SYSC 2 and SYSC 3 apply to every firm except that:1

1. (1)

   for an incoming EEA firm or an incoming Treaty firm:

   1. (a)

      SYSC 2.1.1 R and SYSC 2.1.2 G do not apply;

   2. (b)

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

   3. (c)

      SYSC 3 applies, but only in so far as responsibility for the matter in question is not reserved by a European Community instrument to the firm's Home State regulator;

2. (2)

   for an incoming EEA firm which has permission only for cross border services and which does not carry on regulated activities in the United Kingdom, SYSC 2 and SYSC 3 do not apply;1

3. (2A)

   for an incoming Treaty firm which has permission only for cross border services and which does not carry on regulated activities in the United Kingdom, SYSC 3.2.6A R to SYSC 3.2.6J G do not apply;6

4. (3)

   for a sole trader:6

   6
   1. (a)

      SYSC 2 does not apply as long as he does not employ any person who is required to be approved under section 59 of the Act (Approval for particular arrangements);6

   2. (b)

      SYSC 3.2.6I R does not apply if he has no employees;6

5. (4)

   for a UCITS qualifier:

   1. (a)

      SYSC 2.1.1 R and SYSC 2.1.2 G do not apply;

   2. (b)

      SYSC 2.1.3 R to SYSC 2.2.3 G apply, but only in relation to allocation of the function in SYSC 2.1.3 R (2) and only with respect to the activities in SYSC 1.1.4 R;

   3. (c)

      SYSC 3 applies, but only with respect to the activities in SYSC 1.1.4 R;6

      68
6. (5)

   for an authorised professional firm when carrying on non-mainstream regulated activities, SYSC 3.2.6A R to SYSC 3.2.6J G do not apply;86

   810
7. (6)

   for a common platform firm, SYSC 2 and SYSC 3 do not apply8; and108

   810
8. (7)

   SYSC 2 and SYSC 3 do not apply to an incoming ECA provider acting as such.10

SYSC 2 and SYSC 3 apply with respect to the carrying on of:1

1. (1)

   regulated activities;

2. (2)

   activities that constitute dealing in investments as principal, disregarding the exclusion in article 15 of the Regulated Activities Order (Absence of holding out etc); and

3. (3)

   ancillary activities in relation to designated investment business, home finance activity7and insurance mediation activity;64

   76

except that SYSC 3.2.6A R to SYSC 3.2.6J G do not apply as described in SYSC 1.1.3A R.6

6 SYSC 3.2.6A R to SYSC 3.2.6J G do not apply:

1. (1)

   with respect to the activities described in SYSC 1.1.3 R (2) and (3); or

2. (2)

   in relation to the following regulated activities:

   1. (a)

      general insurance business;

   2. (b)

      insurance mediation activity in relation to a general insurance contract or pure protection contract;

   3. (c)

      long-term insurance business which is outside the Consolidated Life Directive (unless it is otherwise one of the regulated activities specified in this rule);

   4. (d)

      business relating to contracts which are within the Regulated Activities Order only because they fall within paragraph (e) of the definition of "contract of insurance" in article 3 of that Order;

   5. (e)
      1. (i)

         arranging, by the Society of Lloyd's, of deals in general insurance contracts written at Lloyd's; and

      2. (ii)

         managing the underwriting capacity of a Lloyd's syndicate as a managing agent at Lloyd's;

         7
   6. (f)

      mortgage mediation activity and administering a regulated mortgage contract;7

   7. (g)

      7home purchase mediation activity and administering a home purchase plan; and

   8. (h)

      7reversion activity.

SYSC 2 and SYSC 3, except SYSC 3.2.6A R to SYSC 3.2.6J G,6 also apply with respect to the communication and approval of financial promotions which:1

1. (1)

   if communicated by an unauthorised person without approval would contravene section 21(1) of the Act (Restrictions on financial promotion); and

2. (2)

   may be communicated by a firm without contravening section 238(1) of the Act (Restrictions on promotion of collective investment schemes).

SYSC 2 and SYSC 3, except SYSC 3.2.6A R to SYSC 3.2.6J G,6 also:

1. (1)

   apply with respect to the carrying on of unregulated activities in a prudential context; and

2. (2)

   take into account any activity of other members of a group of which the firm is a member.3

SYSC 2 and SYSC 3 apply with respect to activities carried on from an establishment maintained by the firm (or its appointed representative or, where applicable, its tied agent) in the United Kingdom unless another applicable rule which is relevant to the activity has a wider territorial scope, in which case SYSC 2 and SYSC 3 apply with that wider scope in relation to the activity described in that rule.1

SYSC 2 and SYSC 3, except SYSC 3.2.6A R to SYSC 3.2.6J G,6 also apply in a prudential context to a UK domestic firm with respect to activities wherever they are carried on.1

SYSC 3 , except SYSC 3.2.6A R to SYSC 3.2.6J G,6 also applies in a prudential context to an overseas firm (other than an incoming EEA firm, incoming Treaty firm or UCITS qualifier) with respect to activities wherever they are carried on.

A contravention of the rules in SYSC 2 and SYSC 3 does not give rise to a right of action by a private person under section 150 of the Act (and each of those rules is specified under section 150(2) of the Act as a provision giving rise to no such right of action).1

1The common platform requirements apply to a common platform firm unless provided otherwise in a specific rule.

1The common platform organisational requirements apply with respect to the carrying on of the following (unless provided otherwise within a specific rule):

1. (1)

   regulated activities;

2. (2)

   activities that constitute dealing in investments as principal, disregarding the exclusion in article 15 of the Regulated Activities Order (Absence of holding out etc);

   2
3. (3)

   ancillary activities; and2

4. (4)

   in relation to MiFID business, ancillary services.2

1 1The provisions on record-keeping in SYSC 9 apply as set out in SYSC 1.3.2 R, except that they only apply to the carrying on of ancillary activities that are performed in relation to:

1. (1)

   designated investment business;

2. (2)

   home finance activity; and

3. (3)

   insurance mediation activity.

1The common platform requirements on financial crime apply as set out in SYSC 1.3.2 R, except that they do not apply:

1. (1)

   with respect to:

   1. (a)

      activities that constitute dealing in investments as principal, disregarding the exclusion in article 15 of the Regulated Activities Order (Absence of holding out etc); and

   2. (b)

      ancillary activities; or

2. (2)

   in relation to the following regulated activities:

   1. (a)

      general insurance business;

   2. (b)

      insurance mediation activity in relation to a general insurance contract or pure protection contract;

   3. (c)

      long-term insurance business which is outside the Consolidated Life Directive (unless it is otherwise one of the regulated activities specified in this rule);

   4. (d)

      business relating to contracts which are within the Regulated Activities Order only because they fall within paragraph (e) of the definition of "contract of insurance" in article 3 of that Order;

   5. (e)
      1. (i)

         arranging by the Society of Lloyd's of deals in general insurance contracts written at Lloyd's; and

      2. (ii)

         managing the underwriting capacity of a Lloyd's syndicate as a managing agent at Lloyd's; and

   6. (f)

      home finance mediation activity and administering a home finance transaction.

1The common platform organisational requirements, except the common platform requirements on financial crime, also apply with respect to the communication and approval of financial promotions which:

1. (1)

   if communicated by an unauthorised person without approval would contravene section 21(1) of the Act (Restrictions on financial promotion); and

2. (2)

   may be communicated by a firm without contravening section 238(1) of the Act (Restrictions on promotion of collective investment schemes).

1The common platform organisational requirements, except the common platform requirements on financial crime, also:

1. (1)

   apply with respect to the carrying on of unregulated activities in a prudential context; and

2. (2)

   take into account any activity of other members of a group of which the firm is a member.

1The common platform requirements, except the common platform record-keeping requirements,2 apply to a common platform firm in relation to activities carried on by it from an establishment in the United Kingdom.

1The common platform requirements, except the common platform requirements on financial crime and the common platform record-keeping requirements,2 apply to a common platform firm in relation to passported activities carried on by it from a branch in another EEA State.

2The common platform record-keeping requirements apply to activities carried on by:

1. (1)

   a common platform firm; or

2. (2)

   an EEA MiFID investment firm;

from an establishment maintained in the United Kingdom, unless another applicable rule which is relevant to the activity has a wider territorial scope, in which case the common platform record-keeping requirements apply with that wider scope in relation to the activity described in that rule.

[Note: article 13(9) of MiFID]

1The common platform organisational requirements, except the common platform requirements on financial crime, also apply in a prudential context to a UK domestic firm with respect to activities wherever they are carried on.

1A contravention of a rule in the common platform requirements does not give rise to a right of action by a private person under section 150 of the Act (and each of those rules is specified under section 150(2) of the Act as a provision giving rise to no such right of action).

A contravention of a rule in SYSC 11 to SYSC 18 does not give rise to a right of action by a private person under section 150 of the Act (and each of those rules is specified under section 150(2) of the Act as a provision giving rise to no such right of action).