SYSC TP 8 Bank of England and Financial Services Act 2016: Application to claims management companies

18.1.1

R

Subject to SYSC TP 8.1.2R, SYSC TP 8 applies to a firm if it met the following conditions on the general solo firms’ commencement date:

(1)

the only regulated activities in its permission were regulated claims management activities;

(2)

it still had a claims management temporary permission; and

(3)

it would have been an SMCR firm but for SYSC TP 8.2.1R.

18.1.2

R

SYSC TP 8.1.1R does not apply to SYSC TP 8.6.1R. Instead, SYSC TP 8.6.1R sets out the firms to which it applies.

18.1.3

G

SYSC TP 8:

(1)

deals with the application of certain aspects of the senior managers and certification regime to claims management firms brought into regulation under the Act by the Claims Management Order in April 2019;

(2)

explains how the transitional provisions in SYSC TP 7 (Bank of England and Financial Services Act 2016: Certification and regulatory references) are amended for certain claims management firms;

(3)

in particular, describes a transition period (the individual transitional period) that applies for the purposes of the certification regime in place of the one described in SYSC TP 7; and

(4)

has certain other transitional provisions relating to the application of the senior managers and certification regime to claims management firms.

18.1.4

R

The terms in the first column of the table in SYSC TP 8.1.5R, where they appear in bold in SYSC TP 8, have the meaning in the corresponding row of column 2 for the purposes of SYSC TP 8.

18.1.5

R

Table: glossary of bespoke terms used in SYSC TP 8

Defined term

Meaning

general solo firms’ commencement date

9 December 2019

individual transitional period

the one-year period referred to in regulation 3(2) of the solo-regulated firms’ commencement SI.

If a firm’s permission is varied to include regulated activities in addition to regulated claims management activities, it means the shorter period (if any) provided for by regulations 3(2) and 3(3) of the solo-regulated firms’ commencement SI.

solo-regulated firms’ commencement SI

The Bank of England and Financial Services Act 2016 (Commencement No. 6 and Transitional Provisions) Regulations 2019 (SI 1136/2019)

18.2.1

R

A firm is not an SMCR firm (and is included in Part Three of SYSC 23 Annex 1 (Definition of exempt firm)) for as long as

(1)

the only regulated activities in its permission are regulated claims management activities; and

(2)

it only has a claims management temporary permission.

18.3.1

G

The effect of the solo-regulated firms’ commencement SI is that the obligation in section 63E(1) of the Act, for an SMCR firm to take reasonable care to ensure that no employee of the firm performs an FCA certification function unless the firm has issued the employee with a valid certificate, does not apply during its individual transitional period.

18.3.2

G

(1)

A firm’s individual transitional period is the period that:

(a)

begins on (and includes) the date on which the firm’s claims management temporary permission comes to an end under the Claims Management Order and the firm’s full authorisation for regulated claims management activities comes into effect; and

(b)

ends on (and excludes) the day falling one year later.

(2)

If other activities are included in a firm’s permission part of the way through the one-year period in (1), its individual transitional period ends at once.

(3)

If other activities are included in a firm’s permission before it receives full authorisation for its regulated claims management activities, the transitional arrangements described in SYSC TP 8 do not apply and the firm will have no individual transitional period. However, the transitional arrangements in SYSC TP 7 (Bank of England and Financial Services Act 2016: Certification and regulatory references) will still apply if it is authorised before 9 December 2020.

8.3.3

R

During a firm’s individual transitional period the definition of “certification employee” is amended to mean an employee (as defined in section 63E of the Act) of the firm who performs a certification function under an arrangement entered into by the firm in relation to the carrying on by the firm of a regulated activity, even though the obligation of the SMCR firm to issue a certificate under section 63F of the Act does not yet apply to the firm.

18.4.1

R

SYSC TP 7 (Bank of England and Financial Services Act 2016: Certification and regulatory references) applies to a firm with the adjustments set out in this section.

18.4.2

R

A reference in SYSC TP 7 to the “certification transitional period” is a reference to a firm’s individual transitional period.

18.4.3

R

(1)

A reference in SYSC TP 7 to the “general commencement date” is a reference to the start of a firm’s individual transitional period, except in the following provisions:

(a)

SYSC TP 7.4.6R (Giving references); and

(b)

SYSC TP 7.4.7G (Form of references).

(2)

The definition of “general commencement date” is unchanged in the provisions listed in (1)(a) and (b).

18.4.4

G

SYSC TP 8.3.1G applies in place of SYSC TP 7.2.1G (Certification: The certification transitional period).

18.4.5

G

SYSC TP 7.4.8R (Transitional provisions about regulatory references) and SYSC TP 7.5 (Transitional provisions about benchmarks and the certification regime) are not relevant.

18.4.6

G

SYSC TP 7.7 (Qualification conditions for FCA-authorised firms) is not relevant as it covers firms that are SMCR firms on the general solo firms’ commencement date.

18.5.1

R

The provisions of SYSC 22 (Regulatory references), except those listed in SYSC 22.8.4R, apply to a firm excluded from being an SMCR firm by SYSC TP 8.2.1R as they apply to an SMCR firm.