Related provisions for MCOB 13.3.4C
21 - 40 of 667 items.
LR 8.4.2 R to LR 8.4.4 G2 apply in relation to an application for admission of equity shares5if an applicant does not have equity shares5already listed and:255(1) the production of a prospectus or equivalent document1is required; or(2) the application is accompanied by a certificate of approval from another competent authority; or(3) the application is accompanied by a summary document as required byPR 1.2.3R (8).
A sponsor must not submit to the FSA an application on behalf of an applicant, in accordance with LR 3, unless it has come to a reasonable opinion, after having made due and careful enquiry, that:(1) the applicant has satisfied all requirements of the listing rules relevant to an application for admission to listing;(2) the applicant has satisfied all applicable requirements set out in the prospectus rules unless the home Member State of the applicant is not, or will not be, the
A sponsor must:(1) submit a completed Sponsor's Declaration on an Application for Listing to the FSA2 either:2(a) on the day the FSA is to consider the application for approval of the prospectus and prior to the time the prospectus is approved; or(b) at a time agreed with the FSA, if the FSA is not approving the prospectus or if it is determining whether a document is an equivalent document1;(2) submit a completed Shareholder Statement or Pricing Statement, as applicable, to the
A sponsor must not submit to the FSA an application on behalf of an applicant, in accordance with LR 3 (Listing applications), unless it has come to a reasonable opinion, after having made due and careful enquiry, that:(1) the applicant has satisfied all requirements of the listing rules relevant to an application for admission to listing;(2) the applicant has satisfied all applicable requirements set out in the prospectus rules unless the home Member State of the applicant is
A sponsor must:(1) submit a completed Sponsor's Declaration on an Application for Listing to the FSA either:(a) on the day the FSA is to consider the application for approval of the prospectus and prior to the time the prospectus is approved; or11(b) at a time agreed with the FSA if the FSA is not approving the prospectus or if it is determining whether a document is an equivalent document1;(2) submit a completed Shareholder Statement or Pricing Statement, as applicable, to the
LR 8.4.12 R to LR 8.4.13 R apply in relation to transactions involving an issuer with 5 a premium listing4 of equity shares5that:54(1) is required to produce a class 1 circular; or4(2) is producing a circular that proposes a reconstruction or a re-financing which does not constitute a class 1 transaction; or(3) is producing a circular for the proposed purchase of own shares;(a) which does not constitute a class 1 circular; and(b) is required by LR 13.7.1R (2) to include a working
A sponsor must not submit to the FSA, on behalf of a listed company, an application for approval ofa circular regarding a transaction set out in LR 8.4.11 R, unless the sponsor has come to a reasonable opinion, after having made due and careful enquiry, that:(1) the listed company has satisfied all requirements of the listing rules relevant to the production of a class 1 circular or other circular;(2) the transaction will not have an adverse impact on the listed company's ability
A sponsor acting on a transaction falling within LR 8.4.11 R must:(1) submit a completed Sponsor's Declaration for the Production of a Circular to the FSA on the day the circular is to be approved by the FSA and prior to the time the circular is approved;(2) submit a completed Pricing Statement, if applicable, to the FSA by 9 a.m on the day the FSA is to consider the application; and(3) ensure that all matters known to it which, in its reasonable opinion, should be taken into
In relation to a proposed transfer under LR 5.4A, a sponsor appointed in accordance with LR 8.2.1A Rmust:(1) submit a letter to the FSA setting out how the issuer satisfies each listing rule requirement relevant to the category of listing to which it wishes to transfer, by no later than when the first draft of the circular or announcement required under LR 5.4A is submitted;(2) submit a completed Sponsor’s Declaration to the FSA for the proposed transfer on the day the circular
A sponsor must not submit to the FSA on behalf of an issuer a final circular or announcement for approval or a Sponsor’s Declaration for a transfer, unless it has come to a reasonable opinion, after having made due and careful enquiry, that:(1) the issuer satisfies all eligibility requirements of the listing rules that are relevant to the new category to which it is seeking to transfer;(2) the issuer has satisfied all requirements relevant to the production of the circular required
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
The FSA expects to request meetings or access to business premises during reasonable business hours. The FSA also normally expects to be able to give reasonable notice to a firm or connected person when it seeks information, documents, meetings or access to business premises. On rare occasions, however, the FSA may seek access to premises without notice. The prospect of unannounced visits is intended to encourage firms to comply with the requirements and standards under the
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
In complying with Principle 11, the FSA considers that a firm should take reasonable steps to ensure that the following persons act in the manner set out in SUP 2.3.3 G: (1) its employees, agents and appointed representatives; and(2) any other members of its group, and their employees and agents.(See also, in respect of appointed representatives, SUP 12.5.3 G (2)).
(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
The cooperation that a firm is expected to procure from such suppliers is similar to that expected of the firm, in the light of the guidance in SUP 2.3.3 G to SUP 2.3.4 G, but does not extend to matters outside the scope of the FSA's functions in relation to the firm. SUP 2.3.5 R (2) also requires a firm to take reasonable steps regarding access to the premises of such suppliers.
When a firm appoints or renews the appointment of a supplier under a material outsourcing arrangement, it should satisfy itself that the terms of its contract with the supplier require the supplier to give the FSA access to its premises as described in SUP 2.3.5 R (2), and to cooperate with the FSA as described in SUP 2.3.7 R. The FSA does not consider that the 'reasonable steps' in SUP 2.3.7 R would require a firm to seek to change a contract, already in place when that rule
The FSA may ask a firm to provide it with information at the request of or on behalf of other regulators to enable them to discharge their functions properly. Those regulators may include overseas regulators or the Takeover Panel. The FSA may also, without notifying a firm, pass on to those regulators information which it already has in its possession. The FSA's disclosure of information to other regulators is subject to the obligation described in SUP 2.2.4 G (Confidentiality
A firm should have regard to the urgency and significance of a matter and, if appropriate, should also notify its usual supervisory contact at the FSA by telephone or by other prompt means of communication, before submitting a written notification. Oral notifications should be given directly to the firm's usual supervisory contact An oral notification left with another person or left on a voicemail or other automatic messaging service is unlikely to have been given appropria
The FSA is entitled to rely on any information it receives from a firm and to consider any notification received as being made by a person authorised by the firm to do so. A firm should therefore consider whether it needs to put procedures in place to ensure that only appropriate employees make notifications to the FSA on its behalf.
Unless stated in the notification rule, or on the relevant form (if specified), a written notification required from a firm under any notification rule must be:2(1) given to or addressed for the attention of the firm's usual supervisory contact at the FSA; and(2) delivered to the FSA by one of the methods in :
If the firm or its group is subject to lead supervision arrangements by the FSA, the firm or group may give or address a notice under SUP 15.7.4 R(1) to the supervisory contact at the FSA, designated as lead supervisor, if the firm has chosen to make use of the lead supervisor as a central point of contact (see SUP 1.5).
If a firm is a member of a group which includes more than one firm, any one undertaking in the group may notify the FSA on behalf of all firms in the group to which the notification applies. In this way, that undertaking may satisfy the obligation of all relevant firms in the group to notify the FSA. Nevertheless, the obligation to make the notification remains the responsibility of the individual firm itself. See also SUP 15.7.3 G.
If a notification rule requires notification within a specified period:(1) the firm must give the notification so as to be received by the FSAno later than the end of that period; and (2) if the end of that period falls on a day which is not a business day, the notification must be given so as to be received by the FSA no later than the first business day after the end of that period.
The FSA has made arrangements with the Society of Lloyd's with respect to the monitoring of underwriting agents. Underwriting agents should check whether these arrangements provide for any notifications required under this chapter to be sent to the Society instead of to the FSA. [For further details see the FSA website.]
7When the FSA receives a notice from a UK MiFID investment firm (see SUP 13.6.5BG (1)), it is required by regulation 11A(3) to inform the relevant Host State regulator of the proposed change as soon as reasonably practicable. The firm in question may make the change once the period of one month beginning with the day on which it gave notice has elapsed.
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 circumstances relating to the firm, for example:(1) attitude of the firm: whether the firm is being cooperative;(2) history of similar issues: whether similar issues have arisen in the past and, if so, whether timely corrective action was taken;(3) quality of a firm's systems and records: whether the FSA has confidence that the firm has the ability to provide the required information;(4) objectivity: whether the FSA has confidence in the firm's willingness
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
The FSA will have regard to FSA-related considerations including:(1) FSA expertise: whether the FSA has the necessary expertise; and(2) FSA resources: whether the resources required to produce a report or to make enquiries are available within the FSA, or whether the exercise will be the best use of the FSA's resources at the time.
The FSA will send a notice in writing requiring the person in SUP 5.2.1 G to provide a report by a skilled person on any matter if it is reasonably required in connection with the exercise of its functions conferred by or under the Act. The FSA may require the report to be in whatever form it specifies in the notice (SUP 5 Annex 2 summarises the appointment and reporting processes).
As part of the decision making process the FSA will normally contact the person in SUP 5.2.1 G to discuss its needs before finalising its decision to require a report by a skilled person. This will provide an opportunity for discussion about the appointment, whether an alternative means of obtaining the information would be better, what the scope of a report should be, who should be appointed, and the likely cost.
The FSA will give written notification to the person in SUP 5.2.1 G of the purpose of the report, its scope, the timetable for completion and any other relevant matters. The FSA will state the matters which the report is to contain as well as any requirements as to the report's format. For example, a report on controls may be required to address key risks, key controls and the control environment. The FSA attaches importance to there being a timetable for each report and to
The written notification in SUP 5.4.3 G may be preceded or followed by a discussion of the FSA's requirements and the reasons for them. This may involve the FSA, the person in SUP 5.2.1 G and the person who has been, or is expected to be, appointed as the skilled person. The FSA recognises that there will normally be value in holding discussions involving the skilled person at this stage. These discussions may include others if appropriate.
When considering whether to nominate or approve a skilled person to make a report, the FSA will have regard to the circumstances of the case, including whether the proposed skilledperson appears to have:(1) the skills necessary to make a report on the matter concerned;(2) the ability to complete the report within the time expected by the FSA;(3) any relevant specialised knowledge, for instance of the person in SUP 5.2.1 G, the type of business carried on by the person in SUP 5.2.1
In appropriate circumstances, it may be cost effective for the FSA to nominate or approve the appointment of a skilled person who has previously acted for, or advised, the person in SUP 5.2.1 G. For example, the FSA may nominate, or approve the appointment of, the auditor of a person in SUP 5.2.1 G to prepare a report taking into account, where relevant, the considerations set out in SUP 5.4.7 G.
The FSA will normally require the person in SUP 5.2.1 G to appoint the skilled person to report to the FSA through that person. In the normal course of events the FSA expects that the person in SUP 5.2.1 G will be given the opportunity to provide written comments on the report prior to its submission to the FSA (SUP 5 Annex 2 summarises the reporting process).
The FSA will normally specify a time limit within which it expects the skilled person to deliver the report. The skilled person should, in complying with its contractual duty under SUP 5.5.1 R, take reasonable steps to achieve delivery by that time. If the skilled person becomes aware that the report may not be delivered on time, he should inform the FSA and the person in SUP 5.2.1 G as soon as possible. If the skilled person becomes aware that there may be difficulties delivering
73A firm which manages the assets of an occupational pension scheme must notify the FSA as soon as reasonably practicable if it receives any request or instruction from a trustee which it:(1) knows; or(2) on substantial grounds:(a) suspects; or(b) has cause reasonably to suspect;is at material variance with the trustee's duties.1
(1) An insurer must notify the FSAin respect of any firm (the "intermediary") as soon as reasonably practicable if:(a) any amount of commission due from the intermediary to the insurer in accordance with an indemnity commission clawback arrangement remains outstanding for four months after the date when the insurer gave notice to the intermediary that the relevant premium had not been paid; or(b) any amount of commission due from the intermediary to the insurer as a result of
(1) 467In accordance with article 3111of the Money Laundering Regulations, with effect from 15 December 200711, a firm is required to notify the FSA:1111(a) before it begins or within 28 days of it beginning11; and(b) immediately11 after it ceases;11to operate a money service business or a trust or company service provider.1111(2) The notification referred to in (1) should be made in accordance with the requirements in SUP 15.7 (Form and method of notification)
(1) 9If a firm begins or ceases to hold itself out as acting as a CTF provider, it must notify the FSA as soon as reasonably practicable that it has done so.(2) A firm that acts as a CTF provider must provide theFSA, as soon as reasonably practicable, with details of:(a) any third party administrator that it engages;(b) details of whether it intends to offer HMRC allocated CTFs12; and12(c) whether it intends to provide its own stakeholder CTF account.
Method of submission of reports (see SUP 16.3.8 R)
Method of delivery |
|
1. |
Post to the published address of the FSA for postal submission of reports |
2. |
Leaving the report marked for the attention of "Central Reporting"22 at the published address of the FSA for hand delivery of reports and obtaining a dated receipt |
3. |
Electronic mail or fax to the published e-mail address or fax number of the FSA's Central Reporting team.22 22 |
4.22 |
Online submission via the appropriate systems accessible from the22FSA's website at www.fsa.gov.uk822 |
8
- (1)
The current published address of the FSA for postal submission of reports is:
Central Reporting22
The Financial ServicesAuthority
PO BOX 35747
London E14 5WP
- (2)
The current published address of the FSA for hand delivery of reports is:
- (a)
Central Reporting22
The Financial ServicesAuthority
25 The North Colonnade
Canary Wharf
London E14 5HS
if the firm's usual supervisory contact at the FSA is based in London, or:
- (b)
The Financial ServicesAuthority
Quayside House
127 Fountainbridge
Edinburgh EH3 8DJ
if the firm's usual supervisory contact at the FSA is based in Edinburgh.2
- (a)
- (3)
22The current published email address and fax number for the FSA's Central Reporting team is DMT.Inbox@fsa.gov.uk (except in the case of close links reporting where the email address is closelinks@fsa.gov.uk) and 020 7066 3905. The Central Reporting team does not handle general correspondence between firms and the FSA. Accordingly, firms should not make submissions to the Central Reporting team's email address or fax number other than as directed in SUP 16.3.8 R.
(1) A firm must submit a report required by this chapter in the frequency, and so as to be received by the FSA no later than the due date, specified for that report.(2) If the due date for submission of a report required by this chapter falls on a day which is not a business day, the report must be submitted so as to be received by the FSA no later than the first business day after the due date. (3) If the due date for submission of a report required by this chapter is a set
9Failure to submit a report in accordance with the rules in, or referred to in,12 this chapter or the provisions of relevant legislation12 may also lead to the imposition of a financial penalty and other disciplinary sanctions (seeDEPP 6.6.1 G-DEPP 6.6.5 G16). A firm may be subject to reporting requirements under relevant legislation other than the Act, not referred to in this chapter. An example of this is reporting to the FSA by building societies under those parts of the Building
The firm is responsible for ensuring delivery of the required report at the FSA's offices by the due date. If a report is received by the FSA after the due date and the firm believes its delivery arrangements were adequate, it may be required to provide proof of those arrangements. Examples of such proof would be:(1) "proof of posting" receipts from a UK post office or overseas equivalent which demonstrates that the report was posted early enough to allow delivery by the due
(1) A firm must notify the FSA if it changes its accounting reference date.(2) When a firm extends its accounting period, it must make the notification in (1) before the previous accounting reference date.(3) When a firm shortens its accounting period, it must make the notification in (1) before the new accounting reference date.4(4) SUP 16.10.4A R to SUP 16.10.4C G (Method of reporting Requirement to check the accuracy of standing data and to report changes to the FSA changes
SUP 16.2.1 G emphasises the importance to the FSA of timely and accurate information. The extension of a firm's accounting period to more than 15 months may hinder the timely provision of relevant and important information to the FSA. This is because many due dates for reporting to the FSA are linked to firms'accounting reference dates. Indeed, for some categories of firm, the only reports required by the FSA have due dates for submission which are linked to the firm's accounting
SUP 2.3.12 G states that the FSA may pass to other regulators information which it has in its possession. Such information includes information contained in reports submitted under this chapter. The FSA's disclosure of information to other regulators is subject to SUP 2.2.4 G (Confidentiality of information).
(1) A firm other than a credit union wishing to vary its Part IV permissionmust apply online at www.fsa.gov.uk using the form specified on the FSA's ONA system.1414(2) A credit union wishing to vary its Part IV permission must apply using the form in SUP 6 Ann 5D and submit its application in the way set out in SUP 15.7.4 R to SUP 15.7.9 G (Form and method of notification).1414(3) Until the application has been determined, a firm which submits an application for variation of
DEPP9gives guidance on the FSA's decision making procedures including the procedures it will follow if it proposes to refuse an application for variation of Part IV permission either in whole or in part (for example, an application granted by the FSA but subject to limitations or requirements not applied for).9
(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
The FSA considers the effect of each of the conditions in PERG 8.14.3G (1) to PERG 8.14.3G (3) to be as follows.(1) The first condition requires the financial promotion to be made, so ruling out any financial promotions which are directed at persons. The effect of article 6(b) and (e) of the Financial Promotion Order is that a communication is made to a person when it is addressed to him and that person to whom the financial promotion is addressed is its recipient. This means
In the FSA's opinion, the indicators referred to in PERG 8.14.4 G suggest that there are two essential elements of a one-off financial promotion. These are that it is tailored to the circumstances of the recipient and that it is individual in nature (in that it is not simply a personalised letter sent out as part of a general mailshot). Apart from this there is no need for the communication to be an isolated instance. For example, the fact that there may be a considerable number
In the FSA's view, a group of recipients who may be engaging in investment activity jointly could include:(1) a married couple;(2) two or more persons who will invest jointly in a product (for example, a cohabiting couple who are not married or members of a family);(3) the directors of a company or partners in a firm;(4) members of a group of companies;(5) the participants in a joint commercial enterprise;(6) the members of an investment club; and(7) the managers or prospective
A financial promotion may fail to satisfy all of the indicators referred to in PERG 8.14.4 G because it is addressed to more than one recipient and they are not persons who will engage in investment activity jointly. In the FSA's view, such a financial promotion is capable of being one-off where the persons are to enter into the same transaction and the promotion is tailored to their individual circumstances. This may typically happen during negotiations for the sale of a company
In the FSA's view, a person such as an investment manager or adviser is not conducting an organised marketing campaign purely because he regularly provides a particular client with financial promotions as part of his service. Neither is such a person conducting an organised marketing campaign purely because he may have several clients whose personal circumstances and objectives may suggest that a particular investment opportunity may attract them. If he considers the individual
In the FSA's view, a person will not be making one-off financial promotions simply by sending out a series of letters to a number of customers or potential customers where a few details are changed (such as the name and address) but the bulk of the letter is standard. Such letters would be likely to be part of an organised marketing campaign.
In the FSA's view, the article 28A exemption should provide scope for persons such as professional advisers to make unsolicited real time financial promotions in various situations. For example, when approaching persons with whom their clients are proposing to do business or those persons’ professional advisers. The exemption will not apply where the financial promotions are part of an organised marketing campaign (see PERG 8.14.4G (3)). So, in cases where a professional adviser
Whether or not it would be reasonable to believe that any person understands the risks associated with the investment activity covered in a financial promotion or would expect to be contacted about it must be judged on the particular circumstances. In the FSA's opinion, the exemption requires that the recipient has the required understanding of risk at the time the promotion is made to him. However, it would be reasonable to believe that a person understands the risk involved
In order to make an unsolicited real time financial promotion, an overseas communicator must rely on either article 32 or article 33. Article 32 provides an exemption for unsolicited real time financial promotions made by an overseas communicator to persons who were previously overseas and were a customer of his then. This is subject to certain conditions, including that, in broad terms, the customer would reasonably expect to be contacted about the subject matter of the financial
This exemption allows a person in another EEA State who lawfully carries on a controlled activity in that State to promote into the United Kingdom. The terms of the exemption are that the promotion must comply with the rules inCOBS 45or MCOB 3 (as relevant). Care should be taken as any failure to satisfy any of the relevant requirements of these rules may mean that this exemption is not satisfied and that the financial promotion may breach section 21 if it has not been approved
In the FSA's opinion;(1) it will not matter that a person enters into arrangements for investment or other purposes provided that he also enters them into for commercial purposes; and(2) each participant must be carrying on the business in question in their own right.This means that the sponsors or promoters of a company who arrange for private investors to become shareholders will not be setting up a joint enterprise simply because the company may intend to carry on a relevant
A person seeking to make a financial promotion to another person may wish to make enquiries of that person to establish whether he is certified. Unless another exemption applies or the financial promotion is approved by an authorised person, such enquiries will not be possible if the enquiry communication is an inducement or invitation to engage in investment activity. In the FSA's view, a communication which is merely an enquiry seeking to establish that a person holds a current
Article 49(4) gives the list of conditions which, if all are met, is proof that the financial promotion is directed at relevant persons. It is not necessary for all or any of the conditions to be met for a financial promotion to be regarded as directed at relevant persons. Ultimately the matter will be one of fact to be determined by taking account of the circumstances in which the financial promotion is made. In the FSA's opinion, it is not necessary for a financial promotion,
To be a sophisticated investor for the purposes of article 50, the recipient of a financial promotion must have a current certificate from an authorised person stating that he has enough knowledge to be able to understand the risks associated with the description of investment to which the financial promotion relates. Where the financial promotion is an outgoing electronic commerce communication3, the certificate may be signed by a person who is entitled, under the law of an EEA
The exemption also requires that certain warnings are given to the potential investor. In this respect, article 50(3)(d) provides that the financial promotion must state that there is a significant risk of losing all monies invested or of incurring additional liability. In the FSA's view, these are alternative statements and whichever is the relevant statement should be included. If there is no risk of incurring additional liability the statement may simply say that there is a
In the FSA's view, a main aim of the exemption (see PERG 8.14.35G (1)) is to remove from the scope of section 21 a financial promotion concerning the sale of a corporate business by a person who, either alone or with others, controls the business to another person who, either alone or with others, proposes to control the business.
In the FSA's opinion, provided that the purpose of the transaction is for the buyer to acquire the necessary control, it is irrelevant who is the seller. The exemption specifically applies to financial promotions which are communicated on behalf of the parties or potential parties to the transaction. The Treasury, in its consultative document “Financial Services and Markets Act two year review: Changes to secondary legislation Proposals for change, February 2004” proposed changes
Several exemptions, including article 43 of the Financial Promotion Order (Members and creditors of certain bodies corporate), apply only in relation to relevant investments being shares or debentures or alternative debentures7 in the body corporate or a member of its group, or warrants or certificates representing certain securities relating to such shares or debentures or alternative debentures.7 In the FSA's view, an exchangeable debt security which is partly a debenture or
The exemptions for bearer instruments (articles 41 and 42 of the Financial Promotion Order) relate to financial promotions made to or directed at persons entitled to bearer instruments. For clarity, the FSA takes the view that persons who hold bearer instruments through a clearing system such as Euroclear or Clearstream are persons entitled to those instruments for the purposes of articles 41 and 42.
SYSC 12.1.13 R (2)(dA) requires the firm to ensure that the risk management processes and internal control mechanisms at the level of any UK consolidation group or non-EEA sub-group of which a firm is a member comply with the obligations set out in this section on a consolidated (or sub-consolidated) basis. In the FSA's view, the requirement to apply this section at group, parent undertaking and subsidiary undertaking levels (as provided for in SYSC 19A.3.1 R (1)) is in line
(1) This section applies in relation to Remuneration Code staff, except as set out in (3).(2) When establishing and applying the total remuneration policies for Remuneration Code staff, a firm must comply with this section in a way and to the extent that is appropriate to its size, internal organisation and the nature, the scope and the complexity of its activities (the remuneration principles proportionality rule).(3) Paragraphs (1) and (2) do not apply to the requirement for
Remuneration Code staff comprises categories of staff including senior management, risk takers, staff engaged in control functions and any employee receiving total remuneration that takes them into the same remuneration bracket as senior management and risk takers, whose professional activities have a material impact on the firm's risk profile.[Note: article 92(2) of CRD paragraph 23 of Annex V to the Banking Consolidation Directive]
(1) This Remuneration Principle stresses the importance of risk adjustment in measuring performance, and the importance within that process of applying judgment and common sense. A firm should ask the risk management function to validate and assess risk-adjustment techniques, and to attend a meeting of the governing body or remuneration committee for this purpose.(2) A number of risk-adjustment techniques and measures are available, and a firm should choose those most appropriate
In the FSA's view, circumstances in which a person will be using a personal hedging strategy include entering into an arrangement with a third party under which the third party will make payments, directly or indirectly, to that person that are linked to or commensurate with the amounts by which the person'sremuneration is subject to reductions.
(1) Taking account of the remuneration principles proportionality rule, the FSA does not generally consider it necessary for a firm to apply the rules referred to in (2) where, in relation to an individual ("X"), both the following conditions are satisfied:(a) Condition 1 is that Xs variable remuneration is no more than 33% of total remuneration; and(b) Condition 2 is that Xs total remuneration is no more than 500,000.(2) The rules referred to in (1) are those relating to:(a)
In the FSA's view, variable remuneration can be awarded to Remuneration Code staff in the form of retention awards where it is compatible with the Remuneration Code general requirement to do so. The FSA considers this is likely to be the case only where a firm is undergoing a major restructuring and a good case can be made for retention of particular key staff members on prudential grounds. Proposals to give retention awards should form part of any notice of the restructuring
(1) Deferred remuneration paid in shares or share-linked instruments should be made under a scheme which meets appropriate criteria, including risk adjustment of the performance measure used to determine the initial allocation of shares. Deferred remuneration paid in cash should also be subject to performance criteria.(2) The FSA would generally expect a firm to have a firm-wide policy (and group-wide policy, where appropriate) on deferral. The proportion deferred should generally
(1) Variable remuneration may be justified, for example, to incentivise employees involved in new business ventures which could be loss-making in their early stages.(2) The governing body (or, where appropriate, the remuneration committee) should approve performance adjustment policies, including the triggers under which adjustment would take place. The FSA may ask firms to provide a copy of their policies and expects firms to make adequate records of material decisions to operate
(1) Section 139A(9) of the Act enables the FSA to make rules that render void any provision of an agreement that contravenes specified prohibitions in the Remuneration Code, and that provide for the recovery of any payment made, or other property transferred, in pursuance of such a provision. SYSC 19A.3.53A R and1SYSC 19A.3.54 R (together with SYSC 19A Annex 1) are such rules1 and render1 void provisions of an agreement that contravene the specified prohibitions on guaranteed
The issuer must ensure that a senior manager of the issuer verifies the application by confirming on the FSA's form that the issuer has obtained the appropriate third party advice or reports as required by RCB 2.3.16 D and is satisfied that:(1) the information provided in the application is correct and complete; and (2) the arrangements relating to the covered bond or programme will comply with the requirements in the RCB Regulations and in RCB.
Paragraph 17 of Schedule 1 to2 and section 99 of2 the Act,7 regulation 92 of the Payment Services Regulations and 3 regulation 59 of the Electronic Money Regulations7 enable the FSA to charge fees to cover its costs and expenses in carrying out its functions. The corresponding provisions for the FSCS levy ,5FOS levies and CFEB levies5 are set out in FEES 6.1,5FEES 5.2 and FEES 7.1.4 G5 respectively. Case fees payable to the FOS Ltd are set out in FEES 5.5A. 621Fee-paying payment
3Regulation 92 of the Payment Services Regulations and regulation 59 of the Electronic Money Regulations each provide7 that the functions of the FSA under the respective7 regulations are treated for the purposes of paragraph 17 of Schedule 1 to the Act as functions conferred on the FSA under the Act. Paragraphs 17(2) and (3) however, have not been included .7 These are, respectively, the FSA's7 obligation to ensure that the amount of penalties received or expected to be received
The FSA fees payable will vary from one financial year to another, and will reflect the FSA's funding requirement for that period and the other key components, as described in FEES 2.1.7G. Periodic fees, which will normally be payable on an annual basis, will provide the majority of the funding required to enable the FSA to undertake its statutory functions.
The key components of the FSA fee mechanism (excluding the FSCS5levy, the FOS5 levy and case fees, and the CFEB levy5which are dealt with in FEES 5,5FEES 6 and FEES 7)5 are:555(1) a funding requirement derived from:(a) the FSA's financial management and reporting framework;(b) the FSA's budget; and(c) adjustments for audited variances between budgeted and actual expenditure in the previous accounting year, and reserves movements (in accordance with the FSA's reserves policy);(2)
A1sponsor must in relation to a sponsor service:11(1) referred to in LR 8.2.1 R, 1provide assurance to the FSA when required that the responsibilities of the listed company or applicant under the listing rules have been met; and(2) referred to in LR 8.2.1 R, LR 8.2.2 R or LR 8.2.3 R, 1guide the listed company or applicant in understanding and meeting its responsibilities under the listing rules anddisclosure rules and transparency rules.2112
The1sponsor will be the main point of contact with the FSA for any matter referred to in LR 8.2.1 The FSA expects to discuss all issues relating to a transaction and any draft or final document directly with the sponsor. However, in appropriate circumstances, the FSA will communicate directly with the listed company or applicant.11
1LR 8.3.11 R recognises that there will be some conflicts of interest that cannot be effectively managed. Providing sponsor services in those cases could adversely affect both a sponsor's ability to perform its functions and market confidence in the sponsor regime. If in doubt about whether a conflict can be effectively managed a sponsor should discuss the issue with the FSA before it decides if it can provide a sponsor service.
1This chapter contains:2(1) guidance for firms, authorised payment institutions and authorised electronic money institutions8 and their 7appointed representatives, agents7or tied agents5on the circumstances in which the FSA permits them 7to reproduce the FSA logo;2887(2) rules on the use by firms of the Key facts logo.2
The FSA logo is a registered UK service mark, with number 2150560. The Key facts logo is a registered Community trade mark, with the number E3866688. Both are3 the property of the FSA. They are 3also subject to copyright and may be used or reproduced with permission of the FSA only. If the FSA or Key facts logos are 3reproduced or otherwise used by any person without such permission the FSA may seek to enforce its rights over its property through the Courts.333
GEN 5 Annex 1 G is a general licence, which sets out the circumstances in which the FSA permits 5a person to whom this chapter applies 7to reproduce the FSA and Key facts logos3. Such a person7need not apply for an individual licence if it uses or reproduces the logos 3in accordance with the general licence.735753
The FSA has no policy to allow use of the logos3 by a person to whom this chapter applies 7other than as set out in GEN 5 Annex 1 G. If, however, such a person7 wishes to use or reproduce either of3 the logos3 other than in accordance with the general licence, it may apply to the FSA for an individual licence, giving full reasons why it considers the FSA should grant the licence.3575575
6A firm must not use the FSA logo (and must take all reasonable steps to ensure that its representatives do not use the FSA logo) in any communication with a client other than in accordance with the general licence in GEN 5 Annex 1 G or any individual licence granted by the FSA to the firm or its representatives.
Achieving the regulatory objectives involves the FSA informing itself of developments in firms and in markets. The Act requires the FSA to monitor a firm's compliance with requirements imposed by or under the Act (paragraph 6 (1) of Schedule 1). The Act also requires the FSA to take certain steps to cooperate with other relevant bodies and 3regulators (section 354). For these purposes, the FSA needs to have access to a broad range of information about a firm's business.
The FSA receives the information in SUP 2.1.3 G through a variety of means, including notifications by firms (see SUP 15) and regular reporting by firms (see SUP 16). This chapter is concerned with the methods of information gathering that the FSA may use on its own initiative in the discharge of its functions under the Act. This chapter does not deal with the information gathering powers that the FSA has under the Unfair Terms Regulations. These are dealt with in UNFCOG2.12
Part XI of the Act (Information Gathering and Investigations) gives the FSA statutory powers, including: (1) to require the provision of information (see sections 165, 165A, 3EG 32 and FINMAR 13);332(2) to require reports from skilled persons (see section 166 and SUP 5);(3) to appoint investigators (see sections 167, 168 and 169 of the Act and EG 32); and2(4) to apply for a warrant to enter premises (see section 176 of the Act and EG 42).2
The FSA prefers to discharge its functions by working in an open and cooperative relationship with firms. The FSA will look to obtain information in the context of that relationship unless it appears that obtaining information in that way will not achieve the necessary results, in which case it will use its statutory powers. The FSA has exercised its rule-making powers to make Principle 11 which requires that a firm must deal with its regulators in an open and cooperative way,
The purpose of SUP 2.3 is to amplify Principle 11 in the context of information gathering by the FSA on its own initiative in the discharge of its functions under the Act. SUP 2.3 therefore sets out, in guidance on Principle 11 and in rules, how the FSA expects firms to deal with the FSA in that context, including the steps that a firm should take with a view to ensuring that certain connected persons should also cooperate with the FSA.
The purpose of SUP 2.4 is to explain a particular method of information gathering used by the FSA, known as "mystery shopping". Information about how a firm sells financial products can be very difficult to obtain, and the purpose of this method is to obtain such information from individuals who approach a firm in the role of potential retail consumers on the FSA's initiative. The FSA may seek information about particular issues or the activities of individual firms by means
A UK recognised body must give the FSA:(1) a copy of its annual report and accounts; and(2) a copy of the consolidated annual report and accounts: (a) of any group in which the UK recognised body is a subsidiary undertaking; or(b) (if the UK recognised body is not a subsidiary undertaking in any group) of any group of which the UK recognised body is a parent undertaking;no later than the time specified for the purpose of this rule in REC 3.8.2 R.
The time specified for the purpose of REC 3.8.1 R is the latest of:(1) four months after the end of the financial year to which the document which is to be given to the FSA relates; or(2) the time when the documents described in REC 3.8.1 R (1) or REC 3.8.1 R (2)(b) are sent to the members or shareholders of the UK recognised body; or (3) the time when the document described in REC 3.8.1 R (2)(a) are sent to the shareholders in a parent undertaking of the group to which that document
A UK recognised body is not required to provide quarterly and monthly management accounts in respect of the same period, but management accounts (whether quarterly or monthly) should be submitted for all periods. A UK recognised body may choose whichever method is the more suitable for it, but where it intends to change from providing monthly to quarterly management accounts (or from quarterly to monthly management accounts), it should inform the FSA of that fact.