Related provisions for GEN 1.1.2
1 - 20 of 388 items.
In addition to the general factors outlined in DEPP 6.2.1 G, there are some additional considerations that may be relevant when deciding whether to take action against an approved person pursuant to section 66 of the Act. This list of those considerations is non-exhaustive. Not all considerations below may be relevant in every case, and there may be other considerations, not listed, that are relevant.(1) The approved person's position and responsibilities. The FSA may take into
The primary responsibility for ensuring compliance with Part VI of the Act, the Part 6 rules, the prospectus rules or a provision otherwise made in accordance with the Prospectus Directive or a requirement imposed under such provision rests with the persons identified in section 91(1) and section 91(1A) (Penalties for breach of Part 6 rules) of the Act respectively. Normally therefore, any disciplinary action taken by the FSA for contraventions of these obligations will in the
However, in the case of a contravention by a person referred to in section 91(1)(a) or section 91(1)(b)(i) or section 91(1A) of the Act ("P"), where the FSA considers that another person who was at the material time a director of P was knowingly concerned in the contravention, the FSA may take disciplinary action against that person. In circumstances where the FSA does not consider it appropriate to seek a disciplinary sanction against P (notwithstanding a breach of relevant requirements
The Principles are set out in PRIN 2.1.1 R. The Principles are a general statement of the fundamental obligations of firms under the regulatory system. The Principles derive their authority from the FSA's rule-making powers set out in section 138(General rule-making power) of the Act. A breach of a Principle will make a firm liable to disciplinary action. Where the FSA considers this is appropriate, it will discipline a firm on the basis of the Principles alone.
The Listing Principles are set out in LR 7. The Listing Principles are a general statement of the fundamental obligations of listed companies. The Listing Principles derive their authority from the FSA's rule making powers set out in section 73A(1) (Part 6 Rules) of the Act. A breach of a Listing Principle will make a listed company liable to disciplinary action by the FSA.
In any case where the FSA considers that the use of its powers under any of sections 123, 129, 381, 383 or 384 of the Act may be appropriate, if that use may affect the timetable or outcome of a takeover bid or where it is appropriate in the context of any exercise by the Takeover Panel of its powers and authority, the FSA will consult the Takeover Panel before using any of those powers.
FSA staff under executive procedures will take the decision to give a warning notice if the FSA proposes to:(1) refuse an application for a Part IV permission or to refuse an application to cancel a Part IV permission;(2) impose a limitation or a requirement which was not applied for, or specify a narrower description of regulated activity than that applied for, on the grant of a Part IV permission;(3) refuse an application to vary a Part IV permission, or to restrict a Part IV
A fundamental change to the nature of a permission means:(1) removing a type of activity or investment from the firm'spermission; or(2) refusing an application to include a type of activity or investment; or(3) restricting a firm from taking on new business, dealing with a particular category of client or handling client money by imposing a limitation or requirement, or refusing an application to vary or cancel such a limitation or requirement; or(4) imposing or varying an assets
FSA staff under executive procedures will take the following statutory notice decisions:(1) the refusal of an application for listing of securities;(2) the suspension of listing on the FSA's own initiative or at the request of the issuer;(3) the suspension of trading in a financial instrument;(4) the discontinuance of listing of securities at the issuer's request;(5) the exercise of any of the powers in sections 87K or 87L of the Act in respect of a breach of any applicable provision;(6)
The decisions referred to in DEPP 2.5.12 G are:(1) the decision to give a supervisory notice pursuant to section 259(3), (8) or 9(b) (directions on authorised unit trust schemes); section 268(3), 7(a) or 9(a) (directions in respect of recognised overseas schemes); or section 282(3), (6) or (7)(b) (directions in respect of relevant recognised schemes) of the Act;(2) the decision to give a warning notice or decision notice pursuant to section 280(1) or (2)(a) (revocation of recognised
A notice under section 264(2) of the Act (notification of non-compliance with UK law) relating to a collective investment scheme constituted in another EEA State is not a warning notice, but the FSA will operate a procedure for a section 264(2) notice which will be similar to the procedure for a warning notice.
The FSA expects to adopt a procedure in respect of notices under enactments other than the Act which is similar to that for statutory notices under the Act, but which recognises any differences in the legislative framework and requirements. DEPP 2 Annex 1 and DEPP 2 Annex 2 therefore identify notices to be given pursuant to other enactments and the relevant FSA decision maker.
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
In assessing this threshold condition, factors which the FSA will take into consideration include, among other things, whether: (1) it is likely that the FSA will receive adequate information from the firm, and those persons with whom the firm has close links, to enable it to determine whether the firm is complying with the requirements and standards under the regulatory system and to identify and assess the impact on the regulatory objectives in section 2 of the Act (The FSA's
(1) Section 420(1) of the Act (Parent and subsidiary undertaking) states that, except in relation to an incorporated friendly society, 'parent undertaking' and 'subsidiary undertaking' have the same meaning as in Part VII of the Companies Act 1985 or Part VIII of the Companies (Northern Ireland) Order 1986. These are the cases referred to in COND 2.3.7 G (1)(a) to (f).(2) Section 420(2) of the Act supplements these definitions in two ways; these are the cases referred to in COND
(1) For the purposes of threshold condition 3 (Close links) and except in relation to an incorporated friendly society, an undertaking is a parent undertaking of another undertaking (a subsidiary undertaking) if any of the following apply to it:(a) it holds a majority of the voting rights in the subsidiary undertaking; or(b) it is a member of the subsidiary undertaking and has the right to appoint or remove a majority of its board of directors; or(c) it has the right to exercise
Section 420(3) of the Act (Parent and subsidiary undertaking) (supplemented by paragraph 3(3) of Schedule 6 to the Act) states that an incorporated friendly society is a parent undertaking of another body corporate (a subsidiary undertaking) if it has the following relationship to it:(1) it holds a majority of the voting rights in the subsidiary undertaking; or(2) it is a member of the subsidiary undertaking and has the right to appoint or remove a majority of the subsidiary undertaking's
For the purposes of this threshold condition 3 (Close links), an undertaking is a subsidiary undertaking of another undertaking if:(1) the other undertaking (its parent) is a member of the undertaking;(2) a majority of the undertaking's board of directors who have held office during the financial year and during the preceding financial year have been appointed solely as a result of the exercise of the parent's voting rights; and(3) no one else is the parent undertaking of the
Sections 178(1) and 190(1)of the Act require a person (whether or not he is an authorised person) to notify the FSA in writing if he proposesto take a step which would result in his acquiring control or increasing or reducing his control over a UK domestic firm in a way described in SUP 11.4.2 R (1) to SUP 11.4.2 R (4), or acquiring or reducing his control in a way described in SUP 11.4.2 R (1) and (2). Failure to notify is an offence under section 191(1) of the Act (Offences
The Treasury have made the following exemptions:(1) controllers and potential controllers of non-directive friendly societiesare exempt from the obligation to notify a change in control (The Financial Services and Markets Act 2000 (Controllers) (Exemption) Order 2001 (SI 2001/2638));(2) controllers and potential controllers of building societies are exempt from the obligation to notify a change in control unless the change involves the acquisition of a holding of a specified percentage
If a person proposesto acquire control or increase hiscontrol over a UK domestic firm in a way described in SUP 11.4.2 R(1) to (4)or acquire control in a way described in SUP 11.4.2AR (1)4, he must obtain the FSA's approval before doing so. Failure to obtain approvalis an offence under section 191(3) of the Act (Offences under this Part). The FSA has up to three months to consider whether to approve such a change in control: see SUP 11.7 for guidance on the approval procedure
6The FSA recognises that firms acting as investment managers may have difficulties in complying with the prior notification requirements in sections 178(1) and 190(1)of the Act as a result of acquiring or disposing of listed shares in the course of that fund management activity. To ameliorate these difficulties, the FSA may accept pre-notification of proposed changes in control, made in accordance with SUP D, and may grant approval of such changes for a period lasting up to a
6The FSA may treat as notice given in accordance with sections 178(1) and 190(1)of the Act a written notification from a firm which contains the following statements:(1) that the firm proposes to acquire and/or dispose of control, on one or more occasions, of any UK domestic firm whose shares or those of its ultimate parent undertaking are, at the time of the acquisition or disposal of control, listed or which are admitted to listing on a designated investment exchange;:(2) that
A notification ("notice of control") given to the FSA by a person who is acquiring control or increasing his control over a UK domestic firm, in a way described in SUP 11.4.2 R (1) to (4), or acquiring control in a way described in SUP 11.4.2A R, must:46(1) where the controller or a proposed controller is not an authorised person, contain the information required in6 the relevant controllers form;88(1A) where the controller is a custodian or a nominee company notifying under SUP
(1) A person who has submitted a notificationunder SUP 11.3.7 D must notify the FSA immediately if he becomes aware, or has information that reasonably suggests, that he has or may have provided the FSA with information which was or may have been false, misleading, incomplete or inaccurate, or has or may have changed, in a material particular. The notification must include:(a) details of the information which is or may be false, misleading, incomplete or inaccurate, or has or
If a controller or proposed controller considers that the requirements in SUP 11.3.7 D to SUP 11.3.9 D are not appropriate to his circumstances (86 for example, if the control is temporary), he should consult the FSA. The FSA has power, under section 182(3)of the Act (Notification), to amend thoserequirements if it considers it appropriate to do so.8888
The FSA is obliged to consult regulatory authorities in other EEA States before approving the change in control or giving a warning notice where6 the Financial and Services Markets Act 2000 (Consultation with Competent Authorities) Regulations 2001 (SI 2001/2509, as amended) apply. In summary, these regulations require the FSA to consult with the home state regulator of an MiFID investment firm9, a BCD credit institution, an EEA insurer, an EEAUCITS management company or the parent
The purpose of this chapter is to give guidance on the FSA's use of the power in section 166 of the Act (Reports by skilled persons). The purpose is also to make rules requiring a firm to include certain provisions in its contract with a skilled person and to give assistance to a skilled person. These rules are designed to ensure that the FSA receives certain information from a skilled person and that a skilled person receives assistance from a firm.
Section 395 of the Act (The FSA's procedures)
requires the FSA to
publish a statement of its procedure for the giving of statutory
notices. The procedure must be designed to secure, among other
things, that the decision which gives rise to the obligation to give a statutory notice is taken by a person not
directly involved in establishing the evidence on which that decision is based. The
types of statutory notices and
related notices, and the principal references to them in the
Table: Summary of statutory and related notices
Notice |
Description |
Act reference |
Further information |
Gives the recipient details about action that the FSA proposes to take and about the right to make representations. |
Section 387 |
||
Gives the recipient details about action that the FSA has decided to take. The FSA may also give a further decision notice if the recipient of the original decision notice consents. |
Section 388 |
||
Identifies proceedings set out in a warning notice or decision notice and which are not being taken or are being discontinued. |
Section 389 |
||
Sets out the terms of the action that the FSA is taking. |
Section 390 |
||
Gives the recipient details about action that the FSA has taken or proposes to take, for example to vary a Part IV permission. |
Section 395(13) |
The requirement in section 395
of the Act to publish a procedure
for the giving of notices does not extend to the giving of a notice of discontinuance or a final notice. Neither of these notices is
a statutory notice for the
purposes of DEPP; nor is the
decision to give such a notice a statutory
notice associated decision.
Decisions on whether to give a statutory notice will be taken by a 'decision
maker'. The FSA's assessment
of who is the appropriate decision maker is subject to the requirements of
section 395 of the Act and will
depend upon the nature of the decision, including its complexity, importance
and urgency. References to the 'decision maker' in DEPP are
to:(1) the Regulatory
Decisions Committee (RDC);
or(2) FSA staff
under executive procedures;
or(3) FSA staff
under the settlement decision
The decision maker will also take
decisions associated with a statutory notice (a
'statutory notice associated decision'). Statutory notice associated decisions include
decisions:(1) to set or extend the period for
making representations;(2) on whether the FSA is required to give a copy of
the statutory notice to any
third party and, if so, the period for the third party to make representations;
and(3) on whether to refuse access to FSA material,
relevant to the relevant statutory
Under section 294 of the Act (Modification or waiver of rules), the FSA may, on the application or with the consent of a recognised body (including an overseas recognised body), direct that any notification rule is not to apply to the body or is to apply with such modifications as may be specified in the waiver.
Under section 294(4) of the Act, before the FSA may give a waiver of notification rules, it must be satisfied that:(1) compliance by the recognised body with those notification rules, or with those rules as unmodified, would be unduly burdensome or would not achieve the purpose for which those rules were made; and(2) the waiver would not result in undue risk to persons whose interests those rules are designed to protect.
There is no application form, but applicants should make their application formally and in writing and in accordance with any direction the FSA may make under section 294(2) of the Act. Each application should set out at least:(1) full particulars of the waiver which is requested; (2) the reason why the recognised body believes that the criteria set out in section 294(4) (and described in REC 3.3.3 G) would be met, if this waiver were granted; and (3) where the recognised body
Any waiver given by the FSA under section 294 of the Act will be made in writing, stating: (1) the name of the recognised body in respect of which the waiver is made;(2) the notification rules which are to be waived or modified in respect of that body;(3) where relevant, the manner in which any rule is to be modified;(4) any condition or time limit to which the waiver is subject; and(5) the date from which the waiver is to take effect.
The FSA will periodically review any waiver it has given. The FSA has the right to revoke a waiver under section 294(6) of the Act. This right is likely to be exercised in the event of a material change in the circumstances of the recognised body or in any fact on the basis of which the waiver was given.
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
An actuary2 who has ceased to be appointed under this chapter2, or who has been formally notified that he will cease to be so 2appointed, must notify the FSA without delay:222(1) of any matter connected with the cessation which he thinks ought to be drawn to the FSA's attention; or(2) that there is no such matter.
2Section 341 of the Act (Access to books etc.) provides that an actuary appointed under or as a result of the Act:(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 explanation as he reasonably considers necessary to perform his duties as actuary.
The appointment of a skilled person to produce a report under section 166 of the Act (Reports by skilled persons) is one of the FSA's regulatory tools. The tool may be used:(1) for diagnostic purposes, to identify, assess and measure risks; (2) for monitoring purposes, to track the development of identified risks, wherever these arise;(3) in the context of preventative action, to limit or reduce identified risks and so prevent them from crystallising or increasing; and (4) for
The decision to require a report by a skilled person will normally be prompted by a specific requirement for information, analysis of information, assessment of a situation,4 expert advice or recommendations or by a decision to seek assurance in relation to a regulatory return4. It may4 be part of the risk mitigation programme applicable to a firm, or the result of an event or development relating or relevant to a firm, prompted by a need for verification of information provided
When making the decision to require a report by a skilled person, the FSA will have regard, on a case-by-case basis, to all relevant factors. Those are likely to include:(1) circumstances relating to the firm;(2) alternative tools available, including other statutory powers;(3) legal and procedural considerations;(4) the objectives of the FSA's enquiries;(5) cost considerations; and(6) considerations relating to FSA resources.SUP 5.3.4 G to SUP 5.3.10 G give further guidance
The FSA will have regard to alternative tools that may be available, including for example:(1) obtaining what is required without using specific statutory powers (for example, by a visit by FSA staff or a request for information on an informal basis); (2) requiring information from firms and others, including authorising an agent to require information, under section 165 of the Act (Authority's power to require information);(3) appointing investigators to carry out general investigations
The FSA will have regard to legal and procedural considerations including:(1) statutory powers: whether one of the other available statutory powers is more appropriate for the purpose than the power in section 166 of the Act (Reports by skilled persons);(2) subsequent proceedings: whether it is desirable to obtain an authoritative and independent report for use in any subsequent proceedings; and(3) application of the Handbookrules: whether it is important that the relevant rules
The FSA will have regard to the objectives of its enquiries, and the relative effectiveness of its available powers to achieve those objectives. For example:(1) historic information or evidence: if the objectives are limited to gathering historic information, or evidence for determining whether enforcement action may be appropriate, the FSA's information gathering and investigation powers under sections 165 (Authority's power to require information), 167 (Appointment of persons
In accordance with its general policy the FSA will have regard to the question of cost, which is particularly pertinent in relation to skilled persons because:(1) if the FSA uses the section 166 power (Reports by skilled persons) the firm will appoint, and will have to pay for the services of, the skilled person;(2) if the FSA uses its other information gathering and investigation powers, it will either authorise or appoint its own staff to undertake the information gathering
In having regard to the cost implications of using the section 166 power (Reports by skilled persons) alternative options (such as visits) or other powers, the FSA will take into account relevant factors, including:(1) whether the firm may derive some benefit from the work carried out and recommendations made by the skilled person, for instance a better understanding of its business and its risk profile, or the operation of its information systems, or improvements to its systems
If the RDC considers it relevant to its consideration, it may ask FSA staff to explain or provide any or all of the following:(1) additional information about the matter (which FSA staff may seek by further investigation); or(2) further explanation of any aspect of the FSA staff recommendation or accompanying papers; or(3) information about FSA priorities and policies (including as to the FSA's view on the law or on the correct legal interpretation of provisions of the Act).
If the RDC decides that the FSA should give a warning noticeor a first supervisory notice:(1) the RDC will settle the wording of the warning notice or first supervisory notice, and will ensure that the notice complies with the relevant provisions of the Act;(2) the RDC will make any relevant statutory notice associated decisions;(3) the RDC staff will make appropriate arrangements for the notice to be given; and(4) the RDC staff will make appropriate arrangements for the disclosure
(1) A warning notice or a first supervisory notice will (as required by the Act) specify the time allowed for making representations. This will not be less than 28 days.(2) The FSA will also, when giving a warning notice or a first supervisory notice, specify a time within which the recipient is required to indicate whether he wishes to make oral representations.
If the RDC decides that the FSA should give a decision notice or a second supervisory notice:(1) the RDC will settle the wording of the notice which will include a brief summary of the key representations made and how they have been dealt with, and will ensure that the notice complies with the relevant provisions of the Act;(2) the RDC will make any relevant statutory notice associated decisions, including whether the FSA is required to give a copy of the notice to a third party;
The terms of any proposed settlement:(1) will be put in writing and be agreed
by FSA staff
and the person concerned;(2) may refer to a draft of the proposed statutory notices setting out the facts
of the matter and the FSA's conclusions; (3) may, depending upon the stage in
the enforcement process at which agreement is reached, include an agreement
by the person concerned to: (a) waive and not exercise any rights
under sections 387 (Warning notices) and 394 (Access to Authority
(1) DEPP 2.4 sets out the FSA's approach
to giving third parties copies of statutory
notices pursuant to section 393 (Third party rights) of the Act.(2) The decision to give a warning notice or a decision
notice to a third party is a statutory
notice associated decision.(3) In cases therefore where the decision
to give a warning notice or decision notice is taken by settlement decision makers, those decision
makers will decide whether a copy of the notice should be given to a
Under section 107(2) of the Act, the application to the court may be made by the transferor or the transferee or both. As soon as reasonably practical, the intended applicant should choose their nominee for independent expert in the light of any criteria advised by the FSA and advise the FSA of their choice, unless the FSA wishes them to defer nomination or to make its own nomination. The notification should be accompanied by reasons why the party considers the nominee to be a
Under section 109 of the Act, a scheme report must accompany an application to the court to approve an insurance business transfer scheme. This report must be made in a form approved by the FSA. The FSA would not expect to approve the form of a scheme report unless it complies with SUP 18.2.33 G and would expect to approve the form of a scheme report that complies. SUP 18.2.32 G and SUP 18.2.34 G to SUP 18.2.41 G provide additional guidance for the independent expert.
A transfer may provide for benefits to be reduced for some or all of the policies being transferred. This might happen if the transferor is in financial difficulties. If there is such a proposal, the independent expert should report on what reductions he considers ought to be made, unless either:(1) the information required is not available and will not become available in time for his report, for instance it might depend on future events; or(2) otherwise, he is unable to report
(1) Section 51(2) of the Act (Applications under this Part) requires that the application for variation of Part IV permission must contain a statement:(a) of the desired variation; and(b) of the regulated activity or regulated activities which the firm proposes to carry on if its permission is varied.(2) The full form and content of the application for variation of Part IV permission is a matter for direction by the FSA, who will determine the additional information and documentation
(1) The FSA is required by section 41(2) of the Act to ensure that a firm applying to vary its Part IV permission satisfies and will continue to satisfy the threshold conditions in relation to all the regulated activities for which the firm has or will have Part IV permission after the variation. However, the FSA's duty under the Act does not prevent it, having regard to that duty, from taking such steps as it considers necessary in relation to a particular firm, to secure its
In considering whether to grant a firm's application to vary its Part IV permission, the FSA will also have regard, under section 49(1) of the Act (Persons connected with an applicant), to any person6 appearing to be, or likely to be, in a relationship with the firm which is relevant. The Financial Groups Directive Regulations make special consultation provisions where the FSA is exercising its functions under Part IV of the Act (Permission to carry on regulated activities) for
(1) Firms should be aware that the FSA may exercise its own-initiative power to vary or cancel their Part IV permission if they do not (see EG 8 (Variation and cancellation of permission on the FSA's own initiative and intervention against incoming firms))9:(a) commence a regulated activity for which they have Part IV permission within a period of at least 12 months from the date of being given; or(b) carry on a regulated activity for which they have Part IV permission for a period
(1) Under section 19 of the Act (The general prohibition), no person may carry on a regulated activity in the United Kingdom, or purport to do so, unless he is an authorised person, or he is an exempt person in relation to that activity.(2) A person will be an exempt person if he satisfies the conditions in section 39(1) of the Act, guidance on which is given in SUP 12.2.2 G. A person who is exempt as a result of satisfying these conditions is referred to in the Act as an appointed
(1) A person must satisfy the conditions in section 39(1) of the Act to become an appointed representative. These are that:(a) the person must not be an authorised person, that is, he must not have permission under the Act to carry on any regulated activity in his own right (section 39(1) of the Act); (b) the person must have entered into a contract with an authorised person, referred to in the Act as the 'principal', which:(i) permits or requires him to carry on business of
As long as the conditions in section 39 of the Act are satisfied, any person, other than an authorised person, may become an appointed representative, including a body corporate, a partnership or an individual in business on his own account. However, an appointed representative cannot be an authorised person under the Act; that is, it cannot be exempt for some regulated activities and authorised for others.
(1) The Appointed Representatives Regulations are made by the Treasury under section 39(1) of the Act. These regulations describe, among other things, the business for which an appointed representative may be exempt, which is business which comprises any of:(a) dealing in investments as agent (article 21 of the Regulated Activities Order) where the transaction relates to a pure protection contract (but only where the contract is not a long-term care insurance contract) or general
(1) An introducer is an individual appointed by a firm or by an appointed representative of such a firm to carry out, in the course of designated investment business, either or both of the following activities:4(a) effecting introductions; (b) distributing non-real time financial promotions.(2) An introducer is not an exempt person under section 39 of the Act (unless he is also an introducer appointed representative) and hence cannot benefit from the exemption to carry on regulated
The Act provides that appointed representatives (see PERG 2.10.5 G), recognised investment exchanges and recognised clearing houses (see PERG 2.10.6 G) and certain other persons exempt under miscellaneous provisions (see PERG 2.10.7 G) are exempt persons. Members of Lloyds and members of the professions are not 'exempt persons' as such, but the general prohibition in section 19 of the Act only applies to them in certain circumstances. The distinction is significant in relation
Various named persons are exempted by Order made by the Treasury under section 38 of the Act from the need to obtain authorisation (the Exemption Order). Some of the exemptions are subject to restrictions as to the circumstances in which they apply. For example, a person is only exempt when acting in a particular capacity or for particular purposes.
But under section 316 of the Act (Direction by the FSA) the general prohibition does not apply to a person who is a member of the Society of Lloyds unless the FSA has made a direction that it should apply. The general prohibition is disapplied in relation to any regulated activity carried on by a member relating to contracts of insurance written at Lloyds. Directions can be made by the FSA in relation to individual members or the members of the Society of Lloyds taken together.
A person who ceased to be an underwriting member at any time on or after 24 December 1996 may, without authorisation, carry out contracts of insurance he has underwritten at Lloyds. But this is subject to any requirements or rules that the FSA may impose under sections 320 to 322 of the Act (Former underwriting members).
The general prohibition does not in certain circumstances apply to a person providing professional services that are supervised and regulated by a professional body designated by the Treasury under section 326 of the Act (Designation of professional bodies) (see PROF). Certain of the exclusions from regulated activities outlined in PERG 2.8 and PERG 2.9 will be relevant to members of designated professional bodies. The regime outlined below applies only where no exclusion applies
Such a person may carry on regulated activities if the conditions outlined below are met, that is the person:(1) is not affected by an order or direction made by the FSA under section 328 or 329 of the Act (Directions and orders in relation to the general prohibition) which has the effect of re-imposing the general prohibition in any particular case;(2) is, or is controlled by, a member of a profession;(3) does not receive any pecuniary reward or other advantage from the regulated
The regulated activities that may be carried on in this way are restricted by an Order made by the Treasury under section 327(6) of the Act (Exemption from the general prohibition) (the Non-Exempt Activities Order). Accordingly, under that section, a person may not by way of business carry on any of the following activities without authorisation:(1) accepting deposits;(2) effecting or carrying out contracts of insurance;(3) dealing in investments as principal;(4) establishing,
A person carrying on regulated activities under the regime for members of the professions will be subject to rules made by the professional body designated by the Treasury. Such bodies are obliged to make rules governing the carrying on by their members of those regulated activities that they are able to carry on without authorisation under the Act. Where such a person is carrying on insurance mediation or reinsurance mediation, he must also be included on the register kept by
Under section 148(4) of the Act, the FSA may not give a waiver unless it is satisfied that:(1) compliance by the firm with the rules, or with the rules as unmodified, would be unduly burdensome, or would not achieve the purpose for which the rules were made; and(2) the waiver would not result in undue risk to persons whose interests the rules are intended to protect.
Under section 148(2) of the Act the FSA may give a waiver with the consent of a firm. This power may be used by the FSA in exceptional circumstances where the FSA considers that a waiver should apply to a number of firms (for example, where a rule unmodified may not meet the particular circumstances of a particular category of firm). In such cases the FSA will inform the firms concerned that the waiver is available, either by contacting firms individually or by publishing details
An application for a waiver of an evidential provision will normally be granted only if a breach of the underlying binding rule is actionable under section 150 of the Act. Individual guidance would normally be a more appropriate response (see SUP 9 (Individual Guidance)) if there is no right of action.2
(1) 1Under section 313A of the Act, the FSA may for the purpose of protecting:(a) the interests of investors; or (b) the orderly functioning of the financial markets; require a UK RIE to suspend or remove a financial instrument from trading.(2) If the FSA exercises this power, the UK RIE concerned may refer the matter to the Tribunal.
The procedure the FSA will follow if it exercises its power to require a UK RIE to suspend or remove a financial instrument from trading is set out in section 313B of the Act. The FSA's internal arrangements provide for decisions to exercise this power to be taken at an appropriately senior level. If the FSA exercises this power, the UK RIE concerned and the issuer (if any) of the relevant financial instrument may refer the matter to the Tribunal(see EG 2.39)2.2
Section 19 of the Act (The general prohibition) provides that the requirement to be authorised under the Act only applies in relation to regulated activities which are carried on 'in the United Kingdom'. In many cases, it will be quite straightforward to identify where an activity is carried on. But when there is a cross-border element, for example because a borrower is outside the United Kingdom or because some other element of the activity happens outside the United Kingdom,
Even if a person concludes that he is not carrying on a regulated activity in the United Kingdom, he will need to ensure that he does not contravene other provisions of the Act that apply to unauthorised persons. These include the controls on financial promotion (section 21 (Financial promotion) of the Act) (see PERG 8 (Financial promotion and related activities)), and on giving the impression that a person is authorised (section 24 (False claims to be authorised or exempt)).
Section 418 of the Act deals with the carrying on of regulated activities in the United Kingdom. It extends the meaning that 'carry on a regulated activity in the United Kingdom' would ordinarily have by setting out additional cases. The Act states that in these cases a person who is carrying on a regulated activity but would not otherwise be regarded as carrying on the activity in the United Kingdom is, for the purposes of the Act, to be regarded as carrying on the activity in
For the purposes of regulated mortgage activities, sections 418(2), (4), (5), (5A) and (6) are relevant, as follows:(1) Section 418(2) refers to a case where a UK-based person carries on a regulated activity in another EEA State in the exercise of rights under a Single Market Directive. The only Single Market Directive which is relevant to mortgages is the Banking Consolidation Directive.(2) Section 418(4) refers to the case where a UK-based person carries on a regulated activity
The FSA's view of the effect of the Act and Regulated Activities Order in various territorial scenarios is set out in the remainder of this section. In those scenarios:(1) the term "service provider" is used to describe a person carrying on any of the regulated mortgage activities;(2) the term "borrower" refers to a borrower who is an individual and not a trustee; the position of a borrower acting as a trustee is not considered; and(3) it is assumed that the activity is not an
Where a person is carrying on any of the regulated mortgage activities from an establishment maintained by him in the United Kingdom, that person will be 'carrying on a regulated activity in the United Kingdom'. The location and residence of the borrower is irrelevant. That is the practical effect of sections 418(4), (5) and (6) of the Act.
If a service provider is overseas, the question of whether that person is carrying on a regulated activity in the United Kingdom will depend upon:(1) the type of regulated activity being carried on;(2) section 418 of the Act;(3) the residence and location of the borrower;(4) the application of the overseas persons exclusion in article 72(5A) to (5F) of the Regulated Activities Order; and(5) whether the service provider is carrying on an electronic commerce activity.The factors
When considering whether it is satisfied under section 148(6), the FSA is required by section 148(7) of the Act:(1) to take into account whether the waiver relates to a rule contravention of which is actionable under section 150 of the Act (Actions for damages); Schedule 5 identifies such rules;(2) to consider whether its publication would prejudice, to an unreasonable degree, the commercial interests of the firm concerned, or any other member of its immediate group; and(3) to
Waivers can affect the legal rights of third parties, including consumers. In the FSA's view it is important that the fact and effect of such waivers should be transparent. So the fact that a waiver relates to a rule that is actionable under section 150 of the Act (see SUP 8.6.2 G (1)) will tend to argue in favour of publication.
In considering whether commercial interests would be prejudiced to an unreasonable degree (see SUP 8.6.2 G (2)), the FSA will weigh the prejudice to firms' commercial interests against the interests of consumers, markets and other third parties in disclosure. In doing so the FSA will consider factors such as the extent to which publication of the waiver would involve the premature release of proprietary information to commercial rivals, for example relating to a product innovation,