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  1. Point in time
    2006-07-07

SIFA 4.3 Contents of the Handbook

SIFA 4.3.1G

The Handbook is divided into Blocks that contain sourcebooks and manuals. Sourcebooks provide the source of the FSA's rules and guidance. Manuals contain processes to be followed by firms and by us.

High Level Standards (Block 1):

SIFA 4.3.2G

Block 1 deals with the fundamental requirements for all firms and so is relevant to you.

Sourcebook

Contents

PRIN

Sets out the overarching standards we expect of firms and will be familiar to you. It includes the Principles.

SYSC

Outlines our management arrangement requirements. While this is important to all firms, management control and accountability should clearly be simpler in a small firm.

FIT

Sets out our standards applied when giving approved person status and so is relevant when a firm submits an application for an employee to become an approved person. It is also relevant for the purposes of assessing the continuing fitness and propriety of approved persons.

APER

Is of continuing relevance as it sets out the standards of behaviour that we expect of approved persons.

COND

Sets out the minimum standards that firms must satisfy to retain authorisation (the 'Threshold Conditions').

GEN

Sets out some of the underlying legal framework. GEN 1.2 is likely to be one of the most relevant parts. The purpose of the section is to ensure that clients are not misled about the extent to which we have approved a firm's affairs. GEN 4 on statutory status disclosure is discussed at section 9.11 of the Guide. GEN 5.1 deals with the use of the FSA logo and the Key facts logo which must be included on a firm's initial disclosure document (IDD) and menu.

Prudential Standards (Block 2):

SIFA 4.3.3G

Chapters 1 and 13 of IPRU(INV) cover the financial resources requirements, including professional indemnity insurance (PII), that are likely to be relevant to smaller investment intermediaries. In most cases the other Interim Prudential sourcebooks will not be immediately relevant. These Prudential sourcebooks explain the financial resource requirements for other kinds of firm such as banks and insurance companies. Firms that do mortgage or insurance mediation as well as investment business need to consider the requirements of both PRU 9 and IPRU(INV) 13. There is more information in Chapter 8 of the Guide.

Business standards (Block 3):

SIFA 4.3.4G

Block 3 sets out most of the detailed requirements that will affect firms on a day-to-day basis.

SIFA 4.3.5G

COB will be of immediate practical relevance to you. COB has wide and varied application and so it is important for you to read the application provisions at the beginning of each chapter.

SIFA 4.3.6G

However, for typical smaller investment intermediaries, here is a broad indicator of those parts that are likely to be most immediately relevant to you (depending on the nature of your business):

COB Sourcebook

Chapter

Subject

Most of the following chapters will have practical relevance:

4

Accepting customers and customer classification

5

Advising and selling

5A

Providing basic advice on stakeholder products

6

Product disclosure and the customer's right to cancel or withdraw

Parts of the following chapters will have practical relevance:

2

Rules which apply when conducting designated investment business

3

Financial promotion

7

Dealing and managing

8

Reporting to customers

Not relevant in most cases:

1

General application: the various limitations of application are unlikely to be relevant to small firms doing UK business

8A

Claims handling under long-term care insurance contracts

10

Collective investment schemes

11

Trustee and depositary activities

12

Lloyd's
SIFA 4.3.7G

The rest of Block 3 contains:

  • Insurance: Conduct of Business (ICOB) sets out the business requirements applying to firms conducting business relating to general insurance or pure protection policies. This is likely to be relevant to smaller investment intermediaries with the relevant permission.
  • Mortgages: Conduct of Business (MCOB) sets out the conduct of business requirements applying to firms conducting regulated mortgage activities. This is also likely to be relevant to smaller investment intermediaries with the relevant permission.
  • Money Laundering (ML) has immediate relevance to smaller investment intermediaries, and builds on existing money laundering requirements.
  • Training & Competence (TC) has immediate relevance to smaller investment intermediaries.
  • Client Assets (CASS) provides rules and guidance on holding client assets and client money, including requirements regarding segregation and safe custody of assets and statutory trusts in respect of client money. It includes the rules and guidance that were previously included in COB 9. CASS will not be relevant to firms who do not have permission to hold client money or assets.
  • Market Conduct (MAR) is unlikely to be relevant but 'MAR 1: The Code of Market Conduct' provides guidance to all persons on whether or not behaviour amounts to market abuse.

Regulatory processes (Block 4):

SIFA 4.3.8G

Block 4 sets out our regulatory processes and procedures and contains the Authorisation (AUTH), Supervision (SUP), Enforcement (ENF), and Decision Making (DEC) manuals. Most of this may be of interest but will not be of immediate importance unless you are applying to vary the activities you are permitted to carry on, or facing potential enforcement action.

SIFA 4.3.9G

Parts of SUP do have more immediate relevance to smaller investment intermediaries. These are Chapters 8 - 10, 11 (if the firm is incorporated or is a partnership), 12, 15, parts of 16, and 20. They cover topics such as individual guidance, approved persons, notifications, financial reporting, and fee rules.

Redress (Block 5):

SIFA 4.3.10G

Block 5 contains the Dispute resolution (DISP), Compensation (COMP) and Complaints against the FSA (COAF) sourcebooks. Chapter 1 of DISP sets out requirements for a firm's complaint-handling procedures.

Specialist sourcebooks (Block 6):

SIFA 4.3.11G

Block 6 contains specialist sourcebooks, which show how the Handbook applies to certain sectors, such as collective investment schemes and credit unions. These are unlikely to be relevant to most smaller investment intermediaries, but the sourcebook for Professional Firms (PROF) may be of interest. Professional firms means firms of solicitors, accountants and actuaries.

Listing, Prospectus and Disclosure Rules (Block 7):

SIFA 4.3.12G

Block 7 contains the Listing Rules (LR), Prospectus Rules (PR) and Disclosure Rules (DR). These modules set out the requirements for issuers listed on, or seeking admission to, the Official List of the UKLA, along with the prospectus and disclosure document requirements.

Special guides:

SIFA 4.3.13G

Special guides include documents such as this one. Special guides contain information aimed at helping a class or type of firm to meet their regulatory responsibilities. Small mortgage and insurance intermediaries will find the following useful:

'MIGI' - General rules

http://fsahandbook.info/FSA/html/handbook/MIGI

'MOGI' Mortgage intermediaries (additional rules)

http://fsahandbook.info/FSA/html/handbook/MOGI

and 'GIGI' - Insurance Intermediaries (additional rules)

http://fsahandbook.info/FSA/html/handbook/GIGI.