Related provisions for APER 4.5.13

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FIT 1.3.3GRP
The criteria listed in FIT 2.1 to FIT 2.3 are guidance and will be applied in general terms when the FSA is determining a person's fitness and propriety. It would be impossible to produce a definitive list of all the matters which would be relevant to a particular determination.
FIT 1.3.4GRP
If a matter comes to the FSA's attention which suggests that the person might not be fit and proper, the FSA will take into account how relevant and how important it is.
REC 2.5.3GRP
In assessing whether the systems and controls used by a UK recognised body in the performance of its relevant functions are adequate and appropriate for the scale and nature of its business, the FSA may have regard to the UK recognised body's:(1) arrangements for managing, controlling and carrying out its relevant functions, including: (a) the distribution of duties and responsibilities among its key individuals and the departments of the UK recognised body responsible for performing
REC 2.5.15GRP
The FSA may also have regard to the contracts of employment, staff rules, letters of appointment for members of the governing body, members of relevant committees and other key individuals and other guidance given to individuals on handling conflicts of interest. Guidance to individuals may need to cover:(1) the need for prompt disclosure of a conflict of interest to enable others, who are not affected by the conflict, to assist in deciding how it should be managed;(2) the circumstances
REC 2.5.16GRP
The FSA may also have regard to the arrangements made:(1) for enforcing rules or other provisions applicable to staff and other persons involved in regulatory decisions; and(2) to keep records of disclosures of conflicts of interest and the steps taken to handle them.
REC 2.5.17GRP
A UK recognised body's arrangements for internal and external audit will be an important part of its systems and controls. In assessing the adequacy of these arrangements, the FSA may have regard to: (1) the size, composition and terms of reference of any audit committee of the UK recognised body'sgoverning body;(2) the frequency and scope of external audit; (3) the provision and scope of internal audit; (4) the staffing and resources of the UK recognised body's internal audit
TC 2.1.3GRP
The table in TC 2.1.4 G sets out the activities to which TC 2 applies.
TC 2.1.4GRP

Activities to which TC 2 applies.

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Activity

Extent of Application

1. Employees engaging in:

Advising and dealing

(a) advising on investments which are, and dealing with or for clients in, securities (other than stakeholder pension schemes or broker funds) and derivatives;

(b) advising on investments which are, and dealing with or for clients in, securities (other than stakeholder pension schemes or broker funds) only;

(c) advising on investments which are, and dealing with or for clients in, derivatives only;

Managing

(d) managing investment;

(e) managing investments in relation to venture capital investments only;

Advising (without dealing)

(f) advising on investments which are packaged products (other than broker fund or as in (g), (h) or (ha));4

(g) advising on investments which are friendly society tax exempt policies only;

(h) advising on investments which are packaged products (where the employee sells only life policies issued by a friendly society and is not reasonably expected to receive remuneration of more than £1,000 a year in respect of such sales);

(ha) advising on investments which are long-term care insurance contracts;4

(i) advising on investments in the course of corporate finance business only;

(j) advising on investments which are (but not dealing in) securities (other than stakeholder pension schemes or broker funds) and derivatives;

(k) advising on investments which are (but not dealing in) securities (other than stakeholder pension schemes or broker funds) only;

(l) advising on investments which are (but not dealing in) derivatives only;

(m) the activity of a broker fund adviser;

(n) advising on syndicate participation at Lloyd's;

(o) the activity of a pension transfer specialist.

(p) advising a customer on a:3

(i) regulated mortgage contract (other than a regulated lifetime mortgage contract) or a regulated mortgage contract that is for a business purpose; and23

(ii) aregulated lifetime mortgage contract.23

Non-advised sales

(q) designing scripted questions for use in sales to customers of regulated lifetime mortgage contracts which do not involve personal recommendations2.

(r) advising on investments which are non-investment insurance contracts26

1. In relation to designated investment business:2

(a) if the activity is carried on with or for a private customer, whole of TC 2 applies;2

(b) if the activity is carried on with or for an intermediate customer or a market counterparty only TC 2.4, TC 2.5, TC 2.6, and TC 2.8 apply.2

2. In relation to regulated mortgage activities2, whole of TC 2 applies.2

3. In relation to advising on investments which are non-investment insurance contracts if the activity is carried on with or for a retail customer (see ICOB), the whole of TC 2 applies, except for TC 2.5, as if in TC 2.2, TC 2.3, TC 2.4 and TC 2.7 each reference to private customer were a reference to retail customer.6

2

2. Employees overseeing on a day-to-day basis:

(a) operating, or acting as a trustee or depositary of, a collective investment scheme;

(b) safeguarding and administering investments or holding of client money (unless held in the course of carrying on a mortgage mediation activity2, or an insurance mediation activity only in relation to a non-investment insurance contract6);

(c) the following administrative functions in relation to managing investments:

(i) arranging settlement;

(ii) monitoring and processing corporate actions;

(iii) client account administration, liaison and reporting, including valuation and performance measurement;

(iv) ISA, PEP or CTF administration;7

(v) investment trust savings scheme administration;

(d) the following administrative functions in relation to the effecting or carrying out of life policies:

(i) new business administration;

(ii)policy alterations, including surrenders and policy loans;

(iii) preparingprojections;

(iv) processing claims, including pension payments;

(v) fund switching;

(e) taking private customers through decision trees in connection with a stakeholder pension scheme;

(f) the following administrative functions in relation to the operation of a stakeholder pension scheme:

(i) new business administration;

(ii) receipt of or alteration to contributions;

(iii) preparing projections and annual statements;

(iv) administration of transfers;

(v) handling claims, including pension payments;

(vi) fund allocation and switching.

(g) the sales tocustomersof2regulated lifetime mortgage contractswhich do not involvepersonal recommendations.2

Whole of TC 2applies exceptTC 2.7 (Supervising).
APER 4.5.9ERP
Behaviour of the type referred to in APER 4.5.8 E includes, but is not limited to:(1) failing to review the competence, knowledge, skills and performance of staff to assess their suitability to fulfil their duties, despite evidence that their performance is unacceptable (see APER 4.5.14 G);(2) giving undue weight to financial performance when considering the suitability or continuing suitability of an individual for a particular role (see APER 4.5.14 G);(3) allowing managerial
APER 4.5.15GRP
In organising the business, the approved person performing a significant influence function should pay attention to any temporary vacancies which exist (see APER 4.5.9 E (3)). He should take reasonable steps to ensure that suitable cover for responsibilities is arranged. This could include taking on temporary staff or external consultants. The approved person performing a significant influence function should assess the risk that is posed to compliance with the requirements and
APER 4.6.8ERP
Failing to supervise and monitor adequately the individual or individuals (whether in-house or outside contractors) to whom responsibility for dealing with an issue or authority for dealing with a part of the business has been delegated falls within APER 4.6.2 E.
APER 4.6.9ERP
Behaviour of the type referred to in APER 4.6.8 E includes, but is not limited to:(1) failing to take personal action where progress is unreasonably slow, or where implausible or unsatisfactory explanations are provided;(2) failing to review the performance of an outside contractor in connection with the delegated issue or business.
FIT 2.3.2GRP
The FSA will not normally require the candidate to supply a statement of assets or liabilities. The fact that a person may be of limited financial means will not, in itself, affect his suitability to perform a controlled function.
SYSC 4.2.2RRP
(1) Firms are encouraged to consider adopting (and encouraged to invite their appointed representatives to consider adopting) appropriate internal procedures which will encourage workers with concerns to blow the whistle internally about matters which are relevant to the functions of the FSA.(2) Smaller firms may choose not to have as extensive procedures in place as larger firms. For example, smaller firms may not need written procedures. The following is a list of things that