31The directions and guidance in SUP 16.18 apply for the following types of AIFM:

1. (1)

   a small registered UK AIFM;

2. (2)

   an above-threshold non-EEA AIFMmarketing in the UK; and

3. (3)

   a small non-EEA AIFMmarketing in the UK.

35The only categories of firm to which no section of this chapter applies are:

1. (1)

   an ICVC;

2. (2)

   an incoming EEA firm or incoming Treaty firm, unless it is:

   1. (a)

      a firm of a type listed in SUP 16.1.3 R as a type of firm to which SUP 16.6, SUP 16.7A,335SUP 16.9,23SUP 16.12, or SUP 16.142325 applies; or

      2617
   2. (b)

      an insurer with permission to effect or carry out life policies; or39

   3. (c)

      a firm with permission to establish, operate or wind up a personal pension scheme or 14 a stakeholder pension scheme;3 or39

      14
   4. (d)

      a payment service provider to which SUP 16.22 applies; and39

3. (3)

   a UCITS qualifier.

1. (1)

   This chapter contains requirements to report to the FCA37 on a regular basis. These requirements include reports relating to a firm's financial condition, and to its compliance with other rules and requirements which apply to the firm. Where the relevant requirements are set out in another section of the Handbook, this chapter contains cross references. An example of this is financial reporting for insurers and friendly societies.

   6666
2. (2)

   Where such requirements already apply to a firm under legislation other than the Act, they are not referred to in this chapter. An example of this is reporting to the FCA37 by building societies under those parts of the Building Societies Act 1986 which have not been repealed.

   6666
3. (3)

   Requirements for individual firms reflect:

   1. (a)

      the category of firm;

   2. (b)

      the nature of business carried on;

   3. (c)

      whether a firm has its registered office (or if it does not have a registered office, its head office) in the United Kingdom; 17

   4. (d)

      whether a firm is an incoming EEA firm or incoming Treaty firm; and17

      17
   5. (e)

      the regulated activities the firm undertakes.17

66Where a PRA-authorised person is required to notify or provide any information to (a) the FCA37 by a PRA Handbook provision and (b) the FCA by the equivalent provision in the FCA Handbook, the PRA-authorised person is expected to comply with both provisions.

1. (1)

   In order to discharge its functions under the Act, the FCA1 needs timely and accurate information about firms. The provision of this information on a regular basis enables the FCA1 to build up over time a picture of firms' circumstances and behaviour.

   777
2. (2)

   Principle 11 requires a firm to deal with its regulators in an open and cooperative way, and to disclose to the FCA1 appropriately anything relating to the firm of which the FCA1 would reasonably expect notice. The reporting requirements are part of the FCA1 approach to amplifying Principle 11 by setting out in more detail the information that the FCA1 requires. They supplement the provisions of SUP 2 (Information gathering by the FCA or PRA2 on its own initiative) and SUP 15 (Notifications to the FCA1). The reports required under these rules help the FCA1 to monitor firms' compliance with Principles governing relationships between firms and their customers, with Principle 4, which requires firms to maintain adequate financial resources, and with other requirements and standards under the regulatory system.

   777777777777

The effect of SUP 16.1.1 R is that this section applies to every firm except:

1. (1)

   an ICVC;

2. (2)

   an incoming EEA firm or incoming Treaty firm, which is not:

   1. (a)

      a firm of a type listed in SUP 16.1.3 R as a firm to which section SUP 16.6 or SUP 16.1214 applies;

      1424
   2. (b)

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

3. (3)

   a UCITS qualifier.

This chapter has been split into the following 14sections, covering:

1. (1)

   annual controllers reports (SUP 16.4);

2. (2)

   annual close links reports (SUP 16.5);

3. (3)

   compliance reports (SUP 16.6);

4. (4)

   [deleted]24

   24
5. (4A)

   annual report and accounts (SUP 16.7A);26

6. (5)

   persistency reports (SUP 16.8);

   53
7. (6)

   annual appointed representatives reports (SUP 16.9);5

   53
8. (7)

   Verification of standing data (SUP 16.10);58

   14
9. (8)

   product sales data reporting (SUP 16.11);

   51419
10. (9)

    integrated regulatory reporting (SUP 16.12);

    20
11. (10)

    reporting under the Payment Services Regulations (SUP 16.13)49;20

    19
12. (11)

    client money and asset return (SUP 16.14);2021

    25
13. (12)

    reporting under the Electronic Money Regulations (SUP 16.15)49.23

14. (13)

    49prudent valuation reporting (SUP 16.16);

15. (14)

    49remuneration reporting (SUP 16.17);

    252527
16. (15)

    AIFMD reporting (SUP 16.18); 30

    2727
17. (16)

    reporting under the MCD Order for CBTL firms (SUP 16.21);31

    2730
18. (17)

    reporting under the Payment Accounts Regulations (SUP 16.22); and31

    30
19. (18)

    annual financial crime reporting (SUP 16.23).31

The annual controllers, annual close links , persistency and annual appointed representatives reports sections are the same for all categories of firm to which they apply.3

The compliance section is14set out by category of firm, with detailed requirements set out in tables giving:

1. (1)

   a brief description of each report;

2. (2)

   the frequency with which the report is required; and

3. (3)

   the due date for submission of the report.

Further requirements about the reports, such as form and content, are set out in the sections for each category of firm, where this is appropriate. In many cases, however, it is more appropriate to provide this information by means of a separate annex; in these cases the relevant section refers to the annex.

SUP 15.6 refers to and contains requirements regarding the steps that firms must take to ensure that information provided to the FCA28 is accurate and complete. Those requirements apply to reports required to be submitted under this chapter.

9Failure to submit a report in accordance with the rules in, or referred to in,12 this chapter or the provisions of relevant legislation12 may also lead to the imposition of a financial penalty and other disciplinary sanctions. A firm may be subject to reporting requirements under relevant legislation other than the Act, not referred to in this chapter. An example of this is reporting to the FCA28 by building societies under those parts of the Building Societies Act 1986 which have not been repealed (see SUP 16.1.4 G).12 If it appears to the FCA28 that, in the exceptional circumstances of a particular case, the payment of any fee would be inequitable, the FCA28 may reduce or remit all or part of the fee in question which would otherwise be payable (see 10FEES 2.3).10

The FCA28 may from time to time send reminders to firms when reports are overdue. Firms should not, however, assume that the FCA28 has received a report merely because they have not received a reminder.1

The firm is responsible for ensuring delivery of the required report at the by the due date. If a report is received by the FCA28 after the due date and the firm believes its delivery arrangements were adequate, it may be required to provide proof of those arrangements. Examples of such proof would be:

1. (1)

   "proof of posting" receipts from a UK post office or overseas equivalent which demonstrates that the report was posted early enough to allow delivery by the due date in accordance with the delivery service standards prescribed by the relevant postal authority; or

2. (2)

   recorded postal delivery receipts showing delivery on the required day; or

3. (3)

   records of a courier service provider showing delivery on the required day.

SUP 16.2.1 G emphasises the importance to the FCA28 of timely and accurate information. The extension of a firm's accounting period to more than 15 months may hinder the timely provision of relevant and important information to the FCA28 . This is because many due dates for reporting to the FCA28 are linked to firms'accounting reference dates. Indeed, for some categories of firm, the only reports required by the FCA28 have due dates for submission which are linked to the firm's accounting reference date.If the extension of a firm's accounting period appears likely to impair the effectiveness of the FCA28 supervisory work, the FCA28 may take action to ensure that it continues to receive the information it requires on a timely basis. This may include the use of any of the tools of supervision set out in SUP 1.4.5 G.

If more than one firm in a group intends to change its accounting reference date at the same time, a single notification may be given to the FCA28 , as described in SUP 15.7.8 G.

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 FCA28 . They do not apply to reports required under SUP 16, because of the specific rules in this section.

When the FCA28 receives a report which contains confidential information and whose submission is required under this chapter, it is obliged under Part 2349of the Act (Public Record, Disclosure of Information and Co-operation) to treat that information as confidential. (See SUP 2.2.4 G for the FCA and SUP 2.2.4A G for the PRA49)

SUP 2.3.12A G and SUP 2.3.12B G state that the FCA28appropriate regulator49 may pass to other regulators information which it has in its possession. Such information includes information contained in reports submitted under this chapter. The FCA's28 disclosure of information to other regulators is subject to SUP 2.2.4 G or SUP 2.2.4A G49 (Confidentiality of information).

If this chapter requires the submission of a report or data item13 covering a group, a single report or data item13 may be submitted, and so satisfy the requirements of all firms in the group. Such a report or data item13 should contain the information required from all of them, meet all relevant due dates and indicate all the firms on whose behalf it is submitted; if necessary a separate covering sheet should list the firms on whose behalf a report or data item13 is submitted. Nevertheless, the requirement to provide a report or data item13, and the responsibility for the report or data item13, remains6 with each firm in the group. However, reporting requirements that apply to a firm, by reason of the firm being a member of a financial conglomerate, are imposed on only one member of the financial conglomerate (see, for example, SUP 16.12.32 R14).6

Examples of reports covering a group are:

1. (1)

   the compliance reports required from banks under SUP 16.6.4 R;

2. (2)

   annual controllers reports required under SUP 16.4.5 R4949;

3. (3)

   annual close links reports required under SUP 16.5.4 R

4. (4)

   consolidated financial reports required from banks under SUP 16.12.5 R2424;

5. (5)

   consolidated reporting statements required from securities and futures firms under 24SUP 16.12.11 R24;17

6. (6)

   reporting in relation to defined liquidity groups under SUP 16.12.17

This section applies to every firm except those firms excluded from its operation by SUP 16.1.1 R and SUP 16.1.3 R. 632

This section may be of relevance to a directive friendly society:

1. (1)

   if it has 10 members or less;

2. (2)

   if it has a delegate voting system and has 10 delegates or less; or

3. (3)

   if it has 20 members or less and effects or carries out group insurance contracts where one person may exercise one vote on behalf of the members of a group and one vote in their private capacity; or

where a member or delegate, whether alone or acting in concert8, is entitled to exercise, or control the exercise of, 10% or more of the total voting power.

8This section may be of relevance to non-directive firms.

Requirements for notifications of a change in control can be found in SUP 11 (Controllers and close links).

A firm and its controllers are required to notify certain changes in control (see7SUP 11 (Controllers and close links)). The purpose of the rules and guidance in this section is:

1. (1)

   to ensure that, in addition to such notifications, the FCA12 receives regular and comprehensive information about the identities of all of the controllers of a firm, which is relevant to a firm's continuing to satisfy the effective supervision threshold conditions15;

   15158
2. (2)

   to implement certain requirements relating to annual reporting of controllers which must be imposed on firms under the Investment Services Directive, the Banking Consolidation Directiveand the Solvency II Directive; and11

   711
3. (3)

   to support the regulatory15 functions under Part 1215of the Act (Notices of acquisitions of control8 over UK 8authorised persons) (see SUP 11 (Controllers and close links)).

   15158

If a group includes more than one firm, a single annual controllers report may be submitted, and so satisfy the requirements of all firms in the group. Such a report should contain the information required from all of them, meet all relevant due dates, indicate all the firms on whose behalf it is submitted and give their firm reference numbers. Nevertheless, the requirement to provide a report, and the responsibility for the report, remain with each firm in the group.1

Firms are reminded of the requirement in SUP 11.4.10 R to take reasonable steps to keep themselves informed about the identity of their controllers.

This section applies to every firm listed in SUP 11.1.1 R (1) to SUP 11.1.1 R (6),5 except those firms excluded from its operation by SUP 16.1.1 R and SUP 16.1.3 R or which have elected to report on a monthly basis in accordance with SUP 11.9.5 R.5432

A firm is required to notify the appropriate regulator of changes to its close links (see SUP 11.9). The effective supervision threshold conditions provide that, if a firm has close links with another person, the matters which are relevant in determining whether a firm satisfies the condition of being capable of being effective supervised include:11

1. (1)

   the nature of the relationship between the firm and that person;11

   11
2. (2)

   whether those links or that relationship are likely to prevent the appropriate regulator's effective supervision of the firm; and11

   11
3. (3)

   11if the person is subject to the laws, regulations or administrative provisions of a territory which is not an EEA State, whether those foreign provisions, or any deficiency in their enforcement, would prevent the appropriate regulator's effective supervision of the firm.

The purposes of the rules and guidance in this section are:

1. (1)

   to ensure that, in addition to such notifications, the appropriate regulator11 receives regular and comprehensive information about the identities of all persons with whom a firm has close links, which is relevant to a firm's continuing to satisfy the effective supervision threshold conditions11 and to the protection of consumers; and

   1111
2. (2)

   to implement certain requirements relating to the provision of information on close links which must be imposed on firms under the 'Post-BCCI Directive'.

If a group includes more than one firm, a single annual close links report may be submitted and so satisfy the requirements of all firms in the group. Such a report should contain the information required from all of them, meet all relevant due dates, indicate all the firms on whose behalf it is submitted and give their firm reference numbers. Nevertheless, the requirement to provide a report, and the responsibility for the report, remain with each firm in the group.1

The effect of SUP 16.1.1 R is that this section applies to every firm within a category listed in the left hand column of the table in SUP 16.6.2 G.

13The FCA performs part of its supervision work by reviewing and analysing information about firms' records of compliance with the requirements and standards under the regulatory system. The type of report the FCA requires will vary, depending on the type of business a firm undertakes. This information helps the FCA to determine whether a firm is complying with the requirements applicable to its business, and what procedures it is operating to ensure its compliance.

1. (1)

   10A depositary should report a breach only once under SUP 16.6.8R(1A)(a) and once under SUP 16.6.8R(1A)(c). When both reports are made in the same month, only a single entry in the form is required. Under SUP 16.6.8R(1A)(b) a depositary should report changes to the reported details of existing breaches.

2. (2)

   A separate line should be entered on the form for each rule breached. For example, a breach of the investment limits in COLL 5.2.11R11 that results in incorrect pricing of the scheme contrary to COLL 6.3.3R should be recorded as two entries, with the same reference.

3. (3)

   Under SUP 16.6.8R(1A)(c) a depositary should report all breaches that have been closed during the previous month. A breach can be closed in a number of ways. For example:

   1. (a)

      A breach that does not involve changes to systems and controls may be considered closed when, in the opinion of the depositary, the authorised fund manager has taken all necessary action to rectify the breach.

   2. (b)

      A breach that requires changes to systems and controls that cannot be implemented promptly, may nevertheless be considered closed when, in the opinion of the depositary, the authorised fund manager has implemented an effective temporary control to resolve the issue, taking into account the interests of Unitholders.

4. (4)

   A depositary should not consider a breach closed until any applicable compensation has been paid to the scheme and/or to Unitholders.

The purpose of this section is to require firms to submit their annual report and accounts, and the annual report and accounts of their mixed activity holding companies, to the FCA online through the appropriate systems accessible from the FCA's website. This information is used in the monitoring of firms both individually and collectively.

1The effect of SUP 16.1.1 R is that this section applies to:

1. (1)

   every insurer with permission to effect or carry out life policies, unless it is a non-directive friendly society1; and

2. (2)

   every firm with permission to establish, operate or wind up a stakeholder pension scheme.

1The purpose of this section is to enable information on the persistency of life policies and data on stakeholder pensions to be prepared and provided to the FCA11 in a standard format. This information is used in the monitoring of firms both individually and collectively.

1 Firms are reminded that annuity contracts other than deferred annuity contracts are not within the definition of 'life policy'.

1 Life policies and stakeholder pensions falling within SUP 16.8.8 R (2) (c) are those which have been transferred from another firm, for example under an insurance business transfer scheme under Part 711 of the Act (Control of Business Transfers).

1Examples of loss to the policyholder under SUP 16.8.11 R are losses resulting from higher charges and more restrictive benefits and options.

1In order to comply with SUP 16.8.23 R, a firm will as a minimum need to make and retain separate records for:

1. (1)

   life policies and stakeholder pensions originally promoted:

   1. (a)

      by company9representatives; or

   2. (b)

      by intermediaries providing independent advice or restricted advice; or9

      9
   3. (c)

      through the firm's own direct offer financial promotions;

      9
   4. (d)

      [deleted]9

      9
2. (2)

   life policies and stakeholder pensions not within (1), including those effected as execution-only transactions,9for inclusion in the relevant form under 'Other';9

   99
3. (3)

   life policies and stakeholder pensions written assuming the payment of:

   1. (a)

      regular premiums;

   2. (b)

      a single premium;

4. (4)

   life policies written as:

   1. (a)

      ordinary assurance policies;

   2. (b)

      industrial assurance policies;

5. (5)

   the categories of life policies and stakeholder pensions referred to in SUP 16 Annex 6R.9

   39

1The effect of SUP 16.1.1 R is that this section applies to every firm with a Part 4A permission6 to advise on investments, arrange (bring about) deals in investments, making arrangements with a view to transactions in investments, or arrange safeguarding and administration of assets.

1The purpose of the rules and guidance in this section is to ensure that, in addition to the notifications made under SUP 12.7 (Appointed representatives; notification requirements), the FCA6 receives regular and comprehensive information about the appointed representatives engaged by a firm, so that the FCA6 is in a better position to pursue the statutory objective6 of the protection of consumers.3

1The Financial Services Register6 is maintained under section 347 of the Act (The record of authorised persons, etc.) and may be viewed at the FCA's6 website.

1If a group includes more than one firm, a single annual appointed representatives report may be submitted on behalf of all firms in the group. Such a report should contain the information required from all the firms, meet all relevant due dates, indicate all the firms on whose behalf it is submitted and give their Financial Services Register6 firm reference numbers. The requirement to provide a report, and the responsibility for the report remains with each firm in the group. 2

The effect of SUP 16.1.1 R is that this section applies to every firm except:

1. (1)

   an ICVC; or

2. (2)

   a UCITS qualifier; or

3. (2A)

   an AIFM qualifier; or6

4. (3)

   [deleted]12

   4
5. (4)

   a dormant account fund operator.4

Standing data is used by the FCA10 :

1. (1)

   to ensure that a firm is presented with the correct regulatory return when it seeks to report electronically;

2. (2)

   in order to communicate with a firm;

3. (3)

   as the basis for some sections of the Financial Services Register;20 and

   20
4. (4)

   in order to carry out thematic analysis across sectors and groups of firms.

In view of the importance attached to standing data, and the consequences which may result if it is wrong, this section provides the framework for a firm to check and correct it.

5If the FCA's20 information technology systems fail and online submission is unavailable for 24 hours or more, the FCA20 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 16.3.9 R20 should be used.

5Where SUP 16.10.4AR (3) applies to a firm, GEN 1.3.2 R (Emergency) does not apply.

The standing data is made available to the firm when the firm logs into the appropriate section of the FCA's10 website. The firm should check the standing data and send any corrections to the FCA10 . The FCA's10 preferred method of receiving corrections to standing data is by the online forms available at the FCA's10 website.2

A firm may check, and submit corrections to, its standing data more frequently than annually.

1. (1)

   The purpose of this section2 is to set out the requirements for firms in the retail mortgage, investment, consumer credit lending8 and pure protection contract markets specified in SUP 16.11.1 R to report individual product sales data, and to report individual performance data on regulated mortgage contracts,7 to the FCA17. In the case of firms in the sale and rent back market, there is a requirement to record, but not to submit, sales7data.6 These requirements apply6 whether the regulated activity has been carried out by the firm, or through an intermediary which has dealt directly with the firm.

   21776
2. (2)

   The purpose of collecting this data is to assist the FCA17 in the ongoing supervision of firms engaged in retail activities and to enable the FCA17 to gain a wider understanding of market trends in the interests of protecting consumers.

   1717

1. (1)

   A firm may submit a sales 7data report more frequently than required by SUP 16.11.3 R7if it wishes.

   7
2. (2)

   If it is easier and more practical for a firm to submit additional data relating to products other than those specified in SUP 16.11.5 R, it may submit that additional data to the FCA17 in a data report.

   17

Guidance on the type of products covered by SUP 16.11.5 R is contained in SUP 16 Annex 20G.

2Where the manager of an authorised AIF or a UCITS scheme9 receives business from a firm which operates a nominee account, the sales 7data report in respect of those transactions submitted by the manager9 should treat those transactions as transactions undertaken by the manager9 with the firm.

A data report will have been provided to the FCA17 in accordance with SUP 16.11.9 R only if all mandatory data reporting fields (as set out in SUP 16 Annex 21R) have been completed correctly and the report has been accepted by the relevant FCA17 reporting system.

1The effect of SUP 16.1.1 R is that this section applies to every firm carrying on business set out in column (1) of SUP 16.12.4 R except:

1. (1)

   an incoming EEA firm2 with permission for cross border services only;

2. (1A)

   an incoming EEA firm in relation to its carrying on of bidding in emissions auctions;32

3. (2)

   an oil market participant that is not subject to the requirements of IPRU(INV) Chapter 32;

4. (3)

   an authorised professional firm (other than one that must comply with IPRU(INV) 3, 5 or 13 in accordance with IPRU(INV) 2.1.4R,or that is a CASS debt management firm,47 where SUP 16.12.4 R will apply in respect of the business the firm undertakes)3, which must (unless it is within (3A)) 47comply with SUP 16.12.30 R2SUP 16.12.31 R;

   114747
5. (3A)

   an authorised professional firm if the only regulated activity it carries on is credit-related regulated activity as a non-mainstream regulated activity; and47

6. (4)

   a financial conglomerate, which must comply with SUP 16.12.32 R: firms that are members of a financial conglomerate will have their own reporting requirements under SUP 16.12.32 R.

7. (5)

   UK designated investment firms, which must comply with the reporting requirements in the PRA Rulebook.78

1. (1)

   Principle 4 requires firms to maintain adequate financial resources. The Interim Prudential sourcebooks, BIPRU,37GENPRU and IFPRU37 set out the FCA's65 detailed capital adequacy requirements. By submitting regular data, firms enable the FCA65 to monitor their compliance with Principle 4 and their prudential requirements.

   9737979797979737
2. (2)

   The data items submitted help the FCA65 analyse firms' financial and other conditions and performance and to understand their business. By means of further collation and review of the data which the data items provide, the FCA65 also uses the data items to identify developments across the financial services industry and its constituent sectors.

   97979797
3. (3)

   The requirements in this section differ according to a firm'sregulated activity group (RAG), as different information is required to reflect different types of business. Standard formats are used for reporting, to assist10 compatibility between firms which carry on similar types of business. Timely submission is important to ensure the FCA65 has up-to-date information.

   109797

1. (1) 45

   Investment firms subject to the EU CRR should refer to any relevant technical standards to determine their specific reporting obligations, as those obligations may extend beyond those specified in this chapter.

2. (2)

   Where a firm submits a data item pursuant any applicable provision of the EU CRR any data item with the same name and purpose does not have to be submitted again regardless of RAG.

45In relation to an investment firm subject to the EU CRR, where an expression appearing in italics in this chapter is also used in the EU CRR, the italicised expression:

1. (1)

   has the same meaning as the corresponding expression used in the EU CRR; or

2. (2)

   is interpreted in the context of the risk or requirement in the EU CRR that corresponds to the risk or requirement referred to in the italicised expression.

Firms' attention is drawn to SUP 16.3.25 G regarding a single submission for all firms in the group.11

13Reporting at group level for liquidity purposes by firms falling within BIPRU 12 (Liquidity) is by reference to defined liquidity groups. Guidance about the different types of defined liquidity groups and related material is set out in SUP 16 Annex 26 (Guidance on designated liquidity groups in SUP 16.12).

13A member’s76adviser that is also an IFPRU investment firm45will76 fall under one of the higher number RAGs that apply to IFPRU investment firms. That means76 it will have to report76data items in addition to those76 that it has to supply under RAG 2.2.