This is a Guide for smaller investment intermediaries to highlight which parts of the Handbook will be of most immediate practical significance to them. There will be some variation, as not all firms undertake identical business or have permissions to carry out the same activities.

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.

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.

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

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.

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.

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.

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.

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.

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.

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 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.

Various parts of SUP, DISP and COMP will be relevant to the fees payable by smaller investment intermediaries. However, you will receive the necessary information about this with your invoices. Chapter 18 includes more information on fees.

Every provision in the Handbook must be interpreted with its purpose in mind (GEN 2.2). The purpose of any provision in the Handbook is to be gathered first and foremost from the text of the provision in question and its context among other relevant provisions.

We have prepared a Reader's Guide to help firms navigate the Handbook - you can access it via 'Handbook' on the CD-ROM or by clicking on 'FSA Handbook' on the homepage of our website.

As explained more fully in the Reader's Guide the provisions in the Handbook do not all have the same status. The difference between Rules and Guidance is important. The Rules in the Handbook (marked with an 'R') create binding obligations on firms. If a firm breaches such a rule, it may be subject to enforcement action and in some circumstances to an action for damages.

Guidance in the Handbook (marked with a 'G') is general Guidance given to more than one firm or individual. Guidance is not binding on a firm. But where a firm follows Guidance that indicates a possible way to comply with a rule or recommends a course of action or arrangement, we intend to proceed on the basis that the firm has complied with the relevant Handbook rule. A small firm may find that Guidance is a helpful indication of how compliance with a Rule may be achieved without devising its own approach to that Rule.

There are also Evidential Provisions. These are rules but they are not binding in their own right - they are marked with a status letter 'E' in the margin or header. You can find a more detailed explanation in the Reader's Guide.

We have introduced two types of Handbook provisions where we have 'copied out' material from UK and EU legislation. Where appropriate a UK and EU flag icon will appear against the relevant paragraphs, and the letters 'UK' or 'EU' used in cross-references.

To help readers we have also introduced other informative text within or at the end of relevant paragraphs of the Handbook. These will be identified as 'Notes'. They will not form part of the legislative material and have no legal status.