SUP 13A Annex 1 Application of the Handbook to Incoming EEA Firms

1. The table below summarises the application of the Handbook to an incoming EEA firm. Where the table indicates that a particular module of the Handbook may apply, its application in relation to any particular activity is dependent on the detailed application provisions in that module. The table does not apply to incoming ECA providers. These should refer to COBS 1 Annex 1 Part 3 section 710 for guidance on howCOBS10 applies to them. The table does not apply to EEA pure reinsurers as these firms have automatic passport rights on the basis of their Home State authorisation.19

2. In some cases, the application of the Handbook depends on whether responsibility for a matter is reserved under an EU17 instrument to the incoming EEA firm's Home State regulator. Guidance on the reservation of responsibility is contained inSUP 13A Annex 2 10 (Matters reserved to a Home State regulator). Guidance on the territorial application of MiFID is contained in PERG 13.6 and PERG 13.7 and SUP 13A Annex 2.10

3. For an incoming EEA firm which has permission for cross-border services only, many parts of the Handbook apply only if the firm carries on regulated activities in the United Kingdom. Those parts of the Handbook will therefore not apply if the firm confines its activities to those within the overseas persons exclusions in article 72 of the Regulated Activities Order, or which would not be regarded as carried on in the United Kingdom. Further guidance may be found in PERG 2.4 (Link between activities and the United Kingdom) and PERG 2.9.15 G to PERG 2.9.17 G (Overseas persons).

(1) Module of Handbook

(2) Potential application to an incoming EEA firm with respect to activities carried on from an establishment of the firm (or its appointed representative) in the United Kingdom

(3) Potential application to an incoming EEA firm with respect to activities carried on other than from an establishment of the firm (or its appointed representative) in the United Kingdom

PRIN

The Principles apply only in so far as responsibility for the matter in question is not reserved by an EU17 instrument to the firm's Home State regulator (PRIN 3.1.1 R (1)).

For an incoming EEA firm which is a BCD credit institution without a top-up permission, Principle 4 applies only in relation to the liquidity of a branch established in the United Kingdom (PRIN 3.1.1 R (2)).

The Principles do not apply if the firm has permission only for cross-border services and does not carry on regulated activities in the United Kingdom (PRIN 3.1.1 R (2)).

The Principles have limited application for activities which are not carried on from a UK establishment (see PRIN 3.1.1 R).

Otherwise, see column (2).

SYSC

SYSC 1 and SYSC 1 Annex 1 (Application of SYSC 2 and SYSC 3) contain 13application provisions only. SYSC 2 and SYSC 3 apply only to an insurer, a managing agent and the Society13as set out in SYSC 1 Annex 1.1.1R , which include the following exceptions:13

(1) SYSC 2.1.1 R (1) and SYSC 2.1.2 G do not apply;

(2) SYSC 2.1.3 R to SYSC 2.2.3 G apply, but only in relation to allocation of the function in SYSC 2.1.3 R (2) and only in so far as responsibility for the matter in question is not reserved by an EU17 instrument to the firm's Home State regulator; and

(3) SYSC 3 applies, but only in so far as responsibility for the matter in question is not reserved by an EU17 instrument to the firm's Home State regulator. SYSC 1.1.7 R (Where?) further restricts the territorial application of SYSC 1 to SYSC 3 for an incoming EEA firm. Further guidance is contained in SYSC 2.1.6 G, Question 12. SYSC 18 410applies to the extent that the Public Interest Disclosure Act 1998 applies to the firm.

The common platform requirements in SYSC 4 - 10 apply as set out in Part 2 of SYSC 1 Annex 1 (Application of the common platform requirement).13

SYSC 1 Annex 1.2.7G reminds 13 EEA MiFID investment firms that they 13must comply with the common platform record-keeping requirements in relation to a branch in the United Kingdom.

SYSC 1 Annex 1, Part 2, 2.7AG provides guidance on the application of the common platform requirements to the UK branch of an EEA UCITS management company.22

SYSC 9 applies to activities carried on from an establishment in the United Kingdom, unless another applicable rule which is relevant to the activity has a wider territorial scope, in which case the common platform record-keeping requirements apply with that wider scope in relation to the activity described in that rule (SYSC 1 Annex 1.2.17R).13

SYSC 12 does not apply (SYSC 12.1.3 R).

SYSC 13 does not apply (SYSC 13.1.1 G).

SYSC 14 does not apply (SYSC 14.1.1 R).

SYSC 15 does not apply (SYSC 15.1.1 G).

SYSC 16 does not apply (SYSC 16.1.1 G).

SYSC 17 does not apply (SYSC 17.1.1 G).

SYSC 18 applies.10

SYSC 19A20 does not apply.16

SYSC 2 and13 SYSC 3 do not apply if the firm has permission only for cross-border services and does not carry on regulated activities in the United Kingdom (SYSC 1 Annex 1.1.1 R). 13SYSC 2 and13 SYSC 3 have limited application for activities which are not carried on from a UK establishment (see SYSC 1 Annex 1.1.1 R (2A)).13

Otherwise, see column (2).

The common platform requirements in SYSC 4 - SYSC 10 apply as set out in SYSC 1 Annex 1.2.2R.13

SYSC 11 - SYSC 17 do not apply.

SYSC 18 applies.

SYSC 19A20 does not apply.16

COND

COND does not apply if the firm does not have, or apply for, a top-up permission.

Otherwise, only threshold conditions 1, 3, 4 and 5 apply and only in so far as relevant to:

(1) an application for a top-up permission under Part IV of the Act (that is, a permission to carry on regulated activities in addition to those permitted through its authorisation under Schedule 3 to the Act (EEA Passport Rights)); and

(2) the exercise of the FSA's own-initiative power in relation to the top-up permission. (COND 1.1.1 G.)

As column (2).

APER

APER applies to approved persons (APER 1.1.1 G). See below under SUP 10 as to whether controlled functions are performed, and approval therefore required.

Not relevant because SUP 10 does not apply.

FIT

FIT applies to a firm wishing to establish a branch in the United Kingdom or to apply for a top-up permission in respect of any application that it makes for the approval of a person to perform a controlled function (FIT 1.1). See under SUP 10 below as to whether such approval is required.

FIT applies in a limited way in relation to an incoming MiFID investment firm (see FIT 1.2.4A G). 10

Does not apply.

GEN

GEN applies (GEN 1.1, GEN 2.1,GEN 3.1, GEN 4.1, GEN 5.1 and GEN 6.1). However, (a) GEN 4 does not apply to the extent that the firm is subject to equivalent rules imposed by its Home State (GEN 4.1.1 R (3)), and (b) GEN 6 only applies to business that can be regulated under section 138 of the Act (General rule-making power). It does not therefore apply if, or to the extent that, responsibility has been reserved to an incoming firm's Home State regulator by an EU17 instrument. Only GEN 4.5 applies14 in relation to MiFID or equivalent third country business (see GEN 4.1.1 R).10

GEN 4 does not apply if the firm has permission only for cross-border services and does not carry on regulated activities in the United Kingdom (see GEN 4.1.1 R).12

The general licence to use or reproduce the FSA logo in GEN 5 Annex 1 G does not apply (see 3.1(1) of GEN 5 Annex 1 G). 12

Otherwise, as column

(2).

5GENPRU

Does not apply.18

Does not apply if the firm has permission only for cross border services and does not carry on regulated activities in the United Kingdom.

5BIPRU

EEA firms are subject to the prudential standards of their home state regulator (BIPRU 1.1.7 R and BIPRU 1.1.9 G). However, BIPRU 12 applies to an EEA firm as respects the activities of its UK branch, but in relation to liquidity risk only.18

Does not apply if the firm has permission only for cross border services and does not carry on regulated activities in the United Kingdom.

MIPRU5

MIPRU 1 (Application and general provisions) does not apply unless the firm has a top-up permission.5

MIPRU 25 (Responsibility for insurance mediation activity) does not apply unless the firm has a top-up permission.

MIPRU 3 (Requirement to hold professional indemnity insurance)5 does not apply unless the firm has a top-up permission.

MIPRU 4 (Requirement to hold capital resources)5 does not apply unless the firm has a top-up permission.

See MIPRU 4.1.2 G5 for more detailed guidance.

MIPRU 55 (Insurance undertakings and mortgage lenders using insurance or mortgage mediation services) does not apply unless the firm has a top-up permission.

As column (2)

5INSPRU

INSPRU does not apply unless the firm is an insurer to which INSPRU 1.5.33R applies.

IPRU(BANK)

Only the following apply, and only if the firm is a credit institution (IPRU(BANK) 3.2.1R):

(1) IPRU(BANK) 3.5.1R; and

(2) IPRU(BANK) chapters LM and LS.5

Does not apply. But if the firm is a credit institution whose notification to the FSA of its intention to provide services in the United Kingdom covers services provided through a branch, see column (2).

IPRU(BSOC)

Does not apply because an incoming EEA firm cannot be a building society (IPRU(BSOC) X.2.1R).

Does not apply because an incoming EEA firm cannot be a building society (IPRU(BSOC) X.2.1R).

IPRU(FSOC)

Does not apply because an incoming EEA firm cannot be a friendly society (IPRU(FSOC) 1.1).

Does not apply because an incoming EEA firm cannot be a friendly society (IPRU(FSOC) 1.1).

IPRU(INS)

[deleted]9

[deleted]9

IPRU(INV)

IPRU(INV) does not apply unless the firm:

(1) has a top-up permission;

(2) is an authorised professional firm, investment management firm, members' adviser, personal investment firm, securities and futures firm, service company or underwriting agent; and

(3) is not a lead regulated firm, a media firm or a BIPRU investment firm.5

(IPRU(INV) 1.1.1R and 1.2R)

As column (2).10

10COBS

Guidance on the territorial application of COBS is contained in COBS 1 Annex 1 Part 3.

Guidance on the territorial application of COBS is contained in COBS 1 Annex 1 Part 3.11

11ICOBS

ICOBS applies except to the extent necessary to be compatible with European law. Guidance on the territorial application of ICOBS is contained in ICOBS 1 Annex 1 Part 4.21

ICOBS 8.4 applies except to the extent necessary to be compatible with European law. Other chapters of21 ICOBS do21 not apply, except to the extent necessary to be compatible with European law. Guidance on the territorial application of ICOBS is contained in ICOBS 1 Annex 1 Part 4.21

MCOB

Applies where the activity is carried on with or for a customer resident in the United Kingdom or another EEA State at the time that the activity is carried on, but see the territorial scope in MCOB 3.3 (Application: where?).

Applies where the activity is carried on with or for a customer resident in the United Kingdom at the time that the activity is carried on but see MCOB 1.3.4 R (Distance contracts entered into from an establishment in another EEA State) and MCOB 3.3 (Application: where?).

CASS

CASS does not apply with respect to the firm's passported activities unless the firm is an insurer (CASS 1.2.3 R (2)).

As column (2).

MAR

MAR 1 (Code of market conduct)

Applies if the firm is seeking guidance as to whether or not behaviour amounts to market abuse (MAR 1.1.1 G).

MAR 1 (Code of market conduct)

As column (2).

MAR 2 (Price stabilising rules)

Applies if the firm undertakes stabilising action and wishes to show that it has acted in conformity with price stabilising rules, or that its behaviour conforms with rules in accordance with section 118A(5)(a) of the Act (Market abuse) (MAR 2.1 Application).

MAR 2 (Price stabilising rules)

Only applies in so far as the firm undertakes stabilising action and wishes to rely on a defence that it has acted in conformity with price stabilising rules, or that its behaviour conforms with rules in accordance with section 118A(5)(a) of the Act (Market abuse) (MAR 2.1 and in particular MAR 2.1.3 R).

[deleted]10

[deleted]10

MAR 4 (Endorsement of the Take-over Code)

Applies to firms whose permission includes, or ought to include, any designated investment business, except as set out in MAR 4.4.1 R.

MAR 4 (Endorsement of the Take-over Code)

Does not apply (MAR 4.4.1 R (4)(b)).

MAR 5 (Multilateral Trading Facilities6)

Does not apply (MAR 5.1.1 R).

MAR 5 (Multilateral Trading Facilities)6

Does not apply (MAR 5.1.1 R).

TC

TC applies, but only in so far as responsibility for any matter it covers is not reserved by an EU17 instrument to the firm's Home State regulator.

TC Appendix 1 sets out the activities to which TC applies.7

TC Appendix 2 sets out the sourcebook's territorial scope.7

TC Appendix 3 sets out the limitations on TC App 2.7

SUP

SUP 1 (The FSA's approach to supervision)

Applies, but contains only guidance.

SUP 1 (The FSA's approach to supervision)

As column (2).

SUP 2 (Information gathering by the FSA on its own initiative)

The application of this chapter is the same as for Principle 11 (see under PRIN above).

SUP 2 (Information gathering by the FSA on its own initiative).

As column (2)

SUP 3 (Auditors)

Applies to the firm (and its auditor) only if the firm has a top-up permission.

SUP 3 (Auditors)

As column (2)

SUP 4 (Actuaries)

Does not apply.

SUP 4 (Actuaries)

Does not apply.

SUP 5 (Skilled persons)

Applies only if the firm is required by the FSA to provide a report under section 166 of the Act (Reports by skilled persons).

SUP 5 (Skilled persons)

As column (2).

SUP 6 (Applications to vary and cancel Part IV permission)

Applies only if the firm has a top-up permission

SUP 6 (Applications to vary and cancel Part IV permission)

As column (2).

SUP 7 (Individual requirements)

Applies only if the firm has a top-up permission. It contains only guidance on the exercise of the FSA's own-initiative power to vary that permission. The FSA has similar, but more limited, powers of intervention under Part XIII of the Act in relation to the permission of the firm under Schedule 3 to the Act (see ENF 4).

SUP 7 (Individual requirements)

As column (2).

SUP 8 (Waiver and modification of rules)

Applies only if the firm wishes to apply for, or consent to, or has been given, a waiver of the FSA's rules (SUP 8.1.1 R).

SUP 8 (Waiver and modification of rules)

As column (2).

SUP 9 (Individual guidance)

Applies only if the firm wishes to obtain individual guidance from the FSA or if the FSA gives the firm individual guidance on its own initiative (SUP 9.1.1 G).

SUP 9 (Individual guidance)

As column (2).

SUP 10 (Approved persons)

Applies, but the applicable controlled functions are limited. See SUP 10.1 (Application) for more detailed guidance.

SUP 10 (Approved persons)

Does not

apply (SUP 10.1.6 R).

SUP 11 (Controllers and close links)

Does not apply (SUP 11.1.1 R (2)).

SUP 11 (Controllers and close links)

Does not apply (SUP 11.1.1 R (2)).

SUP 12 (Appointed representatives)

Applies only if the firm has permission to carry on designated investment business, insurance mediation activity or mortgage mediation activity and wishes to appoint, or has appointed, an appointed representative (SUP 12.1.1 R (1)).

SUP 12 (Appointed representatives)

As column (2).

SUP 13 (Exercise of passport rights by UK firms)

Does not apply.

SUP 13 (Exercise of passport rights by UK firms)

Does not apply.

SUP 13A (Qualifying for authorisation under the Act)

SUP 13A applies to the firm if it:

(1) is considering carrying on activities in the United Kingdom which may fall within the scope of the Act and is seeking guidance on whether it needs a top-up permission; or

(2) is, or is considering, applying to the FSA to carry on regulated activities in the United Kingdom under a top-up permission; or

(3) is, or is considering, establishing a branch or providing cross-border services into the United Kingdom using EEA rights.

SUP 13A (Qualifying for authorisation under the Act)

As column (2).

SUP 14 (Incoming EEA Firms: Changing detail and cancelling qualifications for authorisation)

Applies.

SUP 14 (Incoming EEA Firms: Changing detail and cancelling qualifications for authorisation)

Applies.

SUP 15 (Notifications to the FSA)

Applies in full if the firm has a top-up permission. Otherwise, the application is modified as set out in SUP 15 Annex 1.

SUP 15 (Notifications to the FSA)

Does not apply if the firm has permission only for cross border services and does not carry on regulated activities in the United Kingdom (SUP 15 Annex 1).

Otherwise, as column (2).

SUP 16 (Reporting requirements)

Parts of this chapter may apply if the firm has a top-up permission or if the firm is:

(a) a bank; or

(b) a depositary of an ICVC; or

(c) an OPS firm; or

(d) a trustee of an AUT; or

(e) an insurer with permission to effect or carry out life policies; or

(f) a firm with permission to establish, operate or wind up a personal pension scheme or a stakeholder pension scheme;2 or

(g) a firm with permission to advise on investments, arrange (bring about) deals in investments, make arrangements with a view to transactions in investments, or arrange safeguarding and administration of assets.

(SUP 16.1)

SUP 16 (Reporting requirements)

Parts of this chapter may apply if the firm has a top-up permission or if the firm is:

(a) a depositary of an ICVC; or

(b) an OPS firm; or

(c) a trustee of an AUT; or

(d) an insurer with permission to effect or carry out life policies; or

(e) a firm with permission to establish, operate or wind up a personal pension scheme or a stakeholder pension scheme;2 or

(f) a firm with permission to advise on investments, arrange (bring about) deals in investments, make arrangements with a view to transactions in investments, or arrange safeguarding and administration of assets.

(SUP 16.1)

SUP 17 (Transaction reporting)

Applies to UK branches of incoming EEA firms which are MiFID investment firms in respect of reportable transactions executed in the course of services provided, whether within in the United Kingdom and outside. (SUP 17.1.2 G and SUP 17.1.3A G)10

SUP 17 (Transaction reporting)

Applies as appropriate to incoming EEA firms which are MiFID investment firms in respect of reportable transactions. (SUP 17.1.1 R and SUP 17.1.4 R).10

SUP 18 (Transfers of business)

SUP 18.4 does not apply. SUP 18.1, SUP 18.2 and SUP 18.3 may be relevant if the firm proposes to transfer the whole or part of its business by an insurance business transfer scheme or to accept such a transfer or proposes to accept certain transfers of insurance business taking place outside the United Kingdom.

SUP 18 (Transfers of business)

As column (2).

SUP 20 (Fees Rules)

Applies (SUP 20.1.1 R) but modified (SUP 20.4.7 G to SUP 20.4.10 R).

SUP 20 (Fees Rules)

As column (2).

SUP App 1 (Prudential categories)

Applies and provides guidance on the prudential categories used in the Handbook.

SUP App 1 (Prudential categories)

As column (2).

SUP App 2 (Insurers: Scheme of operations)

Does not apply (SUP App 2.1.1 R).

SUP App 2 (Insurers: Scheme of operations)

Does not apply (SUP App 2.1.1 R).8

DEPP8

DEPP applies and contains a description of the FSA's procedures for taking statutory notice decisions, the FSA's policy on the imposition and amount of penalties and the conduct of interviews to which a direction under section 169(7) of the Act has been given or the FSA is considering giving.8

DEPP applies and contains a description of the FSA's procedures for taking statutory notice decisions, the FSA's policy on the imposition and amount of penalties and the conduct of interviews to which a direction under section 169(7) of the Acthas been given or the FSA is considering giving.8

DISP

Applies (DISP 1.1.1 G) and appliesbut in a limited way in relation to MiFID business10.

Does not apply (DISP 1.1.1 G).

COMP

Applies, except in relation to the passported activities of an MiFID investment firm10 or a BCD credit institution (see the definition of "participant firm") other than an electronic money institution within the meaning of article 1(3)(a) of the E-Money Directive that has the right to benefit from the mutual recognition arrangements under the Banking Consolidation Directive. However, an MiFID investment firm 10or BCD credit institution may be able to apply for top-up cover in relation to its passported activities (see COMP 14 (Participation by EEA Firms)).

Does not apply in relation to the passported activities of an MiFID investment firm10 ora BCD credit institution (see the definition of "participant firm"). Otherwise, COMP may apply, but the coverage of the compensation scheme is limited for non-UK activities (see COMP 5).

COAF

Applies if the firm wishes to bring a complaint under the complaints scheme, provided the complaint meets the requirements of the complaints scheme (COAF 1.2).

As column (2).

COLL

The following provisions of COLL apply to an EEA UCITS management company providing collective portfolio management services for a UCITS scheme:

(a) COLL 6.6A.2 R (Duties of AFMs of UCITS schemes and EEA UCITS schemes to act in the best interests of the scheme and its Unitholders);

(b) COLL 6.6A.4 R (Due diligence requirements of AFMs of UCITS schemes and EEA UCITS schemes);

(c) COLL 6.6A.5 R (Compliance with the regulatory requirements applicable to the conduct of business activities of a UCITS management company);

(d) COLL 12.3.4 R (Provision of documentation to the FSA: EEA UCITS management companies);

(e) the fund application rules (see COLL 12.3.5 R (COLL fund rules under the management company passport: the fund application rules);

(f) COLL 12.3.6 R (Requirement to make information available to the public or the FSA);

(g) COLL 12.3.7 G (EEA UCITS management companies: compliance with FSA rules); and

(h) COLL 12.3.8 G (EEA UCITS management companies: conduct of business rules).

An EEA UCITS management company providing collective portfolio management services for a UCITS scheme should be aware that it will be expected to comply with the above rules in relation to all aspects of the functioning of the relevant UCITS scheme where, for example, the firm:22

(a) [deleted]22

(b) wishes to apply for an authorisation order to establish an AUT or ICVCas a UCITS scheme;22 or

(ba) is the management company of a UCITS scheme that wishes to exercise an EEA right to market its units in another EEA State; or22

(c) is the operator of a recognised scheme.22

As column (2)(d), (e), (f) and (g) and the other parts of COLL specified.22

CRED

Does not apply.

Does not apply.

[deleted]10

[deleted]10

[deleted]1023

PROF

PROF applies only if the firm is an authorised professional firm.

As column (2).

REC

Does not apply.

Does not apply.

LR

LR (Listing Rules)

May apply if the firm is applying for listing in the United Kingdom, is a listed issuer in the United Kingdom, is a sponsor or is applying for approval as a sponsor.

LR (Listing Rules)

As column (2).

PR

PR (Prospectus Rules)

May apply if the firm makes an offer of transferable securities to the public in the United Kingdom or is seeking the admission to trading of transferable securities on a regulated market situated or operating in the United Kingdom.

PR (Prospectus Rules)

As column (2).

DTR

DTR (Disclosure Rules and Transparency Rules)

May apply if the firm is an issuer, any class of whose financial instruments have been admitted to trading on a regulated market, or are the subject of an application for admission to trading on a regulated market, other than issuers who have not requested or approved admission of their financial instruments to trading on a regulated market.

DTR (Disclosure Rules and Transparency Rules)

As column (2).

8EG describes the FSA's approach to exercising the main enforcement powers given to it by FSMA and by regulation 12 of the Unfair Terms Regulations. EG is a Regulatory Guide and as such does not form part of the Handbook.