In some cases, the application of provisions set out in SUP 15 Annex 1 depends on whether responsibility is reserved to a Home State regulator. SYSC App 1 contains guidance on this.

Firms are reminded that:

1. (1)

   unless expressly stated otherwise, where a rule or guidance includes a reference to a firm this includes all UK and overseas branches and representative offices of that firm, whether or not those branches or offices carry on any regulated activities; and

2. (2)

   ECO 1.1.6 R has the effect that this chapter does not apply to an incoming ECA provider acting as such.1

A firm is required to provide the FSA with a wide range of information to enable the FSA to meet its responsibilities for monitoring the firm's compliance with requirements imposed by or under the Act. Some of this information is provided through regular reports, including those set out in SUP 16 (Reporting requirements) and SUP 17 (Transaction reporting). In addition, other chapters in the Handbook set out specific notification and reporting requirements. Principle 11 includes a requirement for a firm to disclose to the FSA appropriately anything relating to the firm of which the FSAwould reasonably expect notice.

This chapter sets out:

1. (1)

   guidance on the type of event or change in condition which a firm should consider notifying in accordance with Principle 11; the purpose of this guidance is to set out examples and not to give comprehensive advice to firms on what they should notify in order to be in compliance with Principle 11;

2. (2)

   rules on events and changes in condition that a firm must notify; these are the types of event that the FSA must be informed about, usually as soon as possible, if it is to be able to carry out its monitoring function effectively and react in good time to developments that may require a regulatory response;

3. (3)

   rules on the core information that a firm must provide to the FSA, for example its name and address and the names of its other regulators, so that the FSA is able to maintain a relationship with the firm and with those regulators; and

4. (4)

   rules requiring a firm to ensure that information provided to the FSA is accurate and complete; section 398 of the Act makes it an offence knowingly or recklessly to provide the FSAwith information which is false or misleading in a material particular, in purported compliance with any requirement imposed by or under the Act; the purpose of the rules in SUP 15.6 is to ensure that firms take due care to ensure the accuracy of information and to require them to ensure that information is not only accurate but also complete.

Rules and guidance have also been included to set out how firms should make a notification and to determine when it may be appropriate to discuss matters with their usual supervisory contact by telephone (SUP 15.7).

Schedule 2 contains a consolidated summary of all the notification rules applicable to firms set out in the Handbook.

The circumstances which may give rise to any of the events in SUP 15.3.1 R are wide-ranging and the probability of any matter resulting in such an outcome, and the severity of the outcome, may be difficult to determine. However, the FSA expects firms to consider properly all potential consequences of events.

In determining whether an event that may occur in the foreseeable future should be notified to the FSA, a firm should consider both the probability of the event happening and the severity of the outcome should it happen.

Guidance on satisfaction of the threshold conditions is given in COND.

A firm making a notification in accordance with SUP 15.3.1 R should consider the guidance in SUP 15.7.2 G and notify the FSA by telephone if appropriate.

An insurer or friendly society making a notification under SUP 15.3.1 R (1) relating to satisfaction of threshold condition 4 (Adequate resources) should be aware of the requirements in SUP App 2 (Scheme of operations).

Principle 11 requires a firm to deal with its regulators in an open and cooperative way and to disclose to the FSAappropriately anything relating to the firm of which the FSA would reasonably expect notice. Principle 11 applies to unregulated activities as well as regulated activities and takes into account the activities of other members of a group

Compliance with Principle 11 includes, but is not limited to, giving the FSA notice of:

1. (1)

   any proposed restructuring, reorganisation or business expansion which could have a significant impact on the firm's risk profile or resources, including, but not limited to:

   1. (a)

      setting up a new undertaking within a firm'sgroup, or a new branch (whether in the United Kingdom or overseas); or

   2. (b)

      commencing the provision of cross border services into a new territory; or

   3. (c)

      commencing the provision of a new type of product or service (whether in the United Kingdom or overseas); or

   4. (d)

      ceasing to undertake a regulated activity or ancillary activity, or significantly reducing the scope of such activities; or

   5. (e)

      entering into, or significantly changing, a material outsourcing arrangement (a bank should also see IPRU(BANK) OS 4.2,1 a building society should also see IPRU(BSOC) 111 OS 4.2, and an insurer should also see SYSC 3A.91 for further details); orSYSC 13.9 for further details); or

      11
   6. (f)

      a substantial change or a series of changes in the governing body of an overseas firm (other than an incoming firm); or

   7. (g)

      any change to the firm's prudential category or sub-category, as used in the Interim Prudential sourcebooks and SUP and on which guidance is given in SUP App 1;

2. (2)

   any significant failure in the firm's systems or controls, including

   those reported to the firm by the firm's auditor;

3. (3)

   any action which a firm proposes to take which would result in a material change in its capital adequacy or solvency, including, but not limited to:

   1. (a)

      any action which would result in a material change in the firm's financial resources or financial resources requirement; or

   2. (b)

      a material change resulting from the payment of a special or unusual dividend or the repayment of share capital or a subordinated loan; or

   3. (c)

      for firms which are subject to the rules on consolidated financial supervision, any proposal under which another group company may be considering such an action; or

   4. (d)

      significant trading or non-trading losses (whether recognised or unrecognised).

The period of notice given to the FSA will depend on the event, although the FSA expects a firm to discuss relevant matters with it at an early stage, before making any internal or external commitments.

A notification under Principle 11 may be given orally or in writing (as set out in SUP 15.7.1 R and SUP 15.7.2 G), although the FSA may request written confirmation of a matter. However, it is the responsibility of a firm to ensure that matters are properly and clearly communicated to the FSA. A firm should provide a written notification if a matter either is complex or may be such as to make it necessary for the FSA to take action. A firm should also have regard to Principle 11 and the guidance in SUP 15.7.2 G in respect of providing important information promptly.

In SUP 15.3.11 R(1)(a), significance should be determined having regard to potential financial losses to customers or to the firm, frequency of the breach, implications for the firm's systems and controls and if there were delays in identifying or rectifying the breach.

In assessing whether an event that may occur in the foreseeable future should be notified to the FSA, a firm should consider the guidance in SUP 15.3.3 G.

A notification under SUP 15.3.11 R should include:

1. (1)

   information about any circumstances relevant to the breach or offence;

2. (2)

   identification of the rule or requirement or offence; and

3. (3)

   information about any steps which a firm or other person has taken or intends to take to rectify or remedy the breach or prevent any future potential occurrence.

A notification under SUP 15.3.15 R should include details of the matter and an estimate of the likely financial consequences, if any.

In determining whether a matter is significant, a firm should have regard to:

1. (1)

   the size of any monetary loss or potential monetary loss to itself or its customers (either in terms of a single incident or group of similar or related incidents);

2. (2)

   the risk of reputational loss to the firm; and

3. (3)

   whether the incident or a pattern of incidents reflects weaknesses in the firm's internal controls.

The notifications under SUP 15.3.17 R are required as the FSA needs to be aware of the types of fraudulent and irregular activity which are being attempted or undertaken, and to act, if necessary, to prevent effects on consumers or other firms. A notification under SUP 15.7.3 G should provide all relevant and significant details of the incident or suspected incident of which the firm is aware.

In addition, the firm may have suffered significant financial losses as a result of the incident, or may suffer reputational loss, and the FSA will wish to consider this and whether the incident suggests weaknesses in the firm'sinternal controls.

SUP 15.4.1 R is not made under the powers conferred on the FSA by Part V of the Act (Performance of Regulated Activities). A person notified to the FSA under SUP 15.4.1 R is not subject to the Statements of Principle or Code of Practice for Approved Persons, unless he is also an approved person.

Copies of Form F may be obtained from the FSA website at www.fsa.gov.uk or from the Individual Vetting and Approval department. See SUP 10.11.6 G for contact details.

If adverse information is revealed about a person notified to the FSA under SUP 15.4.1 R, the FSA may exercise its own-initiative power against the firm (see SUP 7 (Individual requirements)).

A notification under SUP 15.5.1 R should include the details of the proposed new name and the date on which the firm intends to implement the change of name.

Firms are reminded that certain name changes (for example, to include 'Limited') may also require a notification under SUP 15.5.5 R.

For the purpose of SUP 15.5.5 R, limiting liability includes:

1. (1)

   re-registration as a limited liability company of a company incorporated with unlimited liability; and

2. (2)

   a general partner in a firm becoming a limited partner.

The FSA's approach to the supervision of a firm is influenced by the regulatory regime and any legislative or foreign provisions to which that firm, including its branches, is subject.

SUP 15.6.1 R applies also in relation to rules outside this chapter, and even if they are not notification rules. Examples of rules and chapters to which SUP 15.6.1 R is relevant, are:

1. (1)

   Principle 11, and the guidance on Principle 11 in SUP 2 (Information gathering by the FSA on its own initiative);

2. (2)

   SUP 15 (Notifications to the FSA):

3. (3)

   SUP 16 (Reporting requirements);

4. (4)

   SUP 17 (Transaction reporting); and

5. (5)

   any notification rule (see Schedule 2 which contains a consolidated summary of such rules).

If a firm is unable to obtain the information required in SUP 15.6.1 R(2), then it should inform the FSA that the scope of the information provided is, or may be, limited.

The FSA may request the firm to provide revised documentation containing the correct information, if appropriate.

Firms are reminded that section 398 of the Act (Misleading the Authority: residual cases) makes it an offence for a firm knowingly or recklessly to provide the FSA with information which is false or misleading in a material particular in purported compliance with the FSA'srules or any other requirement imposed by or under the Act. An offence by a body corporate, partnership or unincorporated association may be attributed to an officer or certain other persons (section 400 of the Act (Offences by bodies corporate etc)).

A firm should have regard to the urgency and significance of a matter and, if appropriate, should also notify its usual supervisory contact at the FSA by telephone or by other prompt means of communication, before submitting a written notification. Oral notifications should be given directly to the firm's usual supervisory contact An oral notification left with another person or left on a voicemail or other automatic messaging service is unlikely to have been given appropriately.2

The FSA is entitled to rely on any information it receives from a firm and to consider any notification received as being made by a person authorised by the firm to do so. A firm should therefore consider whether it needs to put procedures in place to ensure that only appropriate employees make notifications to the FSA on its behalf.

If the firm or its group is subject to lead supervision arrangements by the FSA, the firm or group may give or address a notice under SUP 15.7.4 R(1) to the supervisory contact at the FSA, designated as lead supervisor, if the firm has chosen to make use of the lead supervisor as a central point of contact (see SUP 1.5).

If a firm is a member of a group which includes more than one firm, any one undertaking in the group may notify the FSA on behalf of all firms in the group to which the notification applies. In this way, that undertaking may satisfy the obligation of all relevant firms in the group to notify the FSA. Nevertheless, the obligation to make the notification remains the responsibility of the individual firm itself. See also SUP 15.7.3 G.

Firms wishing to communicate with the FSA by electronic mail or fax should obtain the appropriate address or number from the FSA

If a notification rule does not require notification within a specified period, the firm should act reasonably in deciding when to notify.

Paragraph 6(2) of Schedule 1 to the Act enables the FSA to make arrangements which provide for monitoring functions to be performed by any body or person who, in its opinion, is competent to perform them. Arrangements made under this provision are published by the FSA.

The FSA has made arrangements with the Society of Lloyd's with respect to the monitoring of underwriting agents. Underwriting agents should check whether these arrangements provide for any notifications required under this chapter to be sent to the Society instead of to the FSA. [For further details see the FSA website.]

If a firm fails to comply with the rules in this section then the notification is invalid and there may be a breach of the rule that required the notification to be given.

The Financial Services and Markets Act 2000 (Service of Notices) Regulations 2001 (SI 2001/1420) contain provisions relating to the service of documents on the FSA. They do not apply to notifications required under notification rules because of the specific rules in this section.

1. (1)

   467In accordance with article 25of the Money Laundering Regulations, with effect from 1 April 2004, a firm is required to notify the FSA:

   1. (a)

      before it begins; and

   2. (b)

      as soon as reasonably practicable after it ceases;

   to operate a bureau de change (within (a) of money service business)

2. (2)

   The notification referred to in (1) should be made in accordance with the requirements in SUP 15.7 (Form and method of notification)

4 6 7A firm which is already operating a bureau de changeas at 1 April 2004 and intends to continue doing so is required by the Money Laundering Regulations to notify the FSA of that fact and should do so in the manner specified in .

A UCITS management company which delegates any of its functions to a third party must, as well as complying with SUP 15.8.4 G, comply with the requirements in COLL 6.6.15 (2) , CIS 7.6.1 R (2) or CIS 7.10.4 R (1) as appropriate.8

A firm should consider the requirements in SUP 15.9.2 R on a continuing basis, and in particular, when the group prepares its financial statements and on the occurrence of an event affecting the consolidated group. Such events include, but are not limited to, an acquisition, merger or sale.