Related provisions for COLL 5.6.6

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CASS 6.1.16FRRP

2When a trustee firm or depositary acts as a custodian for a trust or collective investment scheme and:

  1. (1)

    the trust or scheme is established by written instrument; and

  2. (2)

    the trustee firm or depositary has taken reasonable steps to determine that the relevant law and provisions of the trust instrument or scheme constitution will provide protections at least equivalent to the custody rules for the trust property or scheme property;

the trustee firm or depositary need comply only with the custody rules listed in the table below.

Reference

Rule

CASS 6.1.1 R to CASS 6.1.9 G and CASS 6.1.15 G to CASS 6.1.16C R

Application

CASS 6.1.16E R to CASS 6.1.16I G

Trustees and depositaries

CASS 6.1.22 G to CASS 6.1.24 G

General purpose

CASS 6.2.1 R and CASS 6.2.2 R

Protection of clients' safe custody assets

CASS 6.2.3 R and CASS 6.2.6 G

Registration and recording

CASS 6.2.7 R

Holding

CASS 6.4.1 R and CASS 6.4.2 G

Use of safe custody assets

CASS 6.5.

Records, accounts and reconciliations

PR App 1.1.1RP

1Note: The following definitions relevant to the prospectus rules are extracted from the Glossary.

Act

the Financial Services and Markets Act 2000.

admission to trading

admission to trading on a regulated market.

advertisement

(as defined in the PD Regulation) announcements:

(1)

relating to a specific offer to the public of securities or to an admission to trading on a regulated market; and

(2)

aiming to specifically promote the potential subscription or acquisition of securities.

annual information update

the document referred to in PR 5.2.1 R.

applicant

an applicant for approval of a prospectus or supplementary prospectus relating to transferable securities.

asset backed security

(as defined in the PD Regulation) securities which:

(1)

represent an interest in assets, including any rights intended to assure servicing, or the receipt or timeliness of receipts by holders of assets of amounts payable thereunder; or

(2)

are secured by assets and the terms of which provide for payments which relate to payments or reasonable projections of payments calculated by reference to identified or identifiable assets.

base prospectus

a base prospectus referred to in PR 2.2.7 R.

body corporate

(in accordance with section 417(1) of the Act (Definitions) any body corporate, including a body corporate constituted under the law of a country or territory outside the United Kingdom;

building block

(as defined in the PD Regulation) a list of additional information requirements, not included in one of the schedules, to be added to one or more schedules, as the case may be, depending on the type of instrument and/or transaction for which a prospectus or base prospectus is drawn up.

CARD

Consolidated Admissions and Reporting Directive.

CESR recommendations

the recommendations for the consistent implementation of the European Commission's Regulation on Prospectuses no 809/2004 published by the Committee of European Securities Regulators.

collective investment undertaking other than the closed-end type

(in PR) (as defined in Article 2.1(o) of the prospectus directive) unit trusts and investment companies:

(1)

the object of which is the collective investment of capital provided by the public, and which operate on the principle of risk-spreading;

(2)

the units of which are, at the holder's request, repurchased or redeemed, directly or indirectly, out of the assets of these undertakings.

Consolidated Admissions and Reporting Directive

Directive 2001/34/EC of the European Parliament and of the Council on the admission of securities to official stock exchange listing and on information to be published on those securities.

credit institution

as defined in article 1(1) of the Banking Consolidation Directive.

director

(in accordance with section 417(1)(a) of the Act) a person occupying in relation to it the position of a director (by whatever name called) and, in relation to an issuer which is not a body corporate, a person with corresponding powers and duties.

EEA State

(in accordance with paragraph 8 of Schedule 3 to the Act (EEA Passport Rights)) a State which is a contracting party to the agreement on the European Economic Area signed at Oporto on 2 May 1992, as it has effect for the time being; as at 1 May 2004, the following are the EEA States: Austria, Belgium, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, the Netherlands, Norway, Poland, Portugal, the Slovak Republic, Slovenia, Spain, Sweden and the United Kingdom.

equity security

(as defined in Article 2.1(b) of the prospectus directive) shares and other transferable securities equivalent to shares in companies, as well as any other type of transferable securities giving the right to acquire any of the aforementioned securities as a consequence of their being converted or the rights conferred by them being exercised, provided that securities of the latter type are issued by the issuer of the underlying shares or by an entity belonging to the group of the said issuer.

equity share

shares comprised in a company'sequity share capital.

equity share capital

(for a company), its issued share capital excluding any part of that capital which, neither as respects dividends nor as respects capital, carries any right to participate beyond a specified amount in a distribution.

executive procedures

the procedures relating to the giving of warning notices, decision notices and supervisory notices that are described in DEPP 4 (Decision by FSA staff under executive procedures)2.

22

FSA

the Financial Services Authority.

guarantee

(as defined in the PD Regulation) any arrangement intended to ensure that any obligation material to the issue will be duly serviced, whether in the form of guarantee, surety, keep well agreement, mono-line insurance policy or other equivalent commitment.

guarantor

a person that provides a guarantee.

Home State or Home Member State

(as defined in section 102C of the Act) in relation to an issuer of transferable securities, the EEA State which is the "home Member State" for the purposes of the prospectus directive (which is to be determined in accordance with Article 2.1(m) of that directive).

Host State or Host Member State

(as defined in Article 2.1(n) of the prospectus directive) the EEA State where an offer to the public is made or admission to trading is sought, when different from the home State.

3

[deleted]3

3
3

[deleted]3

3

issuer

(as defined in section 102A of the Act) a legal person who issues or proposes to issue the transferable securities in question.

MiFID3

The European Parliament and Council Directive on markets in financial instruments (No. 2004/39/EC).

See also MiFID Regulation and MiFID implementing Directive.3

non-equity transferable securities

(as defined in section 102A of the Act) all transferable securities that are not equity securities.

Note: In the prospectus directive and the PD Regulation, the Commission uses the term "non-equity securities" rather than "non-equity transferable securities".

offer

an offer of transferable securities to the public.

offer of transferable securities to the public

(as defined in section 102B of the Act), in summary:

(a)

a communication to any person which presents sufficient information on:

  • (i) the transferable securities to be offered, and
  • (ii) the terms on which they are offered,

to enable an investor to decide to buy or subscribe for the securities in question;

(b)

which is made in any form or by any means;

(c)

including the placing of securities through a financial intermediary;

(d)

but not including a communication in connection with trading on:

  • (i) a regulated market;
  • (ii) a multilateral trading facility; or
  • (iii) any market prescribed by an order under section 130A of the Act.

Note: This is only a summary, to see the full text of the definition, readers should consult section 102B of the Act.

offering programme

(as defined in Article 2.1(k) of the prospectus directive) a plan which would permit the issuance of non-equity securities, including warrants in any form, having a similar type and/or class, in a continuous or repeated manner during a specified issuing period.

offeror

a person who makes an offer of transferable securities to the public.

overseas company

a company incorporated outside the United Kingdom.

Part 6 rules

(in accordance with section 73A(1) of the Act), rules made for the purposes of Part 6 of the Act.

PD

prospectus directive.

PD Regulation

Regulation number 809/2004 of the European Commission.

person

(in accordance with the Interpretation Act 1978) any person, including a body of persons corporate or unincorporated that is, a natural person, a legal person and, for example, a partnership).

PR

the Prospectus Rules sourcebook.

profit estimate

(as defined in the PD Regulation) a profit forecast for a financial period which has expired and for which results have not yet been published.

profit forecast

(as defined in the PD Regulation) a form of words which expressly states or by implication indicates a figure or a minimum or maximum figure for the likely level of profits or losses for the current financial period and/or financial periods subsequent to that period, or contains data from which a calculation of such a figure for future profits or losses may be made, even if no particular figure is mentioned and the word "profit" is not used.

property collective investment undertaking

(as defined in the PD Regulation) a collective investment undertaking whose investment objective is the participation in the holding of property in the long term.

prospectus

a prospectus required under the prospectus directive.

prospectus directive

the Directive of the European Parliament and of the Council of 4 November 2003 on the prospectus to be published when securities are offered to the public or admitted to trading (No 2003/71/EC).

Prospectus Rules

(as defined in section 73A(4) of the Act) rules expressed to relate to transferable securities.

Public international body

(as defined in the PD Regulation) a legal entity of public nature established by an international treaty between sovereign States and of which one or more Member States are members.

qualified investor

(as defined in section 86(7) of the Act) :

(a)

any entity falling within the meaning of Article 2(1)(e)(i), (ii) or (iii) of the prospectus directive;

(b)

An investor registered on the register maintained by the competent authority under section 87R;

(c)

An investor authorised by an EEA State other than the United Kingdom to be considered as a qualified investor for the purposes of the prospectus directive.

register

register of qualified investors maintained by the FSA under section 87R of the Act.

registration document

a registration document referred to in PR 2.2.2 R.

regulated information

(as defined in the PD Regulation) all information which the issuer, or any person who has applied for the admission of securities to trading on a regulated market without the issuer’s consent, is required to disclose under Directive 2001/34/EC or under Article 6 of Directive 2003/6/EC.3

regulated market

a multilateral system operated and/or managed by a market operator, which brings together or facilitates the bringing together of multiple third-party buying and selling interests in financial instruments in the system and in accordance with its non-discretionary rules in a way that results in a contract, in respect of the financial instruments admitted to trading under its rules and/or systems, and which is authorised and functions regularly and in accordance with the provisions of Title III of MiFID.3

RIS

Regulatory Information Service.

risk factors

(as defined in the PD Regulation) a list of risks which are specific to the situation of the issuer and/or the securities and which are material for taking investment decisions.

rule

(in accordance with section 417(1) of the Act (Definitions)) a rule made by the FSA under the Act.

schedule

(as defined in the PD Regulation) a list of minimum information requirements adapted to the particular nature of the different types of issuers and/or the different securities involved.

securities issued in a continuous and repeated manner

(as defined in Article 2.1(l) of the prospectus directive) issues on tap or at least two separate issues of securities of a similar type and/or class over a period of 12 months.

securities note

a securities note referred to in PR 2.2.2 R.

small and medium-sized enterprise

(as defined in Article 2.1(f) of the prospectus directive) companies, which, according to their last annual or consolidated accounts, meet at least two of the following three criteria: an average number of employees during the financial year of less than 250, a total balance sheet not exceeding €43,000,000 and an annual net turnover not exceeding €50,000,000.

special purpose vehicle

(as defined in the PD Regulation) an issuer whose objects and purposes are primarily the issue of securities.

statutory notice associated decision

a decision which is made by the FSA and which is associated with a decision to give a statutory notice, including a decision:

statutory notice decision

a decision by the FSA on whether or not to give a statutory notice.

(a)

to determine or extend the period for making representations;

(b)

to determine whether a copy of the statutory notice needs to be given to any third party and the period for him to make representations;

(c)

to refuse access to FSA material;

(d)

as to the information which it is appropriate to publish about the matter to which a final notice or an effective supervisory notice relates.

summary

(in relation to a prospectus) the summary included in the prospectus.

supplementary prospectus

a supplementary prospectus containing details of a new factor, mistake or inaccuracy.

transferable security

(as defined in section 102A of the Act) anything which is a transferable security for the purposes of MiFID3, other than money-market instruments for the purposes of that directive which have a maturity of less than 12 months.

3

Note: In the prospectus directive and PD regulation, the Commission uses the term "security" rather than "transferable security".

umbrella collective investment scheme

(as defined in the PD Regulation) a collective investment undertaking invested in one or more collective investment undertakings, the asset of which is composed of separate class(es) or designation(s) of securities.

United Kingdom

England and Wales, Scotland and Northern Ireland (but not the Channel Islands or the Isle of Man).

units of a collective investment scheme

(as defined in Article 2.1(p) of the prospectus directive) securities issued by a collective investment undertaking as representing the rights of the participants in such an undertaking over its assets.

working day

(as defined in section 103 of the Act) any day other than a Saturday, a Sunday, Christmas Day, Good Friday or a day which is a bank holiday under the Banking and Financial Dealings Act 1971 in any part of the United Kingdom.

TC App 1.1.1RRP

1Activity

Products/Sectors

Is there an appropriate examinationrequirement?

Designated investment business carried on for a retail client

Providing basic advice

1.

Stakeholder products excluding a deposit-based stakeholder product

No

Advising

2.

Securities which are not stakeholder pension schemes or broker funds

Yes

3.

Derivatives

Yes2

4.

Packaged products which are not broker funds

Yes2

5.

Friendly Societylife policies where the employee is not reasonably expected to receive a remuneration of greater than £1000 a year in respect of such sales

No2

6.

Friendly Society tax-exempt policies

Yes2

7.

Long-term care insurance contracts

Yes2

8.

Investments in the course of corporate finance business

Yes2

9.

Advising on syndicate participation at Lloyd's

Yes2

Undertaking the activity in column 2

10.

Broker fund adviser

Yes

11.

Pension transfer specialist

Yes2

Advising and dealing

12.

Securities which are not stakeholder pension schemes or broker funds

Yes

13.

Derivatives

Yes2

Managing

14.

Investments

Yes

Overseeing on a day-to-day basis

15.

Operating a collective investment scheme or undertaking the activities of a trustee or depositary of a collective investment scheme

Yes

16.

Safeguarding and administering investments or holding client money

Yes2

17.

Administrative functions in relation to managing investments

Yes2

18.

Administrative functions in relation to effecting or carrying out contracts of insurance which are life policies

Yes2

19.

Administrative functions in relation to the operation of stakeholder pension schemes

Yes2

Regulated mortgage activity and reversion activity carried on for a customer

Advising

20.

Regulated mortgage contracts for a non-business purpose

Yes

21.

Equity release transactions

Yes2

Designing scripted questions for non-advised sales

22.

Equity release transactions

Yes

Overseeing non-advised sales on a day-to-day basis

23.

Equity release transactions

Yes

Non-investment insurance business carried on for a consumer

Advising

24.

Non-investment insurance contracts

No

3Regulated sale and rent back activity carried on for a customer

Advising

25.

Regulated sale and rent back agreements

No

Overseeing non-advised saleson a day-to-day basis

26.

Regulated sale and rent back agreements

No

Notes:

1.

In the Appendix the heading and types of business specified in the headings are to be read in conjunction with the paragraphs appearing beneath them.

2.

Thus, for example, paragraph 24consistent with the heading above it3, refers only to advice on non-investment insurance contracts given to a consumer.

3
COBS 4.1.1RRP
1This chapter applies to a firm:(1) communicating with a client in relation to its designated investment business;(2) communicating or approving a financial promotion other than:(a) a financial promotion of qualifying credit, a home purchase plan or a home reversion plan; or(b) a financial promotion in respect of a non-investment insurance contract; or(c) a promotion of an unregulated collective investment scheme that would breach section 238(1) of the Act if made by an authorised
PERG 8.1.3GRP
In particular, this guidance covers:(1) invitations and inducements (see PERG 8.4);(2) meaning of 'in the course of business' (see PERG 8.5);(3) meaning of 'communicate' (see PERG 8.6);(4) meaning of 'engage in investment activity' (see PERG 8.7);(5) meaning of 'having an effect in the United Kingdom' (see PERG 8.8);(6) circumstances where the restriction in section 21 does not apply (see PERG 8.9);(7) types of financial promotion, including:(a) meaning of 'real time financial
GEN 4.5.1RRP
1This section applies to a firm:(1) communicating with a customer; or(2) communicating or approving a financial promotion other than:(a) a financial promotion that would benefit from an exemption in the Financial Promotion Order if it were communicated by an unauthorised person;(b) a promotion of an unregulated collective investment scheme that would breach section 238(1) of the Act if made by an authorised person (firms may not communicate or approve such promotions).
DTR 5.1.5RRP
(1) The following are to be disregarded for the purposes of determining whether a person has a notification obligation in accordance with the thresholds in DTR 5.1.2 R except at the thresholds of 5% and 10% and above:(a) voting rights attaching to shares forming part of property belonging to another which that person lawfully manages under an agreement in, or evidenced in, writing;(b) voting rights attaching to shares which may be exercisable by a person in his capacity as the
COBS 9.4.3RRP
The obligation to provide a suitability report does not apply:(1) if the firm, acting as an investment manager for a retail client, makes a personal recommendation relating to a regulated collective investment scheme;(2) if the client is habitually resident outside the EEA and the client is not present in the United Kingdom at the time of acknowledging consent to the proposal form to which the personal recommendation relates;(3) to any personal recommendation by a friendly society
PERG 9.7.2GRP
The characteristics that a reasonable investor can be expected to have will inform the use of judgment required by the 'expectation test' and the 'satisfaction test'. These tests relate to the investor's ability to realise an investment within a reasonable period and to do so on the basis of the net value of its assets. In the FSA's view, the characteristics of the reasonable investor include:(1) sound judgment based on good sense;(2) some knowledge of, and possibly experience
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 13A.3.12GRP
Under Schedule 5 to the Act (Persons concerned in collective investment schemes), a person who for the time being is an operator, trustee or depositary of a scheme which is a recognised scheme under section 264 of the Act is an authorised person. Such a person is referred to in the Handbook as a UCITS qualifier.
COLL 7.5.2GRP
The information referred to in COLL 7.5.1 G is listed below:(1) the name of the authorised fund or sub-fund;(2) the size of the authorised fund or sub-fund;(3) the number of unitholders; (4) whether dealing in units has been suspended;(5) why the request is being made; (6) what consideration has been given to the authorised fund or sub-fund entering into a scheme of arrangement with another regulated collective investment scheme and the reasons why a scheme of arrangement is not
COLL 7.1.3GRP
(1) This chapter helps to achieve the regulatory objective of protecting investors by ensuring they do not buy or redeemunits at a price that cannot be calculated accurately. For instance, due to unforeseen circumstances, it may be impossible to value, or to dispose of and obtain payment for, all or some of the scheme property of an authorised fund or sub-fund. COLL 7.2.1 R (Requirement) sets out the circumstances in which an authorised fund manager must or may suspend dealings
PERG 1.4.2GRP

Table: list of general guidance to be found in PERG.

Chapter:

Applicable to:

About:

PERG 2:

Authorisation and regulated activities

PERG 3:

Issuing e-money

a person who needs to know

  • whether a particular electronic payment product ise-money and whether the person issuing it needs to beauthorised under the Act
  • whether any communications about the product will be restricted

PERG 4:

Regulated activities connected with mortgages

any person who needs to know whether the activities he conducts in relation to mortgages are subject to FSA regulation. This is likely to include:

  • lenders
  • administration service providers
  • mortgage brokers and advisers

the scope of relevant orders (in particular, the Regulated Activities Order) as respects activities concerned with mortgages

PERG 5:

Insurance

mediation

activities

any person who needs to know whether he carries on insurance mediation activities and is, thereby, subject to FSA regulation. This is likely to include:

the scope of relevant orders (in particular, the Regulated Activities Order) as respects activities concerned with the sale or administration of insurance

PERG 6:

Identification of contracts of insurance

any person who needs to know whether a contract with which he is involved is a contract of insurance

the general principles and range of specific factors that the FSA regards as relevant in deciding whether any arrangement is a contract of insurance

PERG 7:

Periodical publications, news services and broadcasts: application for certification

any person who needs to know whether he will be regulated for providing advice about investments through the medium of a periodical publication, a broadcast or a news service

PERG 8:

Financial promotion and related activities

any person who needs to know

PERG 9:

Meaning of open-ended investment company

any person who needs to know whether a body corporate is an open-ended investment company as defined in section 236 of the Act (Open-ended investment companies) and is therefore a collective investment scheme.

the circumstances in which a body corporate will be an open-ended investment company

PERG 10:

Activities related to pension schemes

Any person who needs to know whether his activities in relation to pension schemes will amount to regulated activities or whether the restriction in section 21 of the Act will apply to any financial promotions he may make.1

1

  • the regulated activities that arise in connection with the establishment and operation of pension schemes and any exclusions that may be relevant
  • the circumstances in which financial promotions about pension schemes may be exempt from the restriction in section 21 of the Act1

4PERG 11:

Property investment clubs and land investment schemes

Any person who needs to know whether his activities in relation to property investment clubs and land investment schemes will amount to regulated activities or whether the restriction in section 21 of the Act will apply to any financial promotions he may make.

  • the regulated activities that may arise in connection with the establishment and operation of property investment clubs and land investment schemes and any exclusions that may be relevant
  • the extent to which the financial promotion restriction in section 21 of the Act applies

2PERG 12:

Running or advising on personal pension schemes

any person who needs to know whether his activities in relation to establishing, running, advising on or marketing personal pension schemes will amount to regulated activities

the regulated activities that arise in connection with establishing, running, advising on or marketing personal pension schemes and any exclusions that may be relevant

3PERG 13:

Guidance on the scope of the Markets in Financial Instruments Directive and the recast Capital Adequacy Directive

5

Any UK person who needs to know whether MiFID or the recast CADas implemented in the UK apply to him5

the scope of MiFID and the recast CAD5

3PERG 14:

Home reversion and home finance activities

Any person who needs to know whether his activities in relation to home reversion plans or home purchase plans will amount to regulated activities or whether the restriction in section 21 of the Act will apply to any financial promotions he may make.

6PERG 15: Guidance on the scope of the Payment Services Regulations 2009

Any person with an establishment in the UK who needs to know whether the Payment Services Directive, as transposed in UK legislation by the Payment Services Regulations 2009, applies to him.

Q46 applies specifically to persons providing payment services from an establishment outside the EEA to persons located in the UK.

the scope of the PSD Regulations 2009.

SUP 17.1.1RRP
1This chapter applies to:(1) a MiFID investment firm;(2) a third country investment firm; and to(3) a person who is the operator of an approved reporting mechanism or of a regulated market or MTF that is used by a firm to report transactions to the FSA; and(4) a firm acting in its capacity as a manager or operator of:(a) a collective investment undertaking; or(b) a pension scheme; or(c) an occupational pension scheme; or(d) a personal pension scheme; or(e) a stakeholder pension
CASS 5.5.15GRP
A firm which takes advantage of CASS 5.5.14 R will need to consider whether its permission should include the permitted activity of managing investments. If the firm is granted a power to manage with discretion the funds over which it is appointed as trustee under the trust deed required by CASS 5.4 then it will be likely to need a permission to manage investments. It is unlikely to need such a permission, however, if it is merely granted a power to invest but the deed stipulates
PERG 8.14.21GRP
This exemption disapplies the restriction in section 21 of the Act from non-real time financial promotions or solicited real time financial promotions which are made to a person who the communicator believes on reasonable grounds to be a certified high net worth individual and which relate to certain investments. These investments must be either:7(1) shares in or debentures or alternative debentures7 of an unlisted company; or(2) warrants,certificates representing certain securities,
PERG 2.8.10GRP
There are two1 exclusions1 from the range of activities specified as being regulated in relation to collective investment schemes. These exclusions relate 1to incoming ECA providers (see PERG 2.9.18 G) and to business angel-led enterprise capital funds (see PERG 2.9.20 G)1. In other cases, the key issue is whether or not what is being done relates to something that is a collective investment scheme. Exclusions exist in relation to that issue (see PERG 2.6.18 G).11