Related provisions for PERG 5.8.15
Module |
Relevance to Credit Unions |
The Principles for Businesses (PRIN) |
The Principles for Businesses (PRIN) set out, in a small number of high-level requirements, the basic obligations of all regulated firms. They provide a general statement of regulatory requirements, and the FSA considers that the Principles are appropriate expressions of the standards of conduct to be expected of all financial firms including credit unions. In applying the Principles to credit unions, the FSA will be mindful of proportionality. In practice, the implications are likely to vary according to the size of the credit union. |
Senior Management Arrangements, Systems and Controls (SYSC) |
SYSC 1 and SYSC 4 to 10 apply to all credit unions in respect of the carrying on of their regulated activities and unregulated activities in a prudential context. SYSC 18 applies to all credit unions without restriction. |
Threshold Conditions (COND) |
In order to become authorised under the Act all firms must meet the threshold conditions. The threshold conditions must be met on a continuing basis by credit unions. Failure to meet one of the conditions is sufficient grounds for the exercise by the FSA of its powers (see EG). |
Statements of Principle and Code of Practice for Approved Persons (APER) |
The purpose of the Statements of Principle contained in APER 2 is to provide guidance to approved persons in relation to the conduct expected of them in the performance of a controlled function. The Code of Practice for Approved Persons sets out descriptions of conduct which, in the opinion of the FSA, do not comply with a Statement of Principle and, in the case of Statement of Principle 3, conduct which tends to show compliance within that statement. |
The Fit and Proper test for Approved Persons (FIT) |
The purpose of FIT is to set out and describe the criteria that the FSA will consider when assessing the fitness and propriety of a person in respect of whom an application is being made for approval to undertake a controlled function under the approved persons regime. The criteria are also relevant in assessing the continuing fitness and propriety of persons who have already been approved. |
General Provisions (GEN) |
GEN contains rules and guidance on general matters, including interpreting the Handbook, statutory status disclosure, the FSA logo and insurance against financial penalties. |
Fees manual (FEES) |
This manual sets out the fees applying to credit unions. |
Conduct of Business sourcebook (COBS) |
A credit union which acts as a CTF provider or provides a cash-deposit ISA will need to be aware of the relevant requirements in COBS. COBS 4.6 (Past, simulated past and future performance), COBS 4.7.1 R (Direct offer financial promotions), COBS 4.10 (Systems and controls and approving and communicating financial promotions), COBS 13 (Preparing product information) and COBS 14 (Providing product information to clients) apply with respect to accepting deposits as set out in those provisions, COBS 4.1 and BCOBS. |
Banking: Conduct of Business sourcebook (BCOBS) |
BCOBS sets out rules and guidance for credit unions on how they should conduct their business with their customers. In particular there are rules and guidance relating to communications with banking customers and financial promotions (BCOBS 2), distance communications (BCOBS 3), information to be communicated to banking customers (BCOBS 4), post sale requirements (BCOBS 5), and cancellation (BCOBS 6). BCOBS 5.1.13 R (Value dating) does not apply to credit unions. The rules in BCOBS 3.1 that relate to distance contracts for accepting deposits are likely to have limited application to a credit union. This is because the Distance Marketing Directive only applies where there is "an organised distance sales or service-provision scheme run by the supplier" (Article 2(a)). If, therefore, the credit union normally operates face to face and has not set up facilities to enable customers to deal with it at a distance, such as facilities for a customer to deal with it purely by post, telephone, fax or the Internet, the provisions will not be relevant. |
Supervision manual (SUP) |
The following provisions of SUP are relevant to credit unions: SUP 1 (The FSA approach to supervision), SUP 2 (Information gathering by the FSA on its own initiative), SUP 3.1 to SUP 3.8 (Auditors), SUP 5 (Skilled persons), SUP 6 (Applications to vary or cancel Part IVpermission), SUP 7 (Individual requirements), SUP 8 (Waiver and modification of rules), SUP 9 (Individual guidance), SUP 10 (Approved persons), SUP 11 (Controllers and Close links), SUP 15 (Notifications to the FSA) and SUP 16 (Reporting Requirements). Credit unions are reminded that they are subject to the requirements of the Act and SUP 11 on controllers and close links, and are bound to notify the FSA of changes. It may be unlikely, in practice, that credit unions will develop such relationships. It is possible, however, that a person may acquire control of a credit union within the meaning of the Act by reason of holding the prescribed proportion of deferred shares in the credit union. In relation to SUP 16, credit unions are exempted from the requirement to submit annual reports of controllers and close links. |
Decision, Procedure and Penalties manual (DEPP) |
DEPP is relevant to credit unions because it sets out: (1) the FSA's decision-making procedure for giving statutory notices. These are warning notices, decision notices and supervisory notices (DEPP 1.2 to DEPP 5); and (2) the FSA's policy with respect to the imposition and amount of penalties under the Act (see DEPP 6). |
Dispute Resolution: Complaints (DISP) |
DISP sets out rules and guidance in relation to treating complainants fairly and the Financial Ombudsman Service. |
Compensation (COMP) |
COMP sets out rules relating to the scheme for compensating consumers when authorised firms are unable, or likely to be unable, to satisfy claims against them. |
Complaints against the FSA (COAF) |
This relates to complaints against the FSA. |
The Enforcement Guide (EG) |
The Enforcement Guide (EG) describes the FSA's approach to exercising the main enforcement powers given to it by the Act and by regulation 12 of the Unfair Terms Regulations. |
Financial crime: a guide for firms (FC) |
FC provides guidance on steps that a firm can take to reduce the risk that it might be used to further financial crime. |
1Typical recommendations and whether they will be regulated as advising on investments under article 53 of the Regulated Activities Order. This table belongs to PERG 8.29.1 G to PERG 8.29.6 G.
Recommendation |
Regulated under article 53 or not? |
I recommend that you take out the ABC investment. |
Yes. This is advice which steers the client in the direction of a particular investment which the client could buy. |
I recommend that you do not take out the ABC investment. |
Yes. This is advice which steers the client away from a particular investment which the client could have bought. |
I recommend that you take out either the ABC investment or the DEF investment. |
Yes. This is advice which steers the client in the direction of more than one particular investment which the client could buy. |
I recommend that you sell your ABC investment. |
Yes. This is advice which steers the client in the direction of a particular investment which the client could sell. |
I recommend that you do not sell your ABC investment. |
Yes. This is advice which steers the client away from a particular investment which the client could have sold. |
I recommend that you transfer ownership of your ABC investment to your spouse. |
Advising the client to gift an investment to another person will not be advice because it does not involve advice on buying, selling, subscribing for or underwriting an investment. |
I recommend that you increase the regular payments you are making to your GHI fund*. |
Yes. This is advice which steers the client in the direction of acquiring further units in a particular fund. |
I recommend that you decrease the regular payments you are making to your GHI fund*. |
Yes. This is advice which steers the client in the direction of acquiring further units in a particular fund but advises against the client buying as many as he intended. |
I recommend that you keep making the same regular payments to your GHI fund*. |
Yes. This is advice which steers the client in the direction of acquiring further units in a particular fund. |
I recommend that you stop making the regular payments you are making to the GHI fund*. |
Yes. This is advice which steers the client away from buying units in a particular fund which the client could have bought. |
I recommend that you pay a lump sum into your GHI fund*. |
Yes. This is advice which steers the client in the direction of acquiring further units in a particular fund. |
I recommend that you do not pay a lump sum into your GHI fund*. |
Yes. This is advice which steers the client away from buying units in a particular fund which the client could have bought. |
I recommend that you move part of your investment in the JKL investment from fund X into fund Y*. |
Yes. This is advice which steers the client in the direction of selling units in a particular fund and buying units in another specific fund. Where the two funds are sub-funds of the same main fund it is still advice. The terms ‘bought’ and ‘sold’ are given a wide meaning and include any acquisition or disposal for valuable consideration. |
I recommend that you move all of your investment in JKL investment from fund X into fund Y*. |
Yes, for the same reason. |
I recommend that you move your MNO investment from platform X and re-register it on platform Y. |
This is unlikely to be advice because normally it will not involve buying and selling the investment held on the platform. |
A client decides of his own accord to increase, decrease or temporarily suspend his regular payments or the payments are increased automatically into an investment without advice being given. |
No. No advice is being given. |
The firm is providing discretionary management services under a mandate and makes changes to a client'sinvestment without providing advice. |
No. No advice is being given. |
Dividends are re-invested into an investment without advice being given. |
No. No advice is being given. |
* The same answer would apply where the fund is a life policy as rights under a contract of insurance are regulated investments under the Act. The position under a personal pension scheme is similar, as explained in more detail in PERG 12.3. |