Related provisions for TC 2.1.2

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TC 2.1.1RRP
(1) This chapter applies, subject to (2), to every firm to the extent indicated in TC 2.1.4 G, except that:(a) for an incoming EEA firm or an incoming Treaty firm, this chapter applies only in so far as responsibility for any matter it covers is not reserved by a European Community instrument to the firm's Home State regulator; and(b) this chapter applies to a UCITS qualifier only in so far as it is relevant to the manner in which a firm communicates or approves a financial promotion.(2)
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) regulated 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;8

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

(s) providing basic advice on stakeholder products (other than a deposit-based stakeholder product).8

108

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:9

(i) for a money market instrument activity, TC 2 is disapplied as a whole; or9

(ii) otherwise, only TC 2.4, TC 2.5, TC 2.6, and TC 2.8 apply.29

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

9

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).
TC 2.1.5RRP
A contravention of the rules in TC 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).
PERG 8.14.40AGRP
1Article 72 exempts any financial promotion made by an employer to an employee in relation to a group personal pension scheme or a stakeholder pension scheme. This is subject to certain requirements as follows:(1) the financial promotion must inform the employee that the employer will make a contribution to the pension that the employee will receive from the pension scheme to which the financial promotion relates in the event of the employee becoming a member;(2) the employer
PERG 8.14.40BGRP
1Article 73 exempts any financial promotion made by a person in the course of carrying out his duties as an adviser for, or employee of, an advice centre. This is provided the financial promotion relates to:(1) qualifying credit; or(2) rights under, or rights to or interests in rights under, a life policy; or(3) a child trust fund within the meaning of section 1(2) of the Child Trust Funds Act 2004.
LR 9.4.1RRP
(1) This rule applies to the following schemes of a listed company incorporated in the United Kingdom and of any of its major subsidiary undertaking (even if that major subsidiary undertaking is incorporated or operates overseas):(a) an employees' share scheme if the scheme involves or may involve the issue of new shares or the transfer of treasury shares; and(b) a long-term incentive scheme in which one or more directors of the listed company is eligible to participate.(2) The
LR 9.4.2RRP
LR 9.4.1 R does not apply to the following long-term incentive schemes:(1) an arrangement where participation is offered on similar terms to all or substantially all employees of the listed company or any of its subsidiary undertakings whose employees are eligible to participate in the arrangement (provided that all or substantially all employees are not directors of the listed company); and(2) an arrangement where the only participant is a director of the listed company (or an
LR 9.4.4RRP
(1) This rule applies to the grant to a director or employee of a listed company or of any subsidiary undertaking of a listed company of an option to subscribe, warrant to subscribe or other similar right to subscribe for shares in the capital of the listed company or any of its subsidiary undertakings.(2) A listed company must not, without the prior approval by an ordinary resolution of the shareholders of the listed company in a general meeting, grant the option, warrant or
LR 9.4.5RRP
LR 9.4.4 R does not apply to the grant of an option to subscribe, warrant to subscribe or other similar right to subscribe for shares in the capital of a listed company or any of its subsidiary undertakings:(1) under an employees' share scheme if participation is offered on similar terms to all or substantially all employees of the listed company or any of its subsidiary undertakings whose employees are entitled to participate in the scheme; or(2) following a take-over or reconstruction,
LR 8.6.7RRP
A sponsor will be competent to perform the services set out in LR 8.2, LR 8.3 and LR 8.4 if it has a broad range of relevant experience and expertise in providing advice to listed companies and on the listing rules.
LR 8.6.12GRP
A sponsor will generally be regarded as having adequate systems and controls if there are:(1) clear and effective reporting lines;(2) effective systems and controls for the adequate supervision of employees performing any of the services set out in LR 8.2, LR 8.3 and LR 8.4;(3) effective systems and controls to ensure its compliance with all applicable listing rules when performing any of the services set out in LR 8.2, LR 8.3 or LR 8.4;(4) effective systems and controls for
REC 2.5A.2GRP
(1) The purposes of this section are to:(a) provide UK recognised bodies with guidance regarding the provisions of PIDA; and(b) Encourage UK recognised bodies to consider adopting and communicating to workers appropriate internal procedures for handling workers' concerns as part of an effective risk management system.(2) In this section "worker" includes, but is not limited to, an individual who has entered into a contract of employment.
REC 2.5A.4GRP
Under PIDA, any clause or term in an agreement between a worker and his employer is void in so far as it purports to preclude the worker from making a protected disclosure (that is, "blow the whistle").
REC 2.5A.5GRP
In accordance with section 1 of PIDA:(1) a "protected disclosure" is a qualifying disclosure which meets the relevant requirements set out in that section;(2) a "qualifying disclosure" is a disclosure, made in good faith, of information which, in the reasonable belief of the worker making the disclosure, tends to show that one or more of the following (a "failure") has been, is being, or is likely to be, committed:(a) a criminal offence; or(b) a failure to comply with any legal
REC 2.5A.6GRP
(1) UK recognised bodies are encouraged to consider adopting appropriate internal procedures which will encourage their workers with concerns to blow the whistle internally about matters which are relevant to the functions of the FSA.(2) In considering appropriate internal procedures, UK recognised bodiesmay find the guidance provided to firms in SYSC 18.2.2 G (2) and SYSC 18.2.2 G (3)1 helpful.1
PERG 8.12.10GRP
Financial promotions other than unsolicited real time financial promotions are exempt where they follow up an earlier financial promotion which, in compliance with another exemption (such as that for promotions made to high net worth individuals or sophisticated investors – see PERG 8.14.21 G and PERG 8.14.27 G), contains certain indications or information. This is provided the financial promotion:(1) is made by the person who made or directed the earlier financial promotion;(2)
PERG 8.12.21GRP
Financial promotions made only to or directed only at certain types of person who are sophisticated enough to understand the risks involved are exempt. These are:(1) authorised persons;(2) exempt persons (where the financial promotion relates to a controlled activity which is a regulated activity for which the person is exempt);(3) governments and local authorities; and(4) persons whose ordinary business involves carrying on a controlled activity of the kind to which the financial
PERG 8.12.33GRP
The main purpose of the exemption appears to be to guard against the possibility that, during the course of a broadcast interview or a live website presentation, a financial promotion is made inadvertently by a director or employee of a company or other business undertaking when he is not acting in the capacity of a journalist (see PERG 8.12.25 G). The exemption applies if the financial promotion relates only to:(1) shares of the undertaking or of another undertaking in the same
PERG 8.12.34GRP
The exemption applies where the financial promotion:(1) comprises words which are spoken by the director or employee and not broadcast, transmitted or displayed in writing; or(2) is displayed in writing only because it is part of an interactive dialogue to which the director or employee is a party and in the course of which he is expected to respond immediately to questions put by a recipient of the communication.This is provided that the financial promotion is not part of an
PERG 8.12.35GRP
The exemption also requires that the director or employee is identified as such in the financial promotion before it is communicated.
PERG 8.12.37GRP
The second part of the exemption (referred to in PERG 8.12.34G (2)) envisages that the director or employee will be holding the equivalent of a conversation conducted in writing. Typically this will involve the exchange of e-mails. It is possible that this part of the exemption could be used by companies making so-called webcasts over the Internet. However, this would only be the case if the service through which the webcast is provided is a regularly updated news or information
TC 1.1.1RRP
The guidance in this chapter lists some general, high level, commitments which every firm should make and fulfil, except that:(1) for an incoming EEA firm or an incoming Treaty firm, this chapter applies only in so far as responsibility for any matter it covers is not reserved by a European Community instrument to the firm'sHome State regulator; and(2) this chapter applies to a UCITS qualifier only in so far as it is relevant to the manner in which a firm communicates or approves
TC 1.1.3GRP
Principle 3 requires firms to take reasonable care to organise and control their affairs responsibly and effectively. This includes making proper arrangements for any employee associated with a regulated activity carried on by the firm to achieve, maintain and enhance competence.
TC 1.1.4GRP
Principle 3 is amplified in SYSC. A firm must take reasonable care to establish and maintain such systems and controls as are appropriate to its business (SYSC 3.1.1 R and SYSC 4.1.1 R to SYSC 4.1.5 R2). Also, a firm's systems and controls should enable it to satisfy itself of the suitability of anyone who acts for it (SYSC 3.2.13 G and SYSC 5.1.2 G2). This would include the competence of the individual for the role.
SYSC 13.6.1GRP
A firm should consult SYSC 3.2.2 G to SYSC 3.2.5 G for guidance on reporting lines and delegation of functions within a firm and SYSC 3.2.13 G to SYSC 3.2.14 G for guidance on the suitability of employees and appointed representatives. This section provides additional guidance on management of employees and other human resources in the context of operational risk.
SYSC 13.6.2GRP
A firm should establish and maintain appropriate systems and controls for the management of operational risks that can arise from employees. In doing so, a firm should have regard to:(1) its operational risk culture, and any variations in this or its human resource management practices, across its operations (including, for example, the extent to which the compliance culture is extended to in-house IT staff);(2) whether the way employees are remunerated exposes the firm to the
SYSC 13.6.3GRP
A firm should ensure that all employees are capable of performing, and aware of, their operational risk management responsibilities, including by establishing and maintaining:(1) appropriate segregation of employees' duties and appropriate supervision of employees in the performance of their responsibilities (see SYSC 3.2.5 G);(2) appropriate recruitment and subsequent processes to review the fitness and propriety of employees (see SYSC 3.2.13 G and SYSC 3.2.14 G);(3) clear
LR 13.8.11RRP
A circular to shareholders about the approval of an employee's share scheme or long-term incentive scheme must:(1) include either the full text of the scheme or a description of its principal terms;(2) include, if directors of the listed company are trustees of the scheme, or have a direct or indirect interest in the trustees, details of the trusteeship or interest;(3) state that the provisions (if any) relating to:(a) the persons to whom, or for whom, securities, cash or other
LR 13.8.13RRP
The resolution approving the adoption of an employees' share scheme or long-term incentive scheme may authorise the directors to establish further schemes based on any scheme which has previously been approved by shareholders but modified to take account of local tax, exchange control or securities laws in overseas territories, provided that any shares made available under such further schemes are treated as counting against any limits on individual or overall participation in
LR 13.8.14RRP
A circular to shareholders about proposed amendments to an employees' share scheme or a long-term incentive scheme must include:(1) an explanation of the effect of the proposed amendments; and(2) the full terms of the proposed amendments, or a statement that the full text of the scheme as amended will be available for inspection.
SYSC 3.2.3GRP
(1) A firm'sgoverning body is likely to delegate many functions and tasks for the purpose of carrying out its business. When functions or tasks are delegated, either to employees or to appointed representatives, appropriate safeguards should be put in place.(2) When there is delegation, a firm should assess whether the recipient is suitable to carry out the delegated function or task, taking into account the degree of responsibility involved.(3) The extent and limits of any delegation
SYSC 3.2.5GRP
Where it is made possible and appropriate by the nature, scale and complexity of its business, a firm should segregate the duties of individuals and departments in such a way as to reduce opportunities for financial crime or contravention of requirements and standards under the regulatory system. For example, the duties of front-office and back-office staff should be segregated so as to prevent a single individual initiating, processing and controlling transactions.
SYSC 3.2.7GRP
(1) Depending on the nature, scale and complexity of its business, it may be appropriate for a firm to have a separate compliance function. The organisation and responsibilities of a compliance function should be documented. A compliance function should be staffed by an appropriate number of competent staff who are sufficiently independent to perform their duties objectively. It should be adequately resourced and should have unrestricted access to the firm's relevant records as
SYSC 3.2.10GRP
(1) Depending on the nature, scale and complexity of its business, it may be appropriate for a firm to have a separate risk assessment function responsible for assessing the risks that the firm faces and advising the governing body and senior managers on them.(2) The organisation and responsibilities of a risk assessment function should be documented. The function should be adequately resourced and staffed by an appropriate number of competent staff who are sufficiently independent
GEN 4.3.1RRP
A firm must take reasonable care to ensure that every letter (or electronic equivalent) which it or its employees send to a private customer, with a view to or in connection with the firm carrying on a regulated activity, includes the disclosure in GEN 4 Annex 1 R.1
GEN 4.3.3GRP
(1) GEN 4.3.1 R (Disclosure in letters to private customers) covers letters delivered by hand, sent by post and sent by fax and also electronic mail, but not text messages, account statements, business cards or compliment slips (used as such).(2) GEN 4.3.1 R (Disclosure in letters to private customers) applies in relation to letters sent by any of the firm's employees, which includes its appointed representatives and their employees.(3) Firms are likely to find it convenient to
GEN 4.3.6RRP
(1) 1Where a firm has outsourced activities to a third party processor other than advising on life policies3, GEN 4.3.1 R does not apply to that third party processor when acting as such, so long as the outsourcing firm ensures that the third party processor and its employees comply with that rule as if it was the firm and they were employees of the firm.(2) Where an appointed representative has outsourced insurance mediation activities other than advising on life policies3
MIPRU 3.2.4RRP
The contract of professional indemnity insurance must incorporate terms which make provision for:(1) cover in respect of claims for which a firm may be liable as a result of the conduct of itself, its employees and its appointed representatives (acting within the scope of their appointment);(2) the minimum limits of indemnity per year set out in this section;(3) an excess as set out in this section;(4) appropriate cover in respect of legal defence costs;(5) continuous cover in
MIPRU 3.2.5GRP
A firm is responsible for the conduct of all of its employees. The firm'semployees include, but are not limited to, its partners, directors, individuals that are self-employed or operating under a contract hire agreement and any other individual that is employed in connection with its business.
SYSC 13.8.1GRP
The exposure of a firm to operational risk may increase during times of significant change to its organisation, infrastructure and business operating environment (for example, following a corporate restructure or changes in regulatory requirements). Before, during, and after expected changes, a firm should assess and monitor their effect on its risk profile, including with regard to:(1) untrained or de-motivated employees or a significant loss of employees during the period of
SYSC 13.8.2GRP
A firm should establish and maintain appropriate systems and controls for the management of the risks involved in expected changes, such as by ensuring:(1) the adequacy of its organisation and reporting structure for managing the change (including the adequacy of senior management oversight);(2) the adequacy of the management processes and systems for managing the change (including planning, approval, implementation and review processes); and(3) the adequacy of its strategy
SYSC 6.3.7GRP
A common platform firm should ensure that the systems and controls include:(1) appropriate training for its employees in relation to money laundering;(2) appropriate provision of information to its governing body and senior management, including a report at least annually by that firm'smoney laundering reporting officer (MLRO) on the operation and effectiveness of those systems and controls;(3) appropriate documentation of its risk management policies and risk profile in relation
SYSC 6.3.9RRP
A common platform firm must:(1) appoint an individual as MLRO, with responsibility for oversight of its compliance with the FSA'srules on systems and controls against money laundering; and(2) ensure that its MLRO has a level of authority and independence within the firm and access to resources and information sufficient to enable him to carry out that responsibility.