Related provisions for SUP 18.3.5

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LR 5.5.3GRP
(1) The FSA will not automatically suspend, cancel or restore the listing of securities at the request of an overseas exchange or overseas authority (for example, if listing of a secondary listedissuer'ssecurities are suspended, cancelled or restored on its home exchange).(2) The FSA will not normally suspend the listing of securities where there is a trading halt for the security on its home exchange.(3) If a secondary listed issuer requests a suspension, cancellation or restoration
SUP 3.5.4GRP
The FSA will regard an auditor as independent if his appointment or retention does not breach the ethical guidance in current issue from the auditor's recognised supervisory body on the appointment of an auditor in circumstances which could give rise to conflicts of interest.
SUP 14.4.1GRP
(1) Regulation 7 to 9 of the Financial Services and Markets Act 2000 (Services of Notices) Regulations 2001 (SI2001/1420) govern the manner in which notices may be submitted to the FSA under the EEA Passport Rights Regulations. In summary, they should be delivered or posted to the FSA's address (See (2) below) and will be treated as given when received by the FSA. They should not be sent by fax or electronic mail. (2) The address for notices is: The Passport Notifications Unit,
SUP 14.5.1GRP
Where an incoming EEA firm has been granted top-up permission by the FSA and wishes to vary that permission, the Act requires it to apply to the FSA for a variation of the top-up permission. 1
REC 3.19.1RRP
Where a UK recognised body becomes aware that a person has been appointed by any regulatory body (other than the FSA or a UK recognised body) to investigate:(1) any business transacted by means of its facilities, if it is an RIE; or(2) any aspect of the clearing services which it provides;it must immediately give the FSA notice of that event.
SUP 14.8.1GRP
For further guidance on passporting procedures, an incoming EEA firm should contact the FSA's Passport Notifications Unit or their usual supervisory contact at the FSA. Incoming Treaty firms and UCITS qualifiers should speak to their usual supervisory contact at the FSA in the first instance
COLL 5.2.10RRP
(1) A market is eligible for the purposes of the rules in this sourcebook if it is:(a) a regulated market;(b) a market in an EEA State which is regulated, operates regularly and is open to the public; or(c) any market within (2).(2) A market not falling within (1)(a) and (b) is eligible for the purposes of the rules in this sourcebook if:(a) the authorised fund manager, after consultation with and notification to the depositary (and in the case of an ICVC, any other directors),
BIPRU 4.10.8GRP
(1) Under paragraph 16 of Part 1 of Annex VIII of the Banking Consolidation Directive, a competent authority may only disapply the condition in BIPRU 4.10.6 R (3) if the competent authority has evidence that the relevant market is well-developed and long-established with loss-rates which are sufficiently low to justify such action.(2) If the evidence were to change so that the action was no longer justified the FSA would expect to revoke BIPRU 4.10.7 R.
BIPRU 4.10.17GRP
If a firm wishes to recognise other types of collateral in accordance with BIPRU 4.10.16 R (whether as part of its application for an IRB permission or under a variation of its IRB permission) it should demonstrate to the FSA how the criteria in BIPRU 4.10.16 R (1) - BIPRU 4.10.16 R (3) have been met with respect to that type of collateral.
BIPRU 5.4.16RRP
A firm must not use both the financial collateral simple method and the financial collateral comprehensive method.[Note:BCD Annex VIII Part 3 point 24 (part)]
BIPRU 5.4.55GRP
The FSA may also require a firm to calculate its volatility adjustments using a shorter observation period if, in the FSA's judgement, this is justified by a significant upsurge in price volatility.
DTR 5.8.2RRP
(1) A notification required of voting rights arising from the holding of financial instruments must include the following information:(a) the resulting situation in terms of voting rights;(b) if applicable, the chain of controlled undertakings through which financial instruments are effectively held;(c) the date on which the threshold was reached or crossed;(d) for instruments with an exercise period, an indication of the date or time period where shares will or can be acquired,
PRIN 3.4.5RRP
Where Principle 11 refers to regulators, this means, in addition to the FSA, other regulators with recognised jurisdiction in relation to regulated activities, whether in the United Kingdom or abroad.
REC 2.9.3GRP
In determining whether a UK recognised body has satisfactory arrangements for recording the transactions effected on, or cleared or to be cleared by means of, its facilities, the FSA may have regard to:(1) whether the UK recognised body has arrangements for creating, maintaining and safeguarding an audit trail of transactions for at least three years (five years in respect of transactions carried out by members who are not incorporated in the United Kingdom if the UK recognised
DTR 5.1.4RRP
(1) References to a market maker are to a market maker which:(a) (subject to (3) below) is authorised by its Home State under MiFID;(b) does not intervene in the management of the issuer concerned; and (c) does not exert any influence on the issuer to buy such shares or back the share price.[Note: articles 9(5) and 9(6) of the TD](2) A market maker relying upon the exemption for shares held by it in that capacity must notify the competent authority of the Home Member State of
SYSC 13.7.9GRP
Operating processes and systems at separate geographic locations may alter a firm's operational risk profile (including by allowing alternative sites for the continuity of operations). A firm should understand the effect of any differences in processes and systems at each of its locations, particularly if they are in different countries, having regard to:(1) the business operating environment of each country (for example, the likelihood and impact of political disruptions or
SYSC 2.1.6GRP

Frequently asked questions about allocation of functions in SYSC 2.1.3 R

This table belongs to SYSC 2.1.5 G

Question

Answer

1

Does an individual to whom a function is allocated under SYSC 2.1.3 R need to be an approved person?

An individual to whom a function is allocated under SYSC 2.1.3 R will be performing the apportionment and oversight function (CF 8, see SUP 10.7.1 R) and an application must be made to the FSA for approval of the individual before the function is performed under section 59 of the Act (Approval for particular arrangements). There are exceptions from this in SUP 10.1 (Approved persons - Application). In particular, an incoming EEA firm is referred to the EEA investment business oversight function (CF 9, see SUP 10.7.6 R).

2

If the allocation is to more than one individual, can they perform the functions, or aspects of the functions, separately?

If the functions are allocated to joint chief executives under SYSC 2.1.4 R, column 2, they are expected to act jointly. If the functions are allocated to an individual under SYSC 2.1.4 R, column 2, in addition to individuals under SYSC 2.1.4 R, column 3, the former may normally be expected to perform a leading role in relation to the functions that reflects his position. Otherwise, yes.

3

What is meant by "appropriately allocate" in this context?

The allocation of functions should be compatible with delivering compliance with Principle 3, SYSC 2.1.1 R and SYSC 3.1.1 R. The FSA considers that allocation to one or two individuals is likely to be appropriate for most firms.

4

If a committee of management governs a firm or group, can the functions be allocated to every member of that committee?

Yes, as long as the allocation remains appropriate (see Question 3).If the firm also has an individual as chief executive, then the functions must be allocated to that individual as well under SYSC 2.1.4 R, column 2 (see Question 7).

5

Does the definition of chief executive include the possessor of equivalent responsibilities with another title, such as a managing director or managing partner?

Yes.

6

Is it possible for a firm to have more than one individual as its chief executive?

Although unusual, some firm may wish the responsibility of a chief executive to be held jointly by more than one individual. In that case, each of them will be a chief executive and the functions must be allocated to all of them under SYSC 2.1.4 R, column 2 (see also Questions 2 and 7).

7

If a firm has an individual as chief executive, must the functions be allocated to that individual?

Normally, yes, under SYSC 2.1.4 R, column 2.

But if the firm is a body corporate and a member of a group, the functions may, instead of to the firm's chief executive, be allocated to a director or senior manager from the group responsible for the overall management of the group or of a relevant group division, so long as this is appropriate (see Question 3). Such individuals willnevertheless require approval by the FSA (see Question 1).

If the firm chooses to allocate the functions to a director or senior manager responsible for the overall management of a relevant group division, the FSA would expect that individual to be of a seniority equivalent to or greater than a chief executive of the firm for the allocation to be appropriate.

See also Question 14.

8

If a firm has a chief executive, can the functions be allocated to other individuals in addition to the chief executive?

Yes. SYSC 2.1.4 R, column 3, permits a firm to allocate the functions, additionally, to the firm's (or where applicable the group's) directors and senior managers as long as this is appropriate (see Question 3).

9

What if a firm does not have a chief executive?

Normally, the functions must be allocated to one or more individuals selected from the firm's (or where applicable the group's) directors and senior managers under SYSC 2.1.4 R, column 3.

But if the firm:

(1) is a body corporate and a member of a group; and

(2) the group has a director or senior manager responsible for the overall management of the group or of a relevant group division;

then the functions must be allocated to that individual (together, optionally, with individuals from column 3 if appropriate) under SYSC 2.1.4 R, column 2.2

10

What do you mean by "group division within which some or all of the firm's regulated activities fall"?

A "division" in this context should be interpreted by reference to geographical operations, product lines or any other method by which the group's business is divided.

If the firm's regulated activities fall within more than one division and the firm does not wish to allocate the functions to its chief executive, the allocation must, under SYSC 2.1.4 R, be to:

(1) a director or senior manager responsible for the overall management of the group; or

(2) a director or senior manager responsible for the overall management of one of those divisions;

together, optionally, with individuals from column 3 if appropriate. (See also Questions 7 and 9.)

11

How does the requirement to allocate the functions in SYSC 2.1.3R apply to an overseas firm which is not an incoming EEA firm, incoming Treaty firm or UCITS qualifier?

The firm must appropriately allocate those functions to one or more individuals, in accordance with SYSC 2.1.4 R, but:

(1) The responsibilities that must be apportioned and the systems and controls that must be overseen are those relating to activities carried on from a UK establishment with certain exceptions (see SYSC 1.1.7 R). Note that SYSC 1.1.10 R does not extend the territorial scope of SYSC 2 for an overseas firm.

(2) The chief executive of an overseas firm is the person responsible for the conduct of the firm's business within the United Kingdom (see the definition of "chief executive"). This might, for example, be the manager of the firm's UK establishment, or it might be the chief executive of the firm as a whole, if he has that responsibility.

The apportionment and oversight function applies to such a firm, unless it falls within a particular exception from the approved persons regime (see Question 1).

12

How does the requirement to allocate the functions in SYSC 2.1.3R apply to an incoming EEA firm or incoming Treaty firm?

SYSC 1.1.1 R (2) and SYSC 1.1.7 R restrict the application of SYSC 2.1.3 R for such a firm. Accordingly:

(1) Such a firm is not required to allocate the function of dealing with apportionment in SYSC 2.1.3 R (1).

(2) Such a firm is required to allocate the function of oversight in SYSC 2.1.3 R (2). However, the systems and controls that must be overseen are those relating to matters which the FSA, as Host State regulator, is entitled to regulate (there is guidance on this in SYSC App 1). Those are primarily, but not exclusively, the systems and controls relating to the conduct of the firm's activities carried on from its UK branch.

(3) Such a firm need not allocate the function of oversight to its chief executive; it must allocate it to one or more directors and senior managers of the firm or the firm's group under SYSC 2.1.4 R, row (2).

(4) An incoming EEA firm which has provision only for cross border services is not required to allocate either function if it does not carry on regulated activities in the United Kingdom; for example if they fall within the overseas persons exclusions in article 72 of the Regulated Activities Order.

See also Questions 1 and 15.1

13

What about a firm that is a partnership or a limited liability partnership?

The FSA envisages that most if not all partners or members will be either directors or senior managers, but this will depend on the constitution of the partnership (particularly in the case of a limited partnership) or limited liability partnership. A partnership or limited liability partnership may also have a chief executive (see Question 5). A limited liability partnership is a body corporate and, if a member of a group, will fall within SYSC 2.1.4 R, row (1) or (2).

14

What if generally accepted principles of good corporate governance recommend that the chief executive should not be involved in an aspect of corporate governance?

The Note to SYSC 2.1.4 R provides that the chief executive or other executive director or senior manager need not be involved in such circumstances. For example, the Combined Code developed by the Committee on Corporate Governancerecommends that the board of a listed company should establish an audit committee of non-executive directors to be responsible for oversight of the audit. That aspect of the oversight function may therefore be allocated to the members of such a committee without involving the chief executive. Such individuals may require approval by the FSA in relation to that function (see Question 1).

15

What about incoming electronic commerce activities?

ECO 1.1.6 R has the effect that SYSC does not apply to an incoming ECA provider acting as such.1
SUP 15.7.9GRP
Firms wishing to communicate with the FSA by electronic mail or fax should obtain the appropriate address or number from the FSA