SUP 10.1 Application

This chapter applies to every firm.

This chapter does not apply to an overseas firm in relation to regulated activities which are carried on in the United Kingdom other than from an establishment maintained by it or its appointed representative in the United Kingdom.

Only the following controlled functions apply to an overseas firm which maintains an establishment in the United Kingdom from which regulated activities are carried on:

1. (1)

   the director function where the person performing that function:12

   12
   1. (a)

      has responsibility for the regulated activities of a UK branch which are likely to enable him to exercise significant influence over that branch; or12

   2. (b)

      is someone whose decisions or actions are regularly taken into account by the governing body of that branch.1215

2. (2)

   the non-executive director function where the person performing that function: 12

   12
   1. (a)

      has responsibility for the regulated activities of a UK branch which is likely to enable him to exercise significant influence over that branch; or

   2. (b)

      is someone whose decisions or actions are regularly taken into account by the governing body of that branch.12

3. (3)

   the chief executive function;12

4. (4)

   the required functions;12

   9
5. (5)

   the systems and controls function;12

   71212
6. (6)

   the significant management function in so far as the function relates to:12

   1. (a)

      designated investment business other than dealing in investments as principal, disregarding article 15 of the Regulated Activities Order; or

   2. (b)

      processing confirmations, payments, settlements, insurance claims, client money and similar matters in so far as this relates to designated investment business; and

7. (7)

   the customer function.12

This chapter does not apply to:

1. (1)

   an incoming EEA firm; or

2. (2)

   an incoming Treaty firm; or

3. (3)

   a UCITS qualifier;

if and in so far as the question of whether a person is fit and proper to perform a particular function in relation to that firm is reserved, under any of the Single Market Directives, the Treaty, the UCITS Directive or the auction regulation16 to an authority in a country or territory outside the United Kingdom.

Only the following controlled functions apply to an incoming EEA firm with respect to its passported activities carried on from a branch in the United Kingdom:

1. (1)

   [deleted]10

   10
2. (2)

   [deleted]10

   10
3. (3)

   the money laundering reporting function;

4. (4)

   the significant management function in so far as the function relates to:9

   9
   1. (a)

      designated investment business other than dealing in investments as principal, disregarding article 15 of the Regulated Activities Order; or9

   2. (b)

      processing confirmations, payments, settlements, insurance claims, client money and similar matters in so far as this relates to designated investment business; or149

      14
   3. (c)

      14the activity of accepting deposits from banking customers and activities substantially connected to that activity to the extent that it does not fall within (a) or (b); and

5. (5)

   [deleted]9

   9
6. (6)

   the customer function other than where this relates to the function in SUP 10.10.7A R (4)7 and (7).16

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13If an incoming EEA firm is an EEA pure reinsurer then SUP 10.1.13 R does not apply.

In relation to the activities of a firm for which it has a top-up permission, only the following controlled functions apply:

1. (1)

   the required functions, other than the apportionment and oversight function and the compliance oversight function;10

2. (2)

   the significant management function in so far as it relates to:9

   9
   1. (a)

      designated investment business other than dealing in investments as principal, disregarding article 15 of the Regulated Activities Order; or9

   2. (b)

      processing confirmations, payments, settlements, insurance claims, client money and similar matters in so far as this relates to designated investment business; or149

      14
   3. (c)

      14the activity of accepting deposits from banking customers and activities substantially connected to that activity to the extent that it does not fall within (a) or (b); and

3. (3)

   [deleted]9

   9
4. (4)

   the customer function.7

   7

The descriptions of the following controlled functions9apply to an appointed representative of a firm, except an introducer appointed representative, as they apply to a firm:

1. (1)

   the governing functions, subject to SUP 10.1.16A R and except for a tied agent of an EEA MiFID investment firm8; and

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2. (2)

   the customer function7 other than in relation to acting in the capacity of an investment manager (see SUP 10.10.7A R (6)).715

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1. (1)

   5SUP 10.1.16 R is modified in relation to an appointed representative meeting the conditions in (2) so that only one of the following governing functions:

   1. (a)

      director function; or

   2. (b)

      chief executive function; or

   3. (c)

      partner function; or

   4. (d)

      director of unincorporated association function;

   applies, as appropriate, to an individual within that appointed representative who will be required to be an approved person.

2. (2)

   The conditions are that:

   1. (a)

      the scope of appointment of the appointed representative includes insurance mediation activity in relation to non-investment insurance contracts but no other regulated activity, and

   2. (b)

      the principal purpose of the appointed representative is to carry on activities other than regulated activities.

1. (1)

   This chapter, except in respect of the required functions, does not apply to an authorised professional firm respect of its non-mainstream regulated activities, subject to (2).11

2. (2)

   Where the authorised professional firm has appointed approved persons to perform the governing functions with equivalent responsibilities for the firm's non-mainstream regulated activities and other regulated activities, for the firm's non-mainstream regulated activities this chapter applies with respect to the governing functions and the required functions (other than the apportionment and oversight function) only.11

The descriptions of significant influence functions, other than the required functions, and if the firm is a MiFID investment firm, the governing functions, 9do not extend to activities carried on by a firm whose principal purpose is to carry on activities other than regulated activities and which is:

1. (1)

   an oil market participant; or

2. (2)

   a service company; or

3. (3)

   an energy market participant; or 5

4. (4)

   a wholly owned subsidiary of:5

   1. (a)

      a local authority; or5

   2. (b)

      a registered social landlord; or5

5. (5)

   a firm with permission to carry on insurance mediation activity in relation to non-investment insurance contracts but no other regulated activity.52

1. (1)

   For the purpose of SUP 10.6.4 R (the director function), "director" includes an executive member of a committee to which the Council of the Society of Lloyd's directly delegates authority to carry out the Society's regulatory functions.

   3
2. (2)

   For the purpose of SUP 10.6.8 R (the non-executive director function), "non-executive director" includes a non-executive member of a committee to which the Council of the Society of Lloyd's directly delegates authority to carry out the Society's regulatory functions.

This chapter does not apply to a function performed by:

1. (1)

   a person acting as an insolvency practitioner within the meaning of section 388 of the Insolvency Act 1986; or

2. (2)

   a person acting as a nominee in relation to a voluntary arrangement under Parts I (Company Voluntary Arrangements) and VIII (Individual Voluntary Arrangements) of the Insolvency Act 1986; or

3. (3)

   a person acting as an insolvency practitioner within the meaning of Article 3 of the Insolvency (Northern Ireland) Order 1989; or

4. (4)

   a person acting as a nominee in relation to a voluntary arrangement under Parts II (Company Voluntary Arrangements) and VIII (Individual Voluntary Arrangements) of the Insolvency (Northern Ireland) Order 1989.