SUP 10A.1 Application

21This chapter applies to every:5

1. (1)

   firm that is not an SMCR firm13; and5

2. (2)

   SMCR firm13, but only to the extent required by SUP 10A.1.16BR (Appointed representatives).5

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 FCA 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:

   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; or

   2. (b)

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

2. (2)

   the non-executive director function where the person performing one of those functions:

   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;

3. (3)

   the chief executive function;

4. (4)

   the FCA required functions;

5. (5)

   the systems and controls function;

6. (6)

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

   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.

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, the auction regulation or the benchmarks regulation12, to an authority in a country or territory outside the United Kingdom.

Only the following FCA 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)

   the money laundering reporting function;

2. (2)

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

   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 money6 and similar matters, in so far as this relates to designated investment business; and6

   3. (c)

      [deleted]6

3. (3)

   the customer function other than where this relates to the function in SUP 10A.10.7R (4) and (7).

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

1. (1)

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

2. (2)

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

   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; and6

   3. (c)

      [deleted]6

3. (3)

   the customer function.

A person does not perform the significant management function for a firm under SUP 10A.1.11 R or SUP 10A.1.13 R if that person would not have been treated as performing any FCA controlled function for that firm if that firm had been a UK firm.

The descriptions of the following FCA controlled functions apply to an appointed representative of a firm, except in relation to CBTL business or 4an introducer appointed representative, as they apply to an FCA-authorised person:

1. (1)

   the FCA governing functions, subject to SUP 10A.1.16 R and except for a tied agent of an EEA MiFID investment firm; and

2. (2)

   the customer function other than in relation to acting in the capacity of an investment manager (see SUP 10A.10.7R (6)).

1. (1)

   SUP 10A.1.15 R is modified in relation to an appointed representative meeting the conditions in (2) so that only one of the following FCA 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 FCA-approved person.

2. (2)

   The conditions are that:

   1. (a)

      the scope of appointment of the appointed representative includes insurance distribution activity11 in relation to non-investment insurance contracts or credit-related regulated activity3, but no other regulated activity; and

   2. (b)

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

3This chapter applies to an appointed representative that has a limited permission to carry on a regulated activity prescribed for the purposes of section 39(1E)(a) of the Act as follows:

1. (1)

   FCA controlled functions apply to the appointed representative as set out in SUP 10A.1.15 R and SUP 10A.1.16 R in relation to the carrying on of the regulated activity, for which it does not have permission, comprised in the business for which its principal has accepted responsibility;

2. (2)
   1. (a)

      unless it is a not-for-profit debt advice body, the apportionment and oversight function applies in relation to the carrying on of the regulated activity for which it has limited permission;

   2. (b)

      if it is a not-for-profit debt advice body and a CASS large debt management firm, the CASS operational oversight function applies in relation to the carrying on of debt management activity.

5SUP 10A.1.15R and SUP 10A.1.16R apply to the appointed representative of an SMCR firm13.

1. (1)

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

2. (2)

   Where the authorised professional firm has appointed FCA-approved persons to perform the FCA 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 FCA governing functions and the FCA required functions (other than the apportionment and oversight function) only.

The descriptions of FCA significant-influence functions, other than the FCA required functions, and, if the firm is a MiFID investment firm, the FCA governing functions do 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

4. (4)

   a wholly owned subsidiary of:

   1. (a)

      a local authority; or

   2. (b)

      a registered social landlord; or

5. (5)

   a firm with permission to carry on insurance distribution activity11 in relation to non-investment insurance contracts but no other regulated activity (except advising on P2P agreements)7.

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.

1. (1)

   3Subject to (2) and (3), this chapter, except in respect of the apportionment and oversight function, does not apply to a firm that has limited permission in relation to the carrying on of the relevant credit activity (as defined in paragraph 2G of Schedule 6 to the Act) for which it has limited permission.

2. (2)

   Subject to (3), this chapter does not apply to a not-for-profit debt advice body.

3. (3)

   This chapter applies to a not-for-profit debt advice body that is a CASS large debt management firm with respect to the CASS operational oversight function only.