
   2. (b)

      the e-commerce provisions (ICOBS 3.2);13

      13
   3. (c)

      status disclosure requirements in relation to complaints procedures (ICOBS 4.1); and13

      13
   4. (d)

      provisions in ICOBS which implemented21 articles 1(4), 17, 18, 19, 20, 23, and 24 of the IDD19 (see ICOBS 2.2.2R (communication to customers and financial promotions), ICOBS 2.2.2AR (marketing communications), ICOBS 2.5.-1R (the customer’s best interests rule), ICOBS 2.6 (Distribution of connected contracts through exempt persons), ICOBS 4.1 (Information about the firm, its services and remuneration), ICOBS 4.1A (Means of communicating to customers), ICOBS 4.3 (remuneration disclosure), ICOBS 5.2 (Demands and needs), ICOBS 5.3.3R (Advice on the basis of a fair analysis), ICOBS 5.3.4R (Personalised explanation), ICOBS 6A.1.4R (Ensuring the customer can make an informed decision) and ICOBS 6A.3 (Cross-selling)19), except to the extent that the firm is subject to equivalent rules of its designated professional body which have been approved by the FCA.

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2. (2)

   [deleted]13

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