SUP 15.13 1Notification by CBTL firms

This section sets out guidance for CBTL firms to assist them in complying with their obligation to notify the FCA immediately if they cease to satisfy any condition for registration in article 8(2) or 8(3) of the MCD Order.

The nature of a CBTL firm's obligation under article 12 of the MCD Order will depend on whether the CBTL firm has a Part 4A permission to carry on one or more regulated activities.

The circumstances in which a CBTL firm which has a Part 4A permission should notify the FCA include but are not limited to when:

1. (1)

   it ceases to carry on CBTL business and does not propose to resume carrying on CBTL business in the immediate future. This does not include circumstances where the CBTL firm temporarily withdraws its products from the market or is preparing to launch fresh products; or

2. (2)

   it applies to cancel its Part 4A permission; or

3. (3)

   it applies to vary its Part 4A permission so that once the variation takes effect it will cease to hold any Part 4A permission; or

4. (4)

   it receives a final notice to cancel its Part 4A permission; or

5. (5)

   it receives a second supervisory notice to vary its Part 4A permission so that once the variation takes effect it will cease to hold any Part 4A permission.

The circumstances in which a CBTL firm which does not have a Part 4A permission should notify the FCA include but are not limited to when:

1. (1)

   it ceases to carry on CBTL business and does not propose to resume carrying on CBTL business in the immediate future; this does not include circumstances where the CBTL firm temporarily withdraws its products from the market or is preparing to launch fresh products; or

2. (2)

   it changes its registered office or place of residence as the case may be so that it is no longer in the United Kingdom; or

3. (3)

   any individual responsible for the management or operation of the CBTL business within the CBTL firm:

   1. (a)

      is convicted of any offence involving fraud or dishonesty or any indictable offence, including any act or omission which would have been an offence if it had taken place in the United Kingdom; or

   2. (b)

      becomes subject to a prohibition order; or

4. (4)

   it takes on an individual to be responsible for the management or operation of the CBTL business within the CBTL firm who has been:

   1. (a)

      convicted of any offence involving fraud or dishonesty or any indictable offence, including any act or omission which would have been an offence if it had taken place in the United Kingdom; or

   2. (b)

      is subject to a prohibition order; or

5. (5)

   (if the CBTL firm is an undertaking) any person who:

   1. (a)

      holds 10% or more of the shares in the CBTL firm or in a parent undertaking of the CBTL firm; or

   2. (b)

      holds 10% or more of the voting power in the CBTL firm or in a parent undertaking of the CBTL firm; or

   3. (c)

      holds shares or voting power in the CBTL firm or in a parent undertaking of the CBTL firm as a result of which he is able to exercise significant influence over the management of the CBTL firm;

ceases to be a fit and proper person having regard to the need to ensure the sound and prudent conduct of the affairs of the CBTL firm; or

1. (6)

   (if the CBTL firm is an undertaking) any person who is not a fit and proper person, having regard to the need to ensure the sound and prudent conduct of the affairs of the CBTL firm, acquires an interest such that he:

   1. (a)

      holds 10% or more of the shares in the CBTL firm or in a parent undertaking of the CBTL firm; or

   2. (b)

      holds 10% or more of the voting power in the CBTL firm or in a parent undertaking of the CBTL firm; or

   3. (c)

      holds shares or voting power in the CBTL firm or in a parent undertaking of the CBTL firm as a result of which he is able to exercise significant influence over the management of the CBTL firm; or

2. (7)

   any of the following persons cease to be of good repute:

   1. (a)

      a person responsible for the management of the CBTL firm; or

   2. (b)

      a person responsible for the CBTL firm’s CBTL business; or

   3. (c)

      a director of the CBTL firm (if the CBTL firm is a body corporate); or

3. (8)

   a person who is not of good repute becomes:

   1. (a)

      responsible for the management of the CBTL firm; or

   2. (b)

      responsible for the CBTL firm’s CBTL business; or

   3. (c)

      a director of the CBTL firm (if the CBTL firm is a body corporate); or

4. (9)

   (if the CBTL firm is a CBTL arranger or a CBTL adviser) it ceases to hold professional indemnity insurance as described in article 8(f) of the MCD Order; or

5. (10)

   the individuals responsible for the management or operation of the CBTL business of the CBTL firm lack an appropriate level of knowledge or competence in relation to CBTL credit agreements.

Any notification given by a CBTL firm under article 12 of the MCD Order should be:

1. (1)

   in writing;

2. (2)

   in English;

3. (3)

   given to or addressed for the attention of the CBTL firm's usual supervisory contact at the FCA (where the CBTL firm does not have an identified supervisory contact this will be the FCA's Contact Centre);

4. (4)

   delivered to the FCA by one of the methods in SUP 15.7.5AR to the appropriate address set out in SUP 15.7.6AG; and

5. (5)

   given by a person who has full knowledge of the facts giving rise to the notification and who is responsible for the management of the CBTL firm or the CBTL firm’s CBTL business.

A notification given under article 12 of the MCD Order should contain at least the following information:

1. (1)

   the CBTL firm’s name and reference number;

2. (2)

   the name and telephone, postal and email (where available) contact details of the person responsible for making the notification;

3. (3)

   a statement that the notification is given under article 12 of the MCD Order;

4. (4)

   a statement setting out the specific condition of article 8 of the MCD Order that the notification relates to;

5. (5)

   full details of the facts giving rise to the notification, including in particular when the relevant events occurred and when the CBTL firm became aware of them (if different); and

6. (6)

   full details of any steps taken or proposed to be taken by the CBTL firm to address the issues giving rise to the obligation to make the notification, including a proposed timeline for the steps, if applicable.

The MCD Order requires notification to be given immediately. The FCA expects CBTL firms to act with all due urgency in notifying it of any relevant event, and it is unlikely that the FCA will regard delay in excess of 5 working days as complying with the CBTL firm's obligations.