Related provisions for PRIN 3.1.5

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SUP 13A.4.1GRP
(1) Before an EEA firm other than an EEA pure reinsurer3exercises an EEA right to establish a branch in the United Kingdom other than under the Insurance Mediation Directive, the Act requires it to satisfy the establishment conditions, as set out in paragraph 13(1) of Part II of Schedule 3 to the Act. (2) For the purposes of paragraph 13(1)(b)(iii) of Part II of Schedule 3 to the Act, the information to be included in the consent notice has been prescribed under regulation 2 of
SUP 13A.4.2GRP
Where an EEA firm exercises its EEA right to establish a branch in the United Kingdom under the Insurance Mediation Directive, the Act requires it to satisfy the establishment conditions, as set out in paragraph 13(1A) of Part II of Schedule 3 to the Act.
SUP 13A.4.3GRP
For the purposes of paragraph 13(2)(b) of Part II of Schedule 3 to the Act, the applicable provisions may include FSArules. The EEA firm is required to comply with relevant rules when carrying on a passported activity through a branch in the United Kingdom as well as with relevant UK legislation.
SUP 13A.4.4GRP
(1) When the FSA receives a consent notice from the EEA firm'sHome State regulator, it will, under paragraphs 13(2)(b), (c) and 13(3) of Part II of Schedule 3 to the Act, notify the applicable provisions (if any) to:(a) the EEA firm; and(b) in the case of an EEA firm passporting under the Insurance Directives, the Home State regulator;within two months of the notice2 date.2(1A) The notice date is:2(a) for a MiFID investment firm, the date on which the Home State gave the consent
PERG 9.10.1GRP
A number of controls apply under the Act to the promotion of shares or securities that are issued by any body corporate. These controls differ according to whether the person making the promotion is an unauthorised person (see PERG 9.10.2 G) or an authorised person (see PERG 9.10.3 G to PERG 9.10.6 G). In addition, where a body corporate is not an open-ended investment company:(1) the requirements of Prospectus Rules relating to the publication of an approved prospectus may1 apply
PERG 9.10.2GRP
The controls under the Act that apply to promotions of shares or securities by unauthorised persons are in section 21 of the Act (Restrictions on financial promotion). These controls apply where an unauthorised person makes a financial promotion in, or from, the United Kingdom that relates to the shares in or securities of any body corporate. The same controls apply regardless of whether the shares or securities being promoted are issued by a body corporate that is an open-ended
PERG 9.10.3GRP
Promotions made by authorised persons in the United Kingdom are generally subject to the controls inCOBS 4 (Communicating with clients, including financial promotions).3 However, in the case of shares in, or securities of, a body corporate which is an open-ended investment company, additional controls are imposed by Chapter II of Part XVII of the Act (Restrictions on promotion of collective investment schemes) (see PERG 8.20). Section 238 of the Act (Restrictions on promotion)
PERG 9.10.5GRP
There are a number of other exemptions in the Financial Services and Markets Act 2000 (Promotion of Collective Investment Schemes) (Exemptions) Order 2001 (SI 2001/1060). In general terms, these exemptions are equivalent to the exemptions from section 21 of the Act that apply to units. There is guidance on those exemptions in PERG 8.20.3 G (Additional restriction on the promotion of collective investment schemes).
PERG 9.10.10GRP
A person carrying on the regulated activity of establishing, operating or winding up a collective investment scheme that is constituted by an open-ended investment company will need permission for those activities. In line with section 237(2) of the Act (Other definitions), the operator of a collective investment scheme that is an open-ended investment company is the company itself. But where the open-ended investment company is incorporated outside the United Kingdom, it will
SUP 13A.1.1GRP
(1) 1This chapter applies to an EEA firm that wishes to exercise an entitlement to establish a branch in, or provide cross border services into, the United Kingdom under a Single Market Directive. (The Act refers to such an entitlement as an EEA right and its exercise is referred to in the Handbook as "passporting".) (See SUP App 3 (Guidance on passporting issues) for further guidance on passporting.)(2) This chapter also applies to:(a) a Treaty firm that wishes to exercise rights
SUP 13A.1.2GRP
This chapter does not apply to:(1) an EEA firm that wishes to carry on in the United Kingdom activities which are outside the scope of its EEA right and the scope of a permission granted under Schedule 4 to the Act; in this case the EEA firm requires a "top-up permission" under Part IV of the Act (see the FSA website "How do I get authorised":http://www.fsa.gov.uk/Pages/Doing/how/index.shtml3); or 3(2) an EEA firm that carries on any insurance activity:(a) by the provision of
SUP 13A.1.3GRP
(1) Under the Gibraltar Order2 made under section 409 of the Act, a Gibraltar firm is treated as an EEA firm under Schedule 3 to the Act if it is:22(a) authorised in Gibraltar under the Insurance Directives; or(aA) authorised in Gibraltar under the Reinsurance Directive; or6(b) authorised in Gibraltar under the Banking Consolidation Directive; or22(c) authorised in Gibraltar under the Insurance Mediation Directive; or2(d) authorised in Gibraltar under the MiFID4.24(1A) Similarly,
SUP 13A.1.4GRP
(1) This chapter explains how an EEA firm and a Treaty firm can qualify for authorisation under Schedules 3 and 4 to the Act and how a UCITS qualifier is authorised under Schedule 5 to the Act. (2) This chapter also provides guidance on Schedule 3 to the Act for an incoming EEA firm that wishes to establish a branch in the United Kingdom instead of, or in addition to, providing cross border services into the United Kingdom or vice versa.
SUP 13A.1.5GRP
(1) EEA firms should note that this chapter only addresses the procedures which the FSA will follow under the Act.So, an EEA firm should consider this guidance in conjunction with the requirements with which it will have to comply in its Home State. 6(2) The guidance in this chapter represents the FSA's interpretation of the Single Market Directives, the Act and the secondary legislation made under the Act. The guidance is not exhaustive and should not be seen as a substitute
PERG 9.3.1GRP
For a body corporate to be an open-ended investment company, as defined in section 236(1) of the Act:(1) it must be a collective investment scheme;(2) it must satisfy the property condition in section 236(2); and(3) it must satisfy the investment condition in section 236(3).
PERG 9.3.2GRP
Each of these aspects of the definition is considered in greater detail in PERG 9.4 (Collective investment scheme (section 235 of the Act)) to PERG 9.9 (The investment condition: the 'satisfaction test' (section 236(3)(b) of the Act)). Although the definition has a number of elements, the FSA considers that it requires an overall view to be taken of the body corporate. This is of particular importance in relation to the investment condition (see PERG 9.6.3 G and PERG 9.6.4 G (The
PERG 9.3.5GRP
The FSA understands that the aim of the definition in section 236 of the Act is to include any body corporate which, looked at as a whole, functions as an open-ended investment vehicle. The definition operates against a background that there is a wide range of different circumstances in which any particular body corporate can be established and operated. For example, the definition applies to bodies corporate wherever they are formed. So, in the application of the definition to
PERG 9.3.6GRP
For a body corporate formed outside the United Kingdom, there is an additional issue as to how the applicable corporate law and the definition of open-ended investment company in the Act relate to one another. The FSA understands this to operate as follows. The term 'body corporate' is defined in section 417(1) of the Act (Interpretation) as including 'a body corporate constituted under the law of a country or territory outside the United Kingdom'. So, whether or not any particular
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 3.6.5GRP
Section 413 (Protected items), under which no person may be required under the Act to produce, disclose or permit the inspection of protected items, is relevant to SUP 3.6.1 R and SUP 3.6.3 G.
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 or, where applicable, tied agents1 gives the firm's auditor the same rights of access to the books, accounts and vouchers of the appointed representative or tied agent1and entitlement to information and explanations from the appointed representative's or tied agent's1 officers as are given in respect of the firm by section 341 of the Act (see also SUP 12.5.5
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 6.4.14GRP
Under section 397 of the Act (Misleading statements and practices), it is an offence, in purported compliance with a requirement imposed by or under the Act (including the directions in SUP 6.4.5 D), for a person to knowingly or recklessly give the FSA information that is false or misleading. If necessary, a firm should take appropriate professional advice when supplying information required by the FSA. An insurer, for example, may ask an actuary to check assumptions in respect
SUP 6.4.18GRP
A firm which is applying for cancellation of Part IV permission and which is not otherwise authorised by, or under, the Act should, at the same time, comply with SUP 10.13.6 R and notify the FSA of persons ceasing to perform controlled functions. These forms should give the effective date of withdrawal, if known (see SUP 10 (Approved persons)).
SUP 6.4.23GRP
If the FSA has granted an application for cancellation of Part IV permission and withdrawn a firm's status as an authorised person (see SUP 6.5) it will retain certain investigative and enforcement powers in relation to the firm as a former authorised person. These include:(1) information gathering and investigation powers in Part XI of the Act (Investigation gathering and investigations) (seeEG 3 (Use of information gathering and investigation powers)6);6(2) powers to apply to
SUP 6.4.24GRP
However, the FSA will not be able to use the following powers against former authorised persons:(1) powers to take disciplinary action against firms by publishing statements of misconduct under section 205 of the Act (Public censure) or imposing financial penalties under section 206(1) of the Act (Financial penalties); and(2) the power to require firms to make restitution under section 384 of the Act (Power of the FSA to require restitution).
SUP 6.4.27GRP
(1) Under section 52(1)of the Act (Determination of applications), the FSA has six months to consider a completed application.(2) If the FSA receives an application which is incomplete, that is, where information or a document required as part of the application is not provided, section 52(2) of the Act requires the FSA to determine the incomplete application within 12 months of the initial receipt of the application.(3) Within these time limits, however, the length of the process
SUP 2.3.1GRP
The FSA uses various methods of information gathering on its own initiative which require the cooperation of firms:(1) Visits may be made by representatives or appointees of the FSA. These visits may be made on a regular basis, on a sample basis, for special purposes such as theme visits (looking at a particular issue across a range of firms), or when the FSA has a particular reason for visiting a firm. Appointees of the FSA may include persons who are not FSA staff, but who have
SUP 2.3.3GRP
In complying with Principle 11, the FSA considers that a firm should, in relation to the discharge by the FSA of its functions under the Act:(1) make itself readily available for meetings with representatives or appointees of the FSA as reasonably requested;(2) give representatives or appointees of the FSA reasonable access to any records, files, tapes or computer systems, which are within the firm's possession or control, and provide any facilities which the representatives
SUP 2.3.5RRP
(1) A firm must permit representatives of the FSA, or persons appointed for the purpose by the FSA, to have access, with or without notice, during reasonable business hours to any of its business premises in relation to the discharge of the FSA's functions under the Act.(2) A firm must take reasonable steps to ensure that its agents, suppliers under material outsourcing arrangements and appointed representatives permit such access to their business premises. (See also, in respect
SUP 2.3.7RRP
A firm must take reasonable steps to ensure that each of its suppliers under material outsourcing arrangements deals in an open and cooperative way with the FSA in the discharge of its functions under the Act in relation to the firm.
SUP 8.2.1GRP
Under section 148of the Act (Modification or waiver of rules), the FSA may, on the application or with the consent of a firm, direct that its 9rules:99(1) are not to apply to the firm; or(2) are to apply to the firm with such modifications as may be specified.
SUP 8.2.3GRP
Section 250 of the Act and regulation 7 of the OEIC Regulations allow the FSA to waive the application of certain rules in COLL to:10(1) a person, as respects a particular AUT or ICVC, on the application or with the consent of that person; and(2) an AUT or ICVC on the application or with the consent of the manager and trustee (in the case of an AUT) or the ICVC and its depositary (in the case of an ICVC).2
SUP 8.2.5GRP
Section 250 of the Act and regulation 7 of the OEIC Regulations work by giving effect to section 148of the Act in respect of waivers given under section 250(2) and (3) and regulation 7(1) and (2) of the OEIC Regulations.
REC 4.7.1GRP
Under section 297 of the Act (Revoking recognition), the FSA has the power to revoke a recognition order relating to a recognised body.
REC 4.7.3GRP
The FSA will usually consider revoking a recognition order if:(1) the recognised body is failing or has failed to satisfy the recognition requirements or other obligations in or under the Act or, in the case of a UK RIE, the MiFID implementing requirements 1and that failure has or will have serious consequences; or(2) it would not be possible for the recognised body to comply with a direction under section 296 of the Act (FSA's power to give directions); or (3) for some other
REC 4.7.4GRP
The FSA would be likely to consider the conditions in REC 4.7.3 G (2) or REC 4.7.3 G (3) to be triggered1in the following circumstances:1(1) the recognised body appears not to have the resources or management to be able to organise its affairs so as to satisfy the recognition requirements or other obligations in or under the Act or, in the case of a UK RIE, the MiFID implementing requirements; or1(2) the recognised body does not appear to be willing to satisfy the recognition
REC 4.7.5GRP
In addition to the relevant 1factors set out in REC 4.7.4 G, the FSA will usually consider that it would not be able to secure an overseas recognised body's compliance with the recognition requirements or other obligations in or under the Act by means of a direction under section 296 of the Act, if it appears to the FSA that the overseas recognised body is prevented by any change in the legal framework or supervisory arrangements to which it is subject in its home territory from
REC 5.2.1AGRP
In addition, under section 290A of the Act (Refusal of recognition on ground of excessive regulatory provision), the FSA must refuse to make a recognition order in relation to a body applying for recognition as a UK RIE or UK RCH if it appears to the FSA that an existing or proposed regulatory provision of the applicant in connection with the applicant's business as an investment exchange or the provision by the applicant of clearing services imposes, or will impose, an excessive
REC 5.2.3GRP
An application should:(1) be made in accordance with any directions the FSA may make under section 287 (Application by an investment exchange) or section 288 (Application by a clearing house) of the Act;(2) be accompanied by the applicant's regulatory provisions and in the case of an application under section 287 of the Act information required pursuant to sub-sections 287(3)(c), (d) and (e) of the Act (see REC 5.2.3A G) 1(the material specifically prescribed in section 287 or
REC 5.2.3AGRP
1The information required pursuant to sub-sections 287(c), (d) and (e) of the Act is:(1) a programme of operations which includes the types of business the applicant proposes to undertake and the applicant's proposed organisational structure;(2) particulars of the persons who effectively direct the business and operations of the exchange; and(3) particulars of the ownership of the exchange, and in particular the identity and scale of interests of the persons who are in a position
REC 5.2.6GRP
Under section 289 of the Act (Applications: supplementary), the FSA may require the applicant to provide additional information, and may require the applicant to verify any information in any manner. In view of their likely importance for any application, the FSA will normally wish to arrange for its own inspection of an applicant's information technology systems.
REC 5.2.6AGRP
1In the case of an application to become a UK RIE, under subsection 290(1B) of the Act, the application must be determined by the FSA before the end of the period of six months beginning with the date on which it receives the completed application.
REC 5.2.12GRP
Where the FSA considers that it is unlikely to make a recognition order, or to seek the Treasury's approval, it will discuss its concerns with the applicant as early as possible with a view to enabling the applicant to make changes to its rules or guidance, or other parts of the application (see REC 5.2.7 G). If the FSA decides that it will not make a recognition order, it will follow the procedure set out in section 298 of the Act (Directions and revocation: procedure) and described
PERG 9.4.1GRP
The first element of the definition is that open-ended investment companies are a corporate form of collective investment scheme. This means that they must have the features in section 235 of the Act.
PERG 9.4.2GRP
Section 235(1) states that a collective investment scheme means any arrangements with respect to property of any description. The purpose or effect of the arrangements must be to enable the persons taking part in them to participate in or receive profits or income arising from the acquisition, holding, management or disposal of the property or sums paid out of such profits or income. The participants must not have day-to-day control over the management of the property (section
PERG 9.4.4GRP
Analysing a typical corporate structure in terms of the definition of a collective investment scheme, money will be paid to the body corporate in exchange for shares or securities issued by it. The body corporate becomes the beneficial owner of that money in exchange for rights against the legal entity that is the body corporate. The body corporate then has its own duties and rights that are distinct from those of the holders of its shares or securities. Such arrangements will,
PERG 9.4.5GRP
Where a body corporate does come within the definition of a collective investment scheme in section 235(1) to (3), the only relevant issue is to determine whether or not it is excluded. As PERG 9.2.2 G (Introduction) explains, the exclusions are in the Schedule to the Financial Services and Markets Act 2000 (Collective Investment Schemes) Order 2001 (SI 2001/1062) (Arrangements not amounting to a collective investment scheme). If a body corporate satisfies any of the exclusions
PERG 9.4.6GRP
In the FSA's view, the question of what constitutes a single scheme in line with section 235(4) of the Act does not arise in relation to a body corporate. This is simply because the body corporate is itself a collective investment scheme (and so is a single scheme). Section 235(4) contemplates a 'separate' pooling of parts of the property that is subject to the arrangements referred to in section 235(1). But to analyse a body corporate in this way requires looking through its
SUP 7.2.1GRP
The FSA has the power under section 45of the Act (Variation on the Authority's own initiative) to vary a firm's Part IV permission. This includes imposing a statutory requirement or limitation on that Part IV permission.1
SUP 7.2.2GRP
The circumstances in which the FSA may vary a firm'sPart IV permission on its own initiative under section 45 of the Act include where it appears to the FSA that:(1) one or more of the threshold conditions is or is likely to be no longer satisfied; or(2) it is desirable to vary a firm's permission in order to meet any of the FSA's regulatory objectives.33
SUP 7.2.3GRP
The FSA may also use its powers under section 45 for enforcement purposes. EG 82 sets out in detail the FSA's powers under section 45 and the circumstances under which the FSA may vary a firm's permission in this way, whether for enforcement purposes or as part of its day to day supervision of firms. This chapter provides additional guidance on when the FSA will use these powers for supervision purposes.2
SUP 7.2.4GRP
The FSA may use its powers under section 45 of the Act only in respect of a Part IV permission ; that is, a permission granted to a firm under section 42 of the Act (Giving permission) or having effect as if so given. In respect of an incoming EEA firm, an incoming Treaty firm, or a UCITS qualifier, this power applies only in relation to any top-up permission that it has. There are similar but more limited powers under Part XIII of the Act in relation to the permission of an
GEN 2.2.3RRP
Any rule in the Handbook which has the status letter "E" in the margin or heading:(1) is to be taken also to provide that contravention of the rule does not give rise to any of the consequences provided for by provisions of the Act other than section 149(Evidential provisions); and(2) incorporates the status letter "E" in the margin or heading as part of the rule.
GEN 2.2.4GRP
(1) The rules to which section 149of the Act applies ("evidential provisions") are identified in the Handbook by the status letter "E" in the margin or heading.(2) Other provisions in the Handbook, although also identified by the status letter "E" in the margin or heading, are actually not rules but provisions in codes and GEN 2.2.3 R does not apply to them. These code provisions are GEN 2.1.4 E, and those provisions in the Code of Practice for Approved Persons (APER 3 and APER
GEN 2.2.12GRP
The application of the Interpretation Act 1978 to the Handbook has the effect, in particular, that:(1) expressions in the Handbook used in the Act have the meanings which they bear in the Act, unless the contrary intention appears;(2) where reference is made in the Handbook to an enactment, it is a reference to that enactment as amended and includes a reference to that provision as extended or applied by or under any other enactment, unless the contrary intention appears; and(3)
GEN 2.2.18RRP
(1) If a firm, which is a partnership7 or unincorporated association, is dissolved, but its authorisation continues to have effect under section 32 of the Act (Partnerships and unincorporated associations) in relation to any partnership or unincorporated association7 which succeeds to the business of the dissolved firm, the successor partnership or unincorporated association7 is to be regarded as the same firm for the purposes of the Handbook unless the context otherwise requires7.77(2)
GEN 2.2.19GRP
In principle, it is possible to view a change of partners7 in a partnership7, or a change in the membership of the unincorporated association, as the formation of a new partnership7 or association. GEN 2.2.18 R reflects section 32 of the Act (Partnerships and unincorporated associations), which provides for the continuing authorisation of partnerships7 and unincorporated associations following a change in partners7 or members if certain conditions are satisfied. GEN 2.2.18 R
LR 4.2.1GRP
Section 80 (1) of the Act (general duty of disclosure in listing particulars) requires listing particulars submitted to the FSA to contain all such information as investors and their professional advisers would reasonably require, and reasonably expect to find there, for the purpose of making an informed assessment of:(1) the assets and liabilities, financial position, profits and losses, and prospects of the issuer of the securities; and(2) the rights attaching to the securi
LR 4.2.2RRP
(1) The listing particulars must contain a summary that complies with the requirements in section 87A(5) and (6) of the Act and PR 2.1.4 EU to PR 2.1.7 R (as if those requirements applied to the listing particulars).(2) Paragraph (1) does not apply:(a) in relation to specialist securities referred to in LR 4.1.1R (2); or(b) if, in accordance with PR 2.1.3 R, no summary would be required in relation to the securities.
LR 4.2.9GRP
Under section 82 of the Act (exemptions from disclosure) the FSA may authorise the omission from listing particulars of information on specified grounds.
LR 4.2.10RRP
A request to the FSA to authorise the omission of specific information in a particular case must:(1) be in writing from the issuer;(2) identify the specific information concerned and the specific reasons for the omission; and(3) state why in the issuer's opinion one or more of the grounds in section 82 of the Act applies.
LR 4.2.11RRP
For the purposes of section 82(1)(g) of the Act, specialist securities are specified.
FEES 5.2.1GRP
Paragraph 9 of Schedule 17 to the Act (The Ombudsman Scheme) requires FOS Ltd to adopt an annual budget which has been approved by the FSA. The annual budget must distinguish between the costs of operating the Compulsory Jurisdiction, the Consumer Credit Jurisdiction4 and the Voluntary Jurisdiction.
FEES 5.2.2GRP
Section 234 of the Act (Industry Funding) enables the FSA to require the payment to it or to FOS Ltd, by firms or any class of firm, of specified amounts (or amounts calculated in a specified way) to cover the costs of: (1) the establishment of 1the Financial Ombudsman Service; and (2) its operation in relation to the Compulsory Jurisdiction.
FEES 5.2.3GRP
Paragraph 15 of Schedule 17 to the Act enables FOS Ltd to require firms subject to the Compulsory Jurisdiction and any other respondents to a complaint to pay specified fees to it in respect of complaints closed by the Financial Ombudsman Service.
FEES 5.2.5GRP
Paragraph 18 of Schedule 17 to the Act enables FOS Ltd to require VJ participants to pay to it such amounts at such times as it specifies in the standard terms.
FEES 5.2.6GRP
The relevant provisions of the rules in FEES 5 and FEES 2 will be applied to VJ participants through the standard terms made by FOS Ltd under paragraph 18 of Schedule 17 to the Act (see DISP 4).
COND 1.3.1GRP
The guidance in COND 2 explains each threshold condition in Part I of Schedule 6 (threshold conditions) to the Act and how the FSA will interpret it in practice. An overview of the threshold conditions is given in COND 1 Annex 1 G. This guidance is not, however, exhaustive and is written in very general terms. A firm will need to have regard to the obligation placed upon the FSA under section 41 (the threshold conditions) of the Act; that is, the FSA must ensure that the firm
COND 1.3.4GRP
(1) For ease of reference, the threshold conditions in or under Schedule 6 to the Act have been quoted in full in COND 2. (2) As these provisions impose obligations, they are printed in bold type. The use of bold type is not intended to indicate that these quotations are rules made by the FSA.(3) Where words have been substituted for the text of these provisions the substitutions are enclosed in square brackets ([ ]). However, none of the changes made by the FSA in these quotations
SUP 14.6.1GRP
Section 34 of the Act states that an incoming EEA firm no longer qualifies for authorisation under Schedule 3 to the Act if it ceases to be an incoming EEA firm as a result of:(1) having its EEA authorisation withdrawn by its Home State regulator; or(2) ceasing to have an EEA right in circumstances in which EEA authorisation is not required; this is relevant to a financial institution that is a subsidiary of a credit institution (of the kind mentioned in Article 19of the Banking
SUP 14.6.2GRP
In addition, under section 34(2) an incoming EEA firm may ask the FSA to give a direction cancelling its authorisation under Schedule 3 to the Act.
SUP 14.6.9GRP
Section 35 of the Act states that an incoming Treaty firm no longer qualifies for authorisation under Schedule 4 to the Act if its Home State authorisation is withdrawn.
SUP 14.6.10GRP
In addition, under section 35(2) an incoming Treaty firm may ask the FSA to give a direction cancelling its authorisation under Schedule 4 to the Act.
SUP 14.6.11GRP
Section 36 of the Act states that a UCITS qualifier may ask the FSA to give a direction cancelling its authorisation under paragraph 1(1) of Schedule 5 to the Act. UCITS qualifiers should also refer to COLLG 3.1.11 G (Revocation of recognition of overseas schemes (section 279)3).133
SUP 5.6.1GRP
Within the legal constraints that apply, the FSA may pass on to a skilled person any information which it considers relevant to the skilled person's function. A skilled person, being a primary recipient under section 348 of the Act (Restrictions on disclosure of confidential information by Authority etc.), is bound by the confidentiality provisions in Part XXIII of the Act (Public record, disclosure of information and cooperation) as regards confidential information he receives
SUP 5.6.2GRP
The limitations in the following sections of the Act are relevant to this chapter:(1) section 175(5) (Information and documents: supplemental provisions) under which a person may be required under Part XI of the Act (Information Gathering and Investigations) to disclose information or produce a document subject to banking confidentiality (with exceptions); and (2) section 413 (Protected items), under which no person may be required to produce, disclose or allow the inspection
PERG 9.8.1GRP
The test in section 236(3)(a) of the Act is whether the reasonable investor would expect that, were he to invest, he would be in a position to realise his investment within a period appearing to him to be reasonable. In the FSA's view, this is an objective test with the appropriate objective judgment to be applied being that of the hypothetical reasonable investor with qualities such as those mentioned in PERG 9.7.2 G (The investment condition: the 'reasonable investor').
PERG 9.8.2GRP
In the FSA's view, the 'realisation' of an investment means converting an asset into cash or money. The FSA does not consider that 'in specie' redemptions (in the sense of exchanging shares or securities of BC with other shares or securities) will generally count as realisation. Section 236(3)(a) refers to the realisation of an investment, the investment being represented by the 'value' of shares or securities held in BC. In the FSA's view, there is no realisation of value where
PERG 9.8.5GRP
The use of an expectation test ensures that the definition of an open-ended investment company is not limited to a situation where a holder of shares in, or securities of, a body corporate has an entitlement or an option to realise his investment. It is enough if, on the facts of any particular case, the reasonable investor would expect that he would be able to realise the investment. The following are examples of circumstances in which the FSA considers that a reasonable investor
PERG 9.8.7GRP
In the FSA's view, the fact that a person may invest in the period shortly before a redemption date would not cause a body corporate, that would not otherwise be regarded as such, to be open-ended. This is because the investment condition must be applied in relation to BC as a whole (see PERG 9.6.3 G (The investment condition (section 236(3) of the Act): general).
PERG 9.8.8GRP
Similarly, if BC issues shares or securities on different terms as to the period within which they are to be redeemed or repurchased (see PERG 9.6.4 G (The investment condition (section 236(3) of the Act): general), BC must be considered as a whole. Whether or not the expectation test is satisfied in relation to a particular body corporate is bound to involve taking account of the terms on which its shares or securities, or classes of shares or securities, are issued. But this
PERG 8.12.12GRP
This exemption covers twodistinct situations. Article 16(1) applies to all exempt persons where they make financial promotions for the purpose of their exempt activities. These persons would include appointed representatives, recognised investment exchanges, recognised clearing houses and those who are able to take advantage of the Exemption Order. So, it allows exempt persons both to promote that they have expertise in certain controlled activities and to make financial promotions
PERG 8.12.13GRP
Article 16 (2) applies to unsolicited real time financial promotions made by an appointed representative in carrying on the business:(1) for which his principal has accepted responsibility for the purposes of section 39 of the Act (Exemption of appointed representatives); and(2) in relation to which the appointed representative is exempt under section 39.In addition, the financial promotion may only be made in the circumstances in which it could be made by the appointed representative'sprincipal
PERG 8.12.18GRP
The purpose of these 1exemptions1 is to ensure that, subject to certain conditions, the restriction in section 21 of the Act does not apply to those who merely transport the financial promotions of other persons. Obvious examples here are postal and Internet service providers, courier companies and telecommunications companies. PERG 8.6.5 G explains that such persons may not be regarded as communicating a financial promotion simply because they have distributed it. Article 18
PERG 8.12.21GRP
Financial promotions made only to or directed only at certain types of person who are sophisticated enough to understand the risks involved are exempt. These are:(1) authorised persons;(2) exempt persons (where the financial promotion relates to a controlled activity which is a regulated activity for which the person is exempt);(3) governments and local authorities; and(4) persons whose ordinary business involves carrying on a controlled activity of the kind to which the financial
PERG 8.12.23GRP
The broad scope of the restriction in section 21 of the Act will inevitably mean that it will, from time to time, apply to journalists and others who make their living from commenting on news including financial affairs (such as broadcasters). This is liable to happen when such persons offer share tips or recommend the use of a particular firm for investment purposes. Such tips or recommendations are likely to amount to inducements to engage in investment activity.
PERG 8.12.36GRP
The first part of the exemption (referred to in PERG 8.12.34G (1)) specifically precludes any form of written communication. However, the FSA understands that the Treasury did not intend to prohibit the use of written words in the form of subtitling. These may be an aid to those with hearing difficulties or to interpret a foreign language, or the use of captions which supplement a spoken communication by highlighting aspects of it without introducing anything new. The FSA cannot