SYSC 3.1 Systems and Controls

1. (1)

   The nature and extent of the systems and controls which a firm will need to maintain under SYSC 3.1.1 R will depend upon a variety of factors including:

   1. (a)

      the nature, scale and complexity of its business;

   2. (b)

      the diversity of its operations, including geographical diversity;

   3. (c)

      the volume and size of its transactions; and

   4. (d)

      the degree of risk associated with each area of its operation.

2. (2)

   To enable it to comply with its obligation to maintain appropriate systems and controls, a firm should carry out a regular review of them.

3. (3)

   The areas typically covered by the systems and controls referred to in SYSC 3.1.1 R are those identified in SYSC 3.2. Detailed requirements regarding systems and controls relevant to particular business areas or particular types of firm are covered elsewhere in the Handbook.

5Firms should also consider the additional guidance on risk-centric governance arrangements for effective risk management contained in SYSC 21.

Where the UK Corporate Governance Code 4 is relevant to a firm, the appropriate regulator, in considering whether the firm's obligations under SYSC 3.1.1 R have been met, will give it due credit for following corresponding provisions in the code4 and related guidance.

A firm has specific responsibilities regarding its appointed representatives or, where applicable, its tied agents3 (see SUP 12).

SYSC 2.1.3 R (2) prescribes how a firm must allocate the function of overseeing the establishment and maintenance of systems and controls described in SYSC 3.1.1 R.

2The Training and Competence sourcebook (TC) contains additional rules and guidance relating to specified retail activities undertaken by a firm.

2Firms which are carrying on activities that are not subject to TC may nevertheless wish to take TC into account in complying with the competence requirements in SYSC.

2If a firm requires employees who are not subject to a qualification 7 requirement in TC7 to pass a relevant examination from the list of recommended examinations maintained by the Financial Skills Partnership7, the appropriate regulator will take that into account when assessing whether the firm has ensured that the employee satisfies the knowledge component of the competent employees rule.