Related provisions for SUP 3.4.5

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SUP 3.10.8BGRP
1The rights and duties of auditors are set out in SUP 3.8 (Rights and duties of all auditors) and SUP 3.10 (Duties of auditors: notification and report on client assets). SUP 3.8.10 G also refers to the auditor's statutory duty to report certain matters to the FSA imposed by regulations made by the Treasury under sections 342(5) and 343(5) of the Act (information given by auditor or actuary to the FSA). An auditor should bear these rights and duties in mind when carrying out client
SUP 3.8.2RRP
An auditor of a firm must cooperate with the FSA in the discharge of its functions under the Act.
SUP 3.8.3GRP
The FSA may ask the auditor to attend meetings and to supply it with information about the firm. In complying with SUP 3.8.2 R, the auditor should attend such meetings as the FSA requests and supply it with any information the FSA may reasonably request about the firm to enable the FSA to discharge its functions under the Act.
SUP 3.8.4RRP
An auditor of a firm must give any skilled person appointed by the firm all assistance that person reasonably requires (see SUP 5 and section 166(5) of the Act (Reports by skilled persons)).
SUP 3.8.8GRP
SUP 3.6.1 R requires a firm to cooperate with its auditor. SUP 3.6.3 G refers to the rights to information which an auditor is granted by the Act. SUP 3.6.4 G refers to similar rights granted by the Companies Act 1985, the Building Societies Act 1986 and the Friendly Societies Act 1992.
SUP 3.8.9GRP
Within the legal constraints that apply, the FSA may pass on to an auditor any information which it considers relevant to his function. An auditor is bound by the confidentiality provisions set out in Part XXIII of the Act (Public record, disclosure of information and cooperation) in respect of confidential information he receives from the FSA. An auditor may not pass on such confidential information without lawful authority, for example if an exception applies under the Financial
SUP 3.8.10GRP
Auditors are subject to regulations made by the Treasury under sections 342(5) and 343(5) of the Act (Information given by auditor or actuary to the FSA). These regulations oblige auditors to report certain matters to the FSA. Sections 342(3) and 343(3) of the Act provide that an auditor does not contravene any duty by giving information or expressing an opinion to the FSA, if he is acting in good faith and he reasonably believes that the information or opinion is relevant to
SUP 3.6.3GRP
Section 341 of the Act (Access to books etc.) provides that an auditor of a firm appointed under SUP 3.3.2 R: (1) has a right of access at all times to the firm's books, accounts and vouchers; and(2) is entitled to require from the firm's officers such information and explanations as he reasonably considers necessary for the performance of his duties as auditor.
SUP 3.6.6GRP
In complying with SUP 3.6.1 R, a firm should take reasonable steps to ensure that each of its appointed representatives gives the firm's auditor the same rights of access to the books, accounts and vouchers of the appointed representative and entitlement to information and explanations from the appointed representative's officers as are given in respect of the firm by section 341 of the Act (see also SUP 12.5.5 R (3)).
SUP 3.6.7GRP
In complying with SUP 3.6.1 R, a firm should take reasonable steps to ensure that each of its suppliers under a material outsourcing arrangement gives the firm's auditor the same rights of access to the books, accounts and vouchers of the firm held by the supplier, and entitlement to information and explanations from the supplier's officers as are given in respect of the firm by section 341 of the Act.
SUP 3.6.9GRP
Firms and their officers, managers and controllers are reminded that, under section 346 of the Act (Provision of false or misleading information to auditor or actuary), knowingly or recklessly giving false information to an auditor appointed under SUP 3.3.2 R constitutes an offence in certain circumstances, which could render them liable to prosecution. This applies even when an auditor is also appointed under an obligation in another enactment.
SUP 3.1.1RRP
This chapter applies to:(1) every firm within a category listed in column (1) of the table in SUP 3.1.2 R; and(2) the external auditor of such a firm (if appointed under SUP 3.3 or appointed under or as a result of a statutory provision other than in the Act);in accordance with column (2) or (3) of that table, except as described in the remainder of this section.2
SUP 3.1.1AGRP
9For the avoidance of doubt, this chapter does not apply to the following firms if they do not hold client money or client assets and do not appoint an auditor under or as a result of a statutory provision other than in the Act: (1) authorised professional firms;(2) energy market participants, including oil market participants to whom IPRU(INV) 3 does not apply;(3) exempt insurance intermediaries;(4) insurance intermediaries not subject to SUP 3.1.2 R(10);(5) investment management
SUP 3.1.2RRP

Applicable sections (see SUP 3.1.1 R)

(1) Category of firm

(2) Sections applicable to the firm

(3) Sections applicable to its auditor

(1)

Authorised professional firm which is required by IPRU(INV) 2.1.2R to comply with chapters 3, 5,10 or 13 of IPRU(INV) and which has an auditor appointed under or as a result of a statutory provision other than in the Act9 (Note 1)

SUP 3.1 - SUP 3.7

SUP 3.1, SUP 3.2, SUP 3.8 - SUP 3.10

(2)

Authorised professional firm not within (1) to which either or both of CASS 2 (Client assets) and CASS 4 (Client money and mandates: designated investment business) applies , unless the firm is regulated by The Law Society (England and Wales), The Law Society of Scotland or The Law Society of Northern Ireland (Note 2)

SUP 3.1 - SUP 3.7

SUP 3.1, SUP 3.2, SUP 3.8, SUP 3.10

(3)

Authorised professional firm not within (1) or (2) which has an auditor appointed under or as a result of a statutory provision other than in the Act

SUP 3.1, SUP 3.2, SUP 3.7

SUP 3.1, SUP 3.2, SUP 3.8

(4)

Bank or building society which in either case carries on designated investment business (Note 2A)

SUP 3.1-SUP 3.7

SUP 3.1, SUP 3.2, SUP 3.8, SUP 3.10

(5)

Bank or building society which in either case does not carry on designated investment business (Note 2A)

SUP 3.1 - SUP 3.7

SUP 3.1, SUP 3.2, SUP 3.8

(5A)

Credit union

SUP 3.1 - SUP 3.7

SUP 3.1, SUP 3.2, SUP 3.8

(5B)

ELMI

SUP 3.1 - SUP 3.7

SUP 3.1, SUP 3.2, SUP 3.8

(6)

Insurer, the Society of Lloyd's, underwriting agent or members' adviser, UK ISPV11 (Note 5)7

SUP 3.1 - SUP 3.7

SUP 3.1, SUP 3.2, SUP 3.8

(7)

Investment management firm, personal investment firm (other than a small personal investment firm), or securities and futures firm (Note 3) which, in each case, has an auditor appointed under or as a result of a statutory provision other than in the Act9

9

SUP 3.1 - SUP 3.7

SUP 3.1, SUP 3.2, SUP 3.8 - SUP 3.10

9(7A)

Investment management firm, personal investment firm (other than a small personal investment firm), or securities and futures firm not within (7) to which either or both of CASS 2 (Client assets) and CASS 4 (Client money and mandates: designated investment business) applies

SUP 3.1 - SUP 3.7

SUP 3.1, SUP 3.2, SUP 3.8, SUP 3.10

9(7B)

UCITS firm13

13

SUP 3.1 - SUP 3.7

SUP 3.1, SUP 3.2, SUP 3.8 - SUP 3.10

13(7C)

BIPRU investment firm or exempt CAD firm

SUP 3.1 - 3.7

SUP 3.1, SUP 3.2, SUP 3.8, SUP 3.1014

(8)

Small personal investment firm or service company which, in either case, has an auditor appointed under or as a result of a statutory provision other than in the Act

SUP 3.1, SUP 3.2, SUP 3.7

SUP 3.1, SUP 3.2, SUP 3.8

(9)8

Home finance provider10 which has an auditor appointed under or as a result of a statutory provision other than in the Act9

10

SUP 3.1 - SUP 3.78

SUP 3.1, SUP 3.2, SUP 3.88

(10)8

Insurance intermediary (other than an exempt insurance intermediary) to which CASS 5 (Client money and mandates) (except for CASS 5.2 (Holding money as agent)) applies (see Note 4)8

SUP 3.1 - SUP 3.78

SUP 3.1, SUP 3.2, SUP 3.8, SUP 3.108

(11)8

Exempt insurance intermediary and insurance intermediary not subject to SUP 3.1.2 R(10) which has an auditor appointed under or as a result of a statutory provision other than in the Act

SUP 3.1, SUP 3.2, SUP 3.78

SUP 3.1, SUP 3.2, SUP 3.88

(12)8

Home finance intermediary10 or home finance administrator10 which has an auditor appointed under or as a result of a statutory provision other than in the Act.

1010

SUP 3.1, SUP 3.2, SUP 3.78

SUP 3.1, SUP 3.2, SUP 3.88

Note 1 = This chapter applies to an authorised professional firm in row (1) (and its auditor) as if the firm were of the relevant type in the right-hand column of IPRU(INV) 2.1.4R.

Note 2 = In row (2):

(a) CASS 2 (Client assets) is treated as applying only if (i) the firm safeguarding and administering investments in connection with managing investments (other than when acting as trustee) or (ii) it safeguarding and administering investments in relation to bonded investments;

(b) CASS 4 (Client money and mandates: designated investment business) is treated as applying only if the firm receives or holds client money other than under an arrangement where commission is rebated to the client;

but, if CASS 2 or CASS 4 is treated as applying, then SUP 3.10 (Duties of auditors: notification and report on client assets) applies to the whole of the business within the scope of CASS 2 or CASS 4.

Note 2A = For this purpose, designated investment business does not include either or both:

(a) dealing which falls within the exclusion in article 15 of the Regulated Activities Order (Absence of holding out etc) (or agreeing to do so); and

(b) dealing in investments as principal (or agreeing to do so):

(i) by a firm whose permission to deal in investments as principal is subject to a limitation to the effect that the firm, in carrying on this regulated activity, is limited to entering into transactions in a manner which, if the firm was an unauthorised person, would come within article 16 of the Regulated Activities Order (Dealing in contractually based investments); and

(ii) in a manner which comes within that limitation;

having regard to article 4(4) of the Regulated Activities Order (Specified activities: general: core investment services by investment firms).

Note 3 = This note applies in relation to an oil market participant to which IPRU(INV) 3 does not apply and in relation to an energy market participant to which IPRU(INV) 3 does not apply. In SUP 3:

(a) only SUP 3.1, SUP 3.2 and SUP 3.7 are applicable to such a firm; and

(b) only SUP 3.1, SUP 3.2 and SUP 3.8 are applicable to its auditor;

and, in each case, only if it has an auditor appointed under or as a result of a statutory provision other than in the Act.

Note 4 = The client money audit requirement in SUP 3.1.2 R(10) therefore applies to all insurance intermediaries except:8

• those which do not hold client money or other client assets in relation to insurance mediation activities; or 8

• those which only hold up to, but not exceeding, £30,000 of client money under a statutory trust arising under CASS 5.3.8

Insurance intermediaries which, in relation to insurance mediation activities, hold no more than that amount of client money only on a statutory trust are exempt insurance intermediaries.8

Note (5) = In row (6):7

(a)7

SUP 3.1 - SUP 3.7 applies to a managing agent in respect of its own business and in respect of the insurance business of each syndicate which it manages; and7

(b)7

SUP 3.1, SUP 3.2 and SUP 3.8 apply to the auditors of a managing agent and the auditors of the insurance business of each syndicate which the managing agent manages.1234567
SUP 3.3.7RRP
(1) Paragraph (2) applies to a firm which is not under an obligation to appoint an auditor imposed by an enactment other than the Act.(2) If a firm fails to appoint an auditor within 28 days of a vacancy arising, the FSA may appoint an auditor for it on the following terms:(a) the auditor to be remunerated by the firm on the basis agreed between the auditor and firm or, in the absence of agreement, on a reasonable basis; and(b) the auditor to hold office until he resigns or the
SUP 3.4.6GRP
If it appears to the FSA that an auditor of a firm has failed to comply with a duty imposed on him under the Act, it may disqualify him under section 345 of the Act. For more detail about what happens when the disqualification of an auditor is being considered or put into effect, see EG 151. A list of persons who are disqualified by the FSA under section 345 of the Act may be found on the FSA website (www.fsa.gov.uk).1
SUP 3.2.2GRP
The Act, together with other legislation such as the Companies Acts 1985, 1989 and 20067, the Building Societies Act 1986 and the Friendly Societies Act 1992, provides the statutory framework for firms' and auditors' obligations. 7
SUP 3.2.6GRP
4The rights and duties of auditors are set out in SUP 3.8 (Rights and duties of all auditors) and SUP 3.10 (Duties of auditors: notification and report on client assets). SUP 3.8.10 G includes the auditor's statutory duty to report certain matters to the FSA imposed by regulations made by the Treasury under sections 342(5) and 343(5) of the Act (information given by auditor or actuary to the FSA). An auditor should bear these rights and duties in mind when carrying out client
DEPP 2.5.18GRP
Some of the distinguishing features of notices given under enactments other than the Act are as follows: (1) Building Societies Act 1986, section 36A: There is no right to refer a decision to issue a prohibition order under section 36A to the Tribunal. Accordingly, a decision notice under section 36A(5A) is not required to give an indication of whether any such right exists. A decision notice under section 36A(5A) may only relate to the issue of a prohibition order under section
SUP 4.5.7GRP
Actuaries appointed under this chapter2 are subject to regulations made by the Treasury under section 342(5) and 343(5) of the Act (Information given by auditor or actuary to the Authority). These regulations oblige actuaries to report certain matters to the FSA. Sections 342(3) and 343(3) of the Act provide that an actuary does not contravene any duty by giving information or expressing an opinion to the FSA, if he is acting in good faith and he reasonably believes that the information
COND 2.5.6GRP
In determining whether a firm will satisfy, and continue to satisfy, threshold condition 5 in respect of conducting its business with integrity and in compliance with proper standards, the relevant matters, as referred to in COND 2.5.4 G (2), may include but are not limited to whether:(1) the firm has been open and co-operative in all its dealings with the FSA and any other regulatory body (see Principle 11 (Relations with regulators)) and is ready, willing and organised to comply
SUP 12.5.3GRP
A firm should satisfy itself that the terms of the contract with its appointed representative (including an introducer appointed representative):(1) are designed to enable the firm to comply properly with any limitations or requirements on its own permission;(2) require the appointed representative to cooperate with the FSA as described in SUP 2.3.4 G (Information gathering by the FSA on its own initiative: cooperation by firms) and give access to its premises, as described in
SYSC 13.9.5GRP
In negotiating its contract with a service provider, a firm should have regard to:(1) reporting or notification requirements it may wish to impose on the service provider;(2) whether sufficient access will be available to its internal auditors, external auditors or actuaries (see section 341 of the Act) and to the FSA (see SUP 2.3.5 R (Access to premises) and SUP 2.3.7 R (Suppliers under material outsourcing arrangements);(3) information ownership rights, confidentiality agreements