REC 2A.3 Guidance on RAP recognition requirements
In assessing compliance with the RAP recognition requirements, the FSA will have regard to relevant guidance in REC 2 on the equivalent requirements set out in the Recognition Requirement Regulations. The FSA may also take into account compliance by the RAP or RAP applicant with the recognition requirements (see REC 2A.2.1 UK). The FSA will not make a separate assessment of compliance with the recognition requirements during the course of examining an application to become an RAP or as part of its ongoing supervision of an RAP, unless there is a specific reason to do so.
The guidance in relation to the recognition requirements in the sections of REC 2 listed in Column A of the table below applies to an RAP in relation to the equivalent RAP recognition requirements listed in Column C and (if shown) with the modifications in Column B.
Table: Guidance on RAP recognition requirements
Column A REC 2 guidance which applies to an RAP |
Column B Modification to REC 2 guidance for an RAP |
Column C Relevant RAP recognition requirement |
REC 2.2.2 G to REC 2.2.7 G (Relevant circumstances and Outsourcing) |
Reg 13 |
|
REC 2.3.3 G to REC 2.3.9 G (Financial resources) |
Reg 14 |
|
REC 2.4.3 G to REC 2.4.6 G (Suitability) |
In addition to the matters set out in REC 2.4.3 G to REC 2.4.6 G, the FSA will have regard to whether a key individual has been allocated responsibility for overseeing the auction platform of the UK recognised body. |
Reg 15 |
REC 2.5.3 G to REC 2.5.20 G (Systems and controls and conflicts) and REC 2.5A (Guidance on Public Interest Disclosure Act: Whistleblowing) |
Reg 16 and 17(2)(f)1 |
|
REC 2.6.26 G to REC 2.6.34 G (Safeguards for investors) |
Reg 17 |
|
REC 2.7.3 G to REC 2.7.4 G (Access to facilities) |
The FSA shall have regard to whether an RAP provides access to bid at auctions only to those persons eligible to bid under article 18 of the auction regulation. |
Reg 17(2)(a) and1 20 |
REC 2.8.3 G to REC 2.8.4 G (Settlement and clearing services) |
Reg 17(2)(d) and 21 |
|
REC 2.9.3 G to REC 2.9.4 G (Transaction recording) |
Reg 17(2)(e) |
|
REC 2.10.3 G to REC 2.10.4 G (Financial crime and market abuse) |
Reg 17(2)(g) |
|
REC 2.11.3 G to REC 2.11.4 G (Custody) |
REC 2.11.4 G is replaced with the following for an RAP: Where an RAP arranges for other persons to provide services for the safeguarding and administration services of assets belonging to users of its facilities, it will also need to satisfy the RAP recognition requirement in regulation 17(2)(h) of the RAP regulations (see REC 2A.2.1 UK). |
Reg 17(2)(h) |
REC 2.12.11 G to REC 2.12.12 G (Availability of relevant information) |
REC 2.12.11 G to REC 2.12.12 G are replaced with the following for an RAP: In determining whether appropriate arrangements have been made to make relevant information available to persons engaged in dealing in auction products, the FSA may have regard to: (1) the extent to which auction bidders are able to obtain information in a timely fashion about the terms of those auction products and the terms on which they will be auctioned, either through accepted channels for dissemination of information or through other regularly and widely accessible communication media; (2) what restrictions, if any, there are on the dissemination of relevant information to auction bidders; and (3) whether relevant information is, or can be, kept to restricted groups of persons in such a way as to facilitate or encourage market abuse. An RAP does not need to maintain its own arrangements for providing information on the terms of auction products to auction bidders where it has made adequate arrangements for other persons to do so on its behalf or there are other effective and reliable arrangements for this purpose. |
Reg 17(2)(c) |
REC 2.13.3 G to REC 2.13.6 G (Promotion and maintenance of standards) |
Reg 18 |
|
REC 2.14.3 G to REC 2.14.6 G (Rules and consultation) |
Reg 19 |
|
REC 2.15.3 G to REC 2.15.6 G (Discipline) |
Reg 22 |
|
REC 2.16.3 G to REC 2.16.4 G (Complaints) |
Reg 23 |