SUP 10.10 Customer functions
SUP 10.10 (Customer function)3 applies with respect to activities carried on from an establishment maintained by the firm (or by its appointed representative) in the United Kingdom.
3Without SUP 10.10.1 R the description of the customer function3 would extend to this function wherever it was3 performed. The effect of SUP 10.10.1 R is that the description is3limited, in relation to regulated activities with an overseas element, in a manner which is broadly consistent with the scope of conduct of business regulation.
333The customer functions has3to do with giving advice on, dealing and arranging deals in and managing investments; it has3no application to banking business such as deposit taking and lending, nor to general insurance business.
33The customer conditions (the second and third conditions)
SUP 10.10.4 R gives effect to sub-sections (6) and (7) of section 59 of the Act (referred to in that section as the second and third conditions).
3The FSA interprets the phrase "dealing with" as including having contact with customers and extending beyond "dealing" as used in the phrase "dealing in investments". "Dealing in" is used in Schedule 2 to the Act to describe in general terms the regulated activities which are specified in Part II of the Regulated Activities Order.
[deleted]3
Customer function (CF 30)
3The customer function is the function of:
- (1)
advising on investments other than a non-investment insurance contract (but not where this is advising on investments in the course of carrying on the activity of5 giving basic advice on a stakeholder product5) and performing other functions related to this such as dealing and arranging;
- (2)
giving advice to clients solely in connection with corporate finance business and performing other functions related to this;
- (3)
giving advice or performing related activities in connection with pension transfers or opt-outs for retail clients;
- (4)
giving advice to a person to become, or continue or cease to be, a member of a particular Lloyd's syndicate;
- (5)
dealing, as principal or as agent, and arranging (bringing about) deals in investments other than a non-investment insurance contract with or for, or in connection with customers9 where the dealing or arranging deals is governed by 5COBS 115 (Dealing and managing);
9 - (6)
acting in the capacity of an investment manager and carrying on functions connected to this;8
8 - (7)
in relation to bidding in emissions auctions, acting as a 'bidder's representative' within the meaning of subparagraph 3 of article 6(3) of the auction regulation.8
3The customer function does not extend to an individual who is performing the functions in SUP 10.10.7A R (1) to (2) or SUP 10.10.7A R (5) to (7)8and who is based overseas and who, in a 12 month period, spends no more than 30 days in the United Kingdom to the extent that he is appropriately supervised by a person approved for this function.
83The FSA would expect an individual from overseas to be accompanied on a visit to a customer. TC 2.1.9 R (2)4 provides that the firm will have to be satisfied that the individual has at least three years' up-to-date relevant experience obtained outside the United Kingdom. However, the remaining provisions of TC 2.1.9 R (2)4 are disapplied in these circumstances (except for an individual who gives advice to retail clients on retail investment products7 or is a broker fund adviser). The effect of this is that such individuals need not attain6 the relevant regulatory module of an appropriate qualification6 (see TC 2.1.9 R (2)4).
7663The customer function in SUP 10.10.7A R (5) does not extend to the individual who, on the instructions of the customer, simply inputs the customer's instructions into an automatic execution system where no discretion is or may be exercised by the individual performing the activity. Nor does it extend to merely introducing a customer to a firm or distributing advertisements.
3An individual may advise on investments prior to being assessed as competent in accordance with the rules in the Senior Management Arrangements, Systems and Controls sourcebook (SYSC) and, where relevant, the Training and Competence sourcebook (TC). The firm shall record when that person subsequently becomes competent.4
[deleted]3
[deleted]3
[deleted]3