SUP 13A.3 Qualifications for authorisation under the Act

Section 31 of the Act (Authorised persons) states that an EEA firm is authorised for the purposes of the Act if it qualifies for authorisation under Schedule 3 to the Act (EEA Passport Rights). Under paragraph 12 of Part II of that Schedule, an EEA firm qualifies for authorisation if:

1. (1)

   it is seeking to establish a branch in the United Kingdom in exercise of an EEA right and satisfies the establishment conditions (see SUP 13A.4.1 G and SUP 13A.4.2 G); or

2. (2)

   it is seeking to provide cross border services into the United Kingdom in exercise of an EEA right and satisfies the service conditions (see SUP 13A.5.3 G).

3If an EEA MiFID investment firm seeks to use a tied agent established in the UK, the EEA MiFID investment firm will be treated as if it were seeking to establish a branch and must satisfy the establishment conditions (see SUP 13A.4.1 G).

1. (1)

   On qualifying for authorisation, subject to SUP 13A.3.2G (2), an EEA firm will have permission to carry on each permitted activity (see (3) below) which is a regulated activity.

2. (2)
   1. (a)

      Paragraph (1) does not apply to the activity of dealing in units in a collective investment scheme in the United Kingdom where:

      1. (i)

         the firm is an EEA UCITS management company;

      2. (ii)

         the firm satisfies the establishment conditions in SUP 13A.4.1 G; and

      3. (iii)

         the FSA notifies the EEA firm and the EEA firm's Home State regulator that the way in which it intends to market a relevant scheme in the United Kingdom does not comply with the law in force in the United Kingdom.

   2. (b)

      The FSA's notice under (2)(a)(iii) has to be given to the EEA firm within two months of receiving the consent notice (see paragraph 13(1) of Part II of Schedule 3 to the Act) and will be similar to a warning notice.

   3. (c)

      For details of the FSA's procedures for the giving of warning notices see DEPP 2 (Statutory notices and allocation of decision making).1

3. (3)

   The permitted activities of an EEA firm are those activities identified in the consent notice, regulator's notice or notice of intention. Permitted activities may include activities that are within the scope of a Single Market Directive but which are unregulated activities in the United Kingdom.

4. (4)

   The permission will be treated as being on terms equivalent to those appearing in the consent notice, regulator's notice or notice of intention. For example, it will reflect any limitations or requirements which are included in the firm's Home State authorisation.

An EEA firm which has qualified for authorisation is referred to in the Handbook as an incoming EEA firm.

Under section 31 of the Act, a Treaty firm is authorised for the purposes of the Act if it qualifies for authorisation under Schedule 4 (Treaty Rights), that is:

1. (1)

   the Treaty firm is seeking to carry on a regulated activity; and

2. (2)

   the conditions set out in paragraph 3(1) of Schedule 4 to the Act are satisfied.

On qualifying for authorisation a Treaty firm will have permission to carry on each permitted activity which is a regulated activity. This permission will be treated on the same terms as those which apply to the Treaty firm's Home State authorisation. For example, it will reflect any limitations or requirements which are included in the firm's Home State authorisation.

The effect of paragraph 5(1) and 5(2) of Schedule 4 to the Act is that a Treaty firm which qualifies for authorisation under that Schedule must, at least seven days before it carries on any of the regulated activities covered by its permission, give the FSA written notice of its intention to do so. Failure to do so is a criminal offence under paragraph 6(1) of that Schedule.

The written notice required by paragraph 5(2) of Schedule 4 to the Act should be accompanied by confirmation of the Treaty firm's authorisation from the Home State regulator, as referred to in paragraph 3(2) of Schedule 4 to the Act.

1. (1)

   For further information, a Treaty firm may contact the Authorisation Department:

   1. (a)

      telephone on +4420 7066 3954; or

   2. (b)

      write to: Authorisation Department, The Financial Services Authority, 25 The North Colonnade, Canary Wharf, London, E14 5HS; or

   3. (c)

      email corporate.authorisation@fsa.gov.uk.

1. (1)

   The guidance in PERG 2 is relevant to Treaty firms to help them determine if they require authorisation under the Act.

2. (2)

   A Treaty firm which qualifies for authorisation is referred to in the Handbook as an incoming Treaty firm.

1. (1)

   An EEA firm that is carrying on both direct insurance and reinsurance business will be entitled to passport under Schedule 3 to the Act in relation to the direct insurance business. It will also have a Treaty right under Schedule 4 to the Act. Such EEA firms are advised to discuss their particular circumstances with the Authorisation Department before sending in their notification under paragraph 5(2) of Schedule 4 to the Act (see SUP 13A.3.6 G).

2. (2)

   An insurance company with its head office in an EEA State other than the United Kingdom that is carrying on pure reinsurancebusiness in that State, and which wishes to carry on such business in the United Kingdom, is advised to discuss its particular requirements with the Authorisation Department. It may be entitled to exercise a Treaty right provided it satisfies the conditions in paragraph 3(1) of Schedule 4 to the Act (see SUP 13A.3.4 G). Otherwise, it will have to seek a Part IV permission (see the FSA website "How do I get authorised": http://www.fsa.gov.uk/Pages/Doing/how/index.shtml2).

   2

Under Schedule 5 to the Act (Persons concerned in collective investment schemes), a person who for the time being is an operator, trustee or depositary of a scheme which is a recognised scheme under section 264 of the Act is an authorised person. Such a person is referred to in the Handbook as a UCITS qualifier.

A UCITS qualifier has permission under paragraph 2 of Schedule 5 to the Act, to carry on, as far as is appropriate to the capacity in which it acts in relation to the scheme:

1. (1)

   the regulated activity of establishing, operating or winding up a collective investment scheme; and

2. (2)

   any activity in connection with, or for the purposes of, the scheme.

A UCITS qualifier should refer to COLLG or to the following sections of COLL and CIS for requirements for recognised schemes:

1. (1)

   COLL 9.2.1 G and CIS 16.1.8 G for guidance on notifications;

2. (2)

   COLL 9.2.1 G and CIS 17.2 for guidance on information and documentation requirements; and

3. (3)

   COLL 9.4 and CIS 17.4 which includes guidance on what facilities need to be maintained.