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.

7The guidance in SUP 15.13 applies to all CBTL firms whether or not they are also firms.

Firms are reminded that, 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.4

A firm is required to provide the FCA2 with a wide range of information to enable the FCA2 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 FCA2 appropriately anything relating to the firm of which the FCA2 would reasonably expect notice.

7 Payment service providers are required to provide the FCA with such information as the FCA may direct in respect of their provision of payment services or compliance with the requirements imposed by or under Parts 2 to 7 or regulation 105 of the Payment Services Regulations. The purpose of SUP 15.8 is to request information from full credit institutions where they provide (or propose to provide) account information services or payment initiation services. In addition to this general requirement, payment service providers are required under the Payment Services Regulations to notify the FCA on the occurrence of certain specified events. The purpose of SUP 15.14 is to provide directions and guidance to payment service providers on the form, content and timing of notifications required under the Payment Services Regulations.

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 FCA2 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;

   99
3. (3)

   rules on the core information that a firm must provide to the FCA2 for example its name and address and the names of its other regulators, so that the FCA2 is able to maintain a relationship with the firm and with those regulators;

   99991
4. (4)

   rules requiring a firm to ensure that information provided to the FCA2 is accurate and complete; section 3987 of the Act makes it an offence knowingly or recklessly to provide the FCA2 with 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;7

   999911
5. (5)

   material (in SUP 15.10 (Notification of suspicious transactions or orders5 (market abuse)) which makes reference to5 the provisions of the Market Abuse Regulation that detail requirements on5 the reporting of transactions or orders5 about which there is reasonable suspicion of market abuse; and7

   1
6. (6)

   directions and guidance for a payment service provider on the form, content and timing of notifications required to be submitted to the FCA in accordance with or in relation to the Payment Services Regulations.7

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 at the FCA2 by telephone (SUP 15.7).

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 FCA11 expects firms to consider properly all potential consequences of events.

In determining whether the FCA11 should be notified of35 an event that may occur in the foreseeable future, 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 FCA11 by telephone if appropriate.

Principle 11 requires a firm to deal with its regulators in an open and cooperative way and to disclose to the FCA11 appropriately anything relating to the firm of which the FCA11 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

10Although PRIN does not apply to a firm in relation to its carrying on of auction regulation bidding, the FCA35expects to be given notice of events that are material to the FCA's35supervision of that business and so firms carrying on that business should have regard to the guidance in SUP 15.3.8 G to SUP 15.3.10 G.

Compliance with Principle 11 includes, but is not limited to, giving the FCA11 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 bank1,7 a building society and a dormant account fund operator7should also see 221S+YSC 83, and an insurer should also see SYSC 13.94 for further details); or

      34131441
   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; or2

   8. (h)

      any proposed change which limits the liability of any of the members or partners of a firm such as a general partner becoming a limited partner or re-registration as a limited liability company of a company incorporated with unlimited liability;2or7

   9. (i)

      in relation to a dormant account fund operator, notify the FCA11 when the operator intends to rely on a third party for the performance of operational functions which are critical or important for the performance of relevant services and activities in connection with operating a dormant account fund on a continuous and satisfactory basis;7

      35
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 FCA11 will depend on the event, although the FCA11 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 FCA11 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 FCA.11 A firm should provide a written notification if a matter either is complex or may be such as to make it necessary for the FCA11 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.

6 SUP 15.3.11 R (1)(e) relates to the standard requirement in the permission of those firms which fall outside MiFID because of the Treasury's implementation of Article 3 of MiFID. Guidance on how the Treasury has exercised the Article 3 exemption for the United Kingdom is given in Q48 and the following questions and answers in PERG 13.5 (Exemptions from MiFID).

In SUP 15.3.11 R(1)(a) or (1)(aa)18, 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 FCA11 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.

1. (1)

   20Some matters that need to be notified under SUP 15.3.11R may also have to be notified under SUP 10A.14 or SUP 10C.1430 (Changes to an FCA-approved person's details).

2. (2)

   However, there is no need to make the same notification twice.

3. (3)

   Any notification required under both SUP 10C.14 and SUP 15.3.11R should be made in accordance with SUP 10C.14, which requires notification using Forms C or D.

4. (4)

   SUP 10C.14 only applies to SMCR firms28. SUP 10A.14 applies similar, but less extensive, obligations to firms that are not SMCR firms28. Paragraphs (2) and (3) apply to those notifications as well. Such notifications should however be made under SUP 10A.14.

1. (1)

   Some matters that need to be notified under SUP 15.3.11R may also have to be notified under SUP 15.11 (Notification of COCON breaches and disciplinary action).

2. (2)

   If the same thing has to be notified under SUP 15.11 and SUP 15.3.11R, a firm should make separate notifications under both. This is because:23

   1. (a)

      notification under SUP 15.11 is annual and notification under SUP 15.3.11R is immediate; and23

   2. (b)

      the details of what has to be notified under those requirements are different.23

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 FCA11 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 FCA11 will wish to consider this and whether the incident suggests weaknesses in the firm'sinternal controls.

15Changes that the FCA would expect to be notified of under SUP 15.3.26 R include:

1. (1)

   an AIFM being appointed to manage another AIF;

2. (2)

   the appointment of a different depositary for an AIF the AIFM manages; and

3. (3)

   the appointment of any new senior personnel if the AIFM is not required to apply for the FCA's approval for that appointment under section 59 of the Act.

19A EuSEF manager or a EuVECA manager should notify the FCA of the following changes in the following manner:

1. (1)

   for changes to senior personnel, by using the form in SUP 15 Annex 6B R; and

2. (2)

   for changes to the jurisdiction in which its EuSEF or EuVECA is marketed or to market a new EuSEF or EuVECA, by using the form in SUP 15 Annex 6F G

21A notification under SUP 15.3.32R should include:

1. (1)

   information about any circumstances relevant to the infringement or possible infringement;

2. (2)

   identification of the relevant law; and

3. (3)

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

21In determining whether a matter is significant, a firm should have regard to the actual or potential effect on competition, any customer detriment, and the duration of any infringement and implications for the firm's systems and controls.

1. (1)

   21Where a firm notifies the FCA under SUP 15.3.32R, the firm should not infer or assume that any lack of (or delay in) a response, objection or enforcement activity by the FCA or any other competition authority means that the agreement or conduct:

   1. (a)

      does not infringe competition law; or

   2. (b)

      is, or will be, immune from enforcement.

2. (2)

   Notification under SUP 15.3.32R is not sufficient to constitute an application for leniency or immunity from penalty in any subsequent investigation under Chapter 1 of the Competition Act 1998 or article 101 of the Treaty.

SUP 15.4.1 R is not made under the powers conferred on the FCA4 by Part V of the Act (Performance of Regulated Activities). A person notified to the FCA4 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.

1. (1)

   If the FCA's4 information technology systems fail and online submission is unavailable for 24 hours or more, the FCA4 will endeavour to publish a notice on its website confirming that online submission is unavailable and that the alternative methods of submission set out in SUP 15.4.3R(3) and SUP 15.7.4R to SUP 15.7.9G (Form and method of notification) should be used.2

   8888
2. (2)

   Where SUP 15.4.3R (3) applies to a firm, GEN 1.3.2 R (Emergency) does not apply.2

If adverse information is revealed about a person notified to the FCA4 under SUP 15.4.1 R, the FCA4 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 15.5.1R7.

SUP 15.5.4 R and SUP 15.5.5 R mean that a firm should notify the FCA4 of a change in telephone number even if the address of the office is not changing.3

The FCA's4 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.

1. (1)

   If the FCA's4 information technology systems fail and online submission is unavailable for 24 hours or more, the FCA4 will endeavour to publish a notice on its website confirming that online submission is unavailable and that the alternative methods of submission set out in SUP 15.5.9R(3) and SUP 15.7.4R to SUP 15.7.9G (Form and method of notification) should be used.

   10101010
2. (2)

   Where 10SUP 15.5.9R (2)10 applies to a firm, GEN 1.3.2 R (Emergency) does not apply.

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 FCA and PRA99 on their9 own initiative);

   9
2. (2)

   SUP 15 (Notifications to the FCA3):

   99
3. (3)

   SUP 16 (Reporting requirements);

4. (4)

   [deleted]8

   1
5. (5)

   any notification rule (see Schedule 2 which contains a consolidated summary of such rules);1

   2
6. (6)

   DISP 1.9 (Complaints record rule); and21

7. (7)

   DISP 1.10 (Complaints reporting rule).2

If a firm is unable to obtain the information required in SUP 15.6.1 R(2), then it should inform the FCA3 that the scope of the information provided is, or may be, limited.

The FCA3 may request the firm to provide revised documentation containing the correct information, if appropriate.

4 SUP 15.11.13R(4) adjusts the time when, and how, an SMCR firm6 should make updates under SUP 15.6.4R about notifications under section 64C of the Act (Notification of disciplinary action against certain employees).

Firms are reminded that section 398 of the Act (Misleading the FCA or PRA:9 residual cases) makes it an offence for a firm knowingly or recklessly to provide the FCA3 with information which is false or misleading in a material particular in purported compliance with the FCA's3rules 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 FCA4 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 at the FCA.4 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 FCA4 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 FCA4 on its behalf.

If the firm or its group is subject to lead supervision arrangements by the FCA4 the firm or group may give or address a notice under SUP 15.7.4 R(1) to the supervisory contact at the FCA4 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 FCA4 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 FCA.4 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 FCA4 by electronic mail or fax should obtain the appropriate address or number from the FCA4appropriate regulator.7

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

The FCA4 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 FCA.4 [For further details see the FCA's4 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 FCA4. They do not apply to notifications required under notification rules because of the specific rules in this section.

1. (1)

   467In accordance with regulation 2317 of the Money Laundering Regulations, with effect from 26 June 201717 , a firm is required to notify the FCA:20

   1111111120
   1. (a)

      before it begins or within 28 days of it beginning11; and

   2. (b)

      immediately11 after it ceases;

      11

   to operate a money service business or a trust or company service provider.11

   11
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 money service business or a trust or company service provider11 immediately before 26 June 201717 is required by the Money Laundering Regulations to notify the FCA20 of that fact within 30 days17 and should do so in the manner specified in SUP 15.8.4 G(2)17.

A UK UCITS management company14 which delegates any of its functions to a third party must, as well as complying with SUP 15.8.6 R,13 comply with the requirements in SYSC 8.1.13 R (Additional requirements for a management company) and COLL 6.6.15 A R.14

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.

1. (1)

   Notification of suspicious transactions or orders3 to the FCA requires sufficient indications (which may not be apparent until after the transaction has taken place) that the transaction or order3 might constitute market abuse. In particular a person subject to article 16 of the Market Abuse Regulation3 will need to be able to explain the basis for the3 suspicion when notifying the FCA. Certain transactions or orders3 by themselves may seem completely devoid of anything suspicious, but might deliver such indications of possible market abuse, when seen in perspective with other transactions, certain behaviour or other information (though persons subject to article 16 of the Market Abuse Regulation3 are not expected to breach effective information barriers put in place to prevent and avoid conflicts of interest so as actively to seek to detect suspicious transactions).3

   444444
2. (2)

   Assistance in identifying the elements constituting market abuse can be found within the Market Abuse Regulation3.

3A person subject to article 16 of the Market Abuse Regulation making a notification to the FCA under this section may do so using the system indicated on the FCA’s website.

1Under section 64A of the Act, the FCA may make rules about the conduct of approved persons and certain other 4persons who work for a firm4.

COCON sets out rules under section 64A of the Act4and guidance on those rules for SMCR firms5.

Under section 64C of the Act, a firm must notify the FCA if it takes disciplinary action against certain people working for an SMCR firm5 and the reason for this action is a reason specified in rules made by the FCA (those rules are set out4 in SUP 15.11.6R)4.

Disciplinary action against a person4 is defined in section 64C of the Act as the issuing of a formal written warning, the suspension or dismissal of that person4 or the reduction or recovery of any of such person's remuneration.

4The effect of section 64C of the Act and SUP 15.11.6R is that the reporting obligation in section 64C of the Act and in this section:

1. (1)

   only applies to SMCR firms; and5

2. (2)

   only covers persons who are subject to COCON (who are called conduct rules staff in the FCA Handbook) rather than to the whole workforce of an SMCR firm.5

A firm should make a separate notification about a person under section 64C of the Act where:

1. (1)

   it has made a notification to the FCA about the5person pursuant to SUP 15.3.11R(1)(a) because of a breach of COCON2; and

2. (2)

   it subsequently takes disciplinary action against the person for the action, failure to act, or circumstance, that amounted to a breach of COCON.

If, after a firm has made a notification for a person (A) pursuant to section 64C of the Act,2 it becomes aware of facts or matters which cause it to change its view that A has breached COCON, or cause it to determine that A has breached a provision of COCON other than the provision to which the notification related, the firm should inform the FCA of those facts and matters and its revised conclusion in line with a firm’s obligation to comply with Principle 11, SUP 15.6.4R and, if applicable, SUP 10C or SUP 15.11.13R(4)3.

1. (1)

   If a firm takes disciplinary action as a result of a conduct breach (see SUP 15.11.6R) against an employee but the employee has appealed or plans to appeal, the firm should still report the disciplinary action under section 64C of the Act but should include the appeal in the notification.5

2. (2)

   The firm should update the FCA on the outcome of any appeal.5

In relation to any conduct rules staff, the FCA does not expect a firm to notify it pursuant to2section 64C of the Act if the2 breach of COCON occurred before the application of COCON to that firm.

Where a firm is required to notify the FCA pursuant to2section 64C of the Act and that notification relates to an SMF manager, SUP 10C sets out how and when the notification must be made, and the relevant notification rules in SUP 10C apply.

3 SUP 15.11.8G and SUP 15.11.9G(2) give5 examples of when a notification should be updated under SUP 15.11.13R(4).

1. (1)

   3If the information technology systems used by the FCA fail and online submission is unavailable for 24 hours or more, the FCA will endeavour to publish a notice on its website confirming that:

   1. (a)

      online submission is unavailable; and

   2. (b)

      the alternative methods of submission in SUP 15.11.15R apply.

2. (2)

   Where SUP 15.11.14R(3) applies to a firm, GEN 1.3.2R (Emergency) does not apply.

The obligation to notify pursuant to2section 64C of the Act or to update or correct a notification under SUP 15.11.13R(4)3 does not replace or limit a firm’s obligation to comply with Principle 11.

When considering whether to make a notification pursuant to2section 64C of the Act, a firm should also consider whether a notification should be made under any notification rules, including, without limitation, any notification rules that require a notification to be made to the PRA.

The obligations to make a notification pursuant to2section 64C of the Act apply notwithstanding any agreement (for example a 'COT 3' Agreement settled by the Advisory, Conciliation and Arbitration Service (ACAS)) or any other arrangements entered into by a firm and an employee upon termination of the employee's employment. A firm should not enter into any such arrangements or agreements that could conflict with its obligations under this section.

Failing to disclose relevant information to the FCA may be a criminal offence under section 398 of the Act.

For the purpose of SUP 15.12.1R:

1. (1)

   when calculating the number of complaints in SUP 15.12.1R(1)(a), the firm should exclude complaints previously notified to the FCA under this rule;

2. (2)

   redress, under SUP 15.12.1R(1)(b), should be interpreted to include an amount paid, or cost borne, by the firm, where a cash value can be readily identified, and should include:

   1. (a)

      amounts paid for distress and inconvenience;

   2. (b)

      a free transfer out to another provider for which a transfer would normally be paid for;

   3. (c)

      goodwill payments and gestures;

   4. (d)

      interest on delayed settlements;

   5. (e)

      waiver of an excess on an insurance policy; and

   6. (f)

      payments to put the consumer back into the position the consumer should have been in had the act or omission not occurred; and

3. (3)

   the amount of redress paid under SUP 15.12.1R(1)(b) should not include repayments or refunds of premiums which have been taken in error (for example, where a firm has been taking, by direct debit, twice the actual premium amount due under a policy) and the refund of the overcharge would not count as redress.

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’sCBTL 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’sCBTL 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’sCBTL 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.

1This section applies to payment service providers.

The purpose of this section is to give directions and guidance to payment service providers relating to the form, content and timing of notifications required under the Payment Services Regulations.

References in this section to a refusal of a request for access to payment account services include a withdrawal or termination of access to such services.

A notification required by regulation 105(3) of the Payment Services Regulations and SUP 15.14.3D must include duly motivated reasons for the refusal.

The direction in SUP 15.14.6D will not apply if the FCA gives a different direction to a specific credit institution, in the light of the particular circumstances surrounding a refusal of access to payment account services, about how to notify the FCA. The FCA is likely to be minded to do so where a credit institution decides to withdraw access to a large number of persons falling within paragraphs (1)(a) to (e) (excluding (1)(d)) of the Glossary definition of payment service provider simultaneously, such that complying with SUP 15.14.6D becomes impractical, and provides advance notice of the proposed withdrawal to their usual supervisory contact at the FCA. For these purposes, fewer than ten persons is unlikely to be considered a large number.

Credit institutions are reminded of the general notification requirements in SUP 15.3, including the obligation to notify the FCA as soon as they become aware of any matter (including a matter which may occur in the foreseeable future) which could affect their ability to continue to provide adequate services to their customers and which could result in serious detriment to a customer of the credit institution (SUP 15.3.1R(3)).

Where:

1. (1)

   an account servicing payment service provider denies access to more than one payment account or to a payment account on multiple consecutive occasions; and

2. (2)

   these denials of access:

   1. (a)

      are in respect of the same account information service provider or payment initiation service provider; and

   2. (b)

      arise out of the same facts and happen for the same reasons,

   the account servicing payment service provider is required to submit only a single notification in respect of them under regulation 71(8)(c) of the Payment Services Regulations and SUP 15.14.10D.

Where an account servicing payment service provider has already submitted a notification in accordance with regulation 71(8)(c) of the Payment Services Regulations and SUP 15.14.10D and continues to deny access to a payment account, it is not required to notify the FCA of a consecutive denial of access that happens after the original notification was sent if it:

1. (1)

   is in respect of the same account information service provider or payment initiation service provider; and

2. (2)

   arises out of the same facts and happens for the same reasons.

For the purposes of SUP 15.14.12D and SUP 15.14.16D we would expect the account servicing payment service provider to complete and submit the notification as quickly as possible.

Regulation 99(1) of the Payment Services Regulations provides that, if a payment service provider becomes aware of a major operational or security incident, the payment service provider must, without undue delay, notify the FCA. The purpose of this section is to direct the form and manner in which such notifications must made and the information they must contain, in exercise of the power in regulation 100(2) of the Payment Services Regulations.

The EBA has issued Guidelines on incident reporting under the Payment Services Directive that specify the criteria a payment service provider should use to assess whether an operational or security incident is major and needs to be reported to the FCA. These Guidelines also specify the format for the notification and the procedures the payment service provider should follow.

Payment service providers should note that article 16(3) of Regulation (EU) No 1093/2010 also requires them to make every effort to comply with the EBA’s Guidelines on incident reporting under the Payment Services Directive.

Where the electronic means of submission of notifications is known not to be available or operated at the time the incident is first detected, the notification should be sent to the FCA as soon as the electronic means of submission becomes available and operational again. Unless the FCA has informed a specific payment service provider that electronic means of submission are also available to it and operated at other times, the electronic means of submission are available and operated during normal operating hours, as specified by the FCA.

The EBA’s Guidelines on incident reporting under the Payment Services Directive contain guidelines on the completion of the form specified in SUP 15 Annex 11D. Payment service providers should use the same form in all reports concerning the same incident. Payment service providers may not have sufficient information to complete all parts of the form in the initial report. They should complete the form in an incremental manner and on a best effort basis as more information becomes readily available in the course of their internal investigations.

Payment service providers are reminded that regulation 142 of the Payment Services Regulations (Misleading the FCA or the Payment Systems Regulator) makes it an offence for a person to knowingly or recklessly provide the FCA with information which is false or misleading in a material particular in purported compliance with the directions given in this section or any other requirement imposed by or under the Payment Services Regulations.

If a payment service provider fails to comply with the directions in this section then the notification is invalid and there may be a breach of the regulation of the Payment Services Regulations or the direction 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 FCA. They do not apply to notifications required under this section because of the specific directions given in this section.

2Article 18 of the SCA RTS permits payment service providers not to apply strong customer authentication where the payer initiates a remote electronic payment transaction identified by the payment service provider as posing a low level of risk according to the transaction monitoring mechanism referred to in article 2 and article 18 of the SCA RTS.

2Article 19 of the SCA RTS requires payment service providers to ensure that the overall fraud rates per quarter for transactions executed under the article 18 exemption are equivalent to or lower than the reference fraud rates indicated in the Annex to the SCA RTS. Article 19 defines a quarter as 90 days.

2Where a fraud rate calculated in compliance with article 19 of the SCA RTS exceeds the applicable reference fraud rate, article 20(1) of the SCA RTS requires payment service providers to immediately report to the FCA, providing a description of the measures that they intend to adopt to restore compliance with the reference fraud rates.

2 Payment service providers should report in respect of each quarter in which a fraud rate exceeds the applicable reference rate.

2Where a fraud rate exceeds the applicable reference rate for two consecutive quarters, the payment service provider is required by article 20(2) of the SCA RTS to immediately cease to make use of the article 18 exemption. The report for the second quarter should confirm that the payment service provider has ceased to make use of the article 18 exemption.

2A payment service provider notifying the FCA before again making use of the article 18 exemption must provide evidence of the restoration of compliance of their monitored fraud rate with the applicable reference fraud rate for that exemption threshold range for one quarter, under article 20(4) of the SCA RTS.

2Notifying the FCA one month before making use again of the article 18 exemption would be a reasonable timeframe within the meaning of SUP 15.14.35D(3).

2The following problems with dedicated interfaces should be reported:

1. (a)

   the interface does not perform in compliance with article 32 of the SCA RTS; or

2. (b)

   there is unplanned unavailability of the interface or a systems breakdown.

Unplanned unavailability or a systems breakdown may be presumed to have arisen when five consecutive requests for access to information for the provision of payment initiation services or account information services are not replied to within 30 seconds.

SUP 15.15.3R means that this section does not apply to:

1. (1)

   an SMCR banking firm, an SMCR insurance firm or a limited scope SMCR firm; or

2. (2)

   a firm that is excluded from the enhanced regime as defined in Part 7 of SYSC 23 Annex 1 (Exclusion from enhanced regime).

This section applies even if the firm meets one of the other qualification conditions in SYSC 23 Annex 1 for being an enhanced scope SMCR firm as well as the retail intermediary one.

The purpose of this section is to require certain firms to calculate whether or not they meet the qualification condition for being an enhanced scope SMCR firm based on total intermediary regulated business revenue. In certain cases a firm should report the result of the calculation to the FCA but this section does not require regular reports.

The calculations required by this section are made in the same way as they are for Section B of the RMAR.

1. (1)

   The amount of work required by SUP 15.15.8R will vary between firms.

2. (2)

   In some cases the firm’s total intermediary regulated business revenue will be so small or large that the firm will need to do little work to establish whether or not it meets the retail intermediary qualification condition.

3. (3)

   In some cases a firm’s total income (intermediary regulated business revenue and all its other income) may be below the qualification amount. The firm may have accounts that it has prepared to the necessary standard for other purposes (such as statutory accounts) that show this. In this case the firm may need to do virtually no additional work to establish that it does not meet the retail intermediary qualification condition.

4. (4)

   In some cases the firm may need to calculate the precise amount of its total intermediary regulated business revenue. In that case the firm may need to do the same amount of work it would have to do if it had to report to the FCA under Section B of the RMAR.

A firm should not include the amount of its total intermediary regulated business revenue in a notification under SUP 15.15.12R.

1. (1)

   This section does not require a firm regularly to notify the FCA whether or not it meets the retail intermediary qualification condition for each averaging period.

2. (2)

   Instead this section requires a firm to notify the FCA when it first meets the retail intermediary qualification condition and if it ceases to.

3. (3)

   So, for example, if the firm notifies the FCA that it meets the retail intermediary qualification condition, there is no need for any further notifications unless and until it ceases to meet the retail intermediary qualification condition.

4. (4)

   Similarly, if the firm never meets the retail intermediary qualification condition, it will never have to notify the FCA under this section.

5. (5)

   There is no need for a firm to notify the FCA if it ceases to be a retail intermediary as defined in this section because it has started to submit an RMAR, as long as it continues to meet the retail intermediary qualification condition.

Subject to SUP 15.15.17R, SUP 15.7 (Form and method of notification) applies to notifications under this section.

1The purpose of this section is to:

1. (1)

   to set out material related to the requirement in the MiFID authorisation and management body change notification ITS for a MiFID investment firm to notify the FCA of changes to its management body;

2. (2)

   apply those requirements to MiFID optional exemption firms; and

3. (3)

   give guidance to firms about notifying the FCA of inadequacies in their management body.

1Article 5 of the MiFID authorisation and management body change notification ITS says that a MiFID investment firm should:

1. (1)

   notify the FCA of any change to the membership of its management body:

   1. (a)

      before such change takes effect; or

   2. (b)

      within 10 business days after the change if, for substantiated reasons, it is not possible to make the notification before that change takes effect; and

2. (2)

   make the notification using the template in Annex III of the MiFID authorisation and management body change notification ITS.

1The reason for SUP 15.16.6R is that the firm will already be required to inform the FCA of the change by making an application or giving a notice to the FCA under SUP 10C (FCA senior managers regime for approved persons in SMCR firms).

1If the information technology systems used by the FCA fail and online submission is unavailable for 24 hours or more, the FCA will endeavour to publish a notice on its website confirming that:

1. (1)

   online submission is unavailable; and

2. (2)

   the alternative methods of submission in SUP 15.16.9R apply.

1Where SUP 15.16.9R applies to a firm, GEN 1.3.2R (Emergency) does not apply.

1A firm should notify the FCA under Principle 11, SUP 10C (in the case of a notification about an SMF manager) and SUP 15.3 (General notification requirements):

1. (1)

   if the firm concludes that a member of its management body is not suitable individually;

2. (2)

   if the firm concludes that its management body is not suitable collectively;

3. (3)

   of what measures the firm proposes to take or has taken in relation to the matters in (1) or (2).

1. (1)

   1As explained in SYSC 23 Annex 1 6.12R, the FCA may grant a waiver to certain benchmark firms that treats them as a limited scope SMCR firm.

2. (2)

   One of the eligibility conditions that the FCA anticipates it will apply is that the firm’s income from benchmark activities is below 20% of its total income.

3. (3)

   The purpose of this section of the FCA Handbook is to allow the FCA to monitor whether a firm continues to meet that condition after it has received the waiver.

4. (4)

   The waiver may modify or replace this section to be consistent with the basis on which a firm receives the waiver if the firm receives the waiver:

   1. (a)

      on a different basis from the one described in (2);

   2. (b)

      on the basis of an adjusted calculation of revenue as contemplated by SYSC 23 Annex 1 6.17G(5) (Benchmark firms: When the waiver is likely to be available); or

   3. (c)

      on some other basis inconsistent with this section.

1The notification obligations in this section apply whether this is the first time the relevant event has occurred or whether it has happened before.

1A firm need not include the amount of its annual regulated income or annual income in a notification under this section.

1A firm’s reporting year may start or end before it became a firm or a limited scope SMCR benchmark firm.

1A firm should make the notification in SUP 15.7.10R even if it had no annual regulated income in the previous reporting year because, for example, it has only recently started its benchmark activities.

1. (1)

   1This section of the FCA Handbook does not require a firm regularly to notify the FCA whether its annual regulated income is 20% or more of its annual income or less than 20%.

2. (2)

   Instead this section only requires a firm to notify the FCA when its annual regulated income crosses (upwards or downwards) the 20% mark.

3. (3)

   So, for example, if the firm’s annual regulated income stays below the 20% mark it will never need to notify the FCA under this section.

1Subject to SUP 15.17.18R, SUP 15.7 (Form and method of notification) applies to notifications under this section of the FCA Handbook.