Related provisions for PERG 7.5.2

SUP 13.3.2CG01/04/2013

4An exempt professional firm which is included in the record of unauthorised persons carrying on insurance mediation activity maintained by the FCA20 under article 93 of the Regulated Activities Order may establish a branch in another EEA State under the Insurance Mediation Directive (see PROF 7.2).20

SYSC 4.4.6G01/04/2013

Frequently asked questions about allocation of functions in SYSC 4.4.5 R

Question		Answer
1	Does an individual to whom a function is allocated under SYSC 4.4.5 R need to be an approved person?	An individual to whom a function is allocated under SYSC 4.4.5 R will be performing the apportionment and oversight function (CF 8, see SUP 10A.7.1 R17) and an application must be made under section 59 of the Act for approval of the individual before the function is performed. There are exceptions from this in SUP 10A.117 (Approved persons - Application). 17 17
2	If the allocation is to more than one individual, can they perform the functions, or aspects of the functions, separately?	If the functions are allocated to joint chief executives under SYSC 4.4.5 R, column 2, they are expected to act jointly. If the functions are allocated to an individual under SYSC 4.4.5 R, column 2, in addition to individuals under SYSC 4.4.5 R, column 3, the former may normally be expected to perform a leading role in relation to the functions that reflects his position. Otherwise, yes.
3	What is meant by "appropriately allocate" in this context?	The allocation of functions should be compatible with delivering compliance with Principle 3, SYSC 4.4.3 R and SYSC 4.1.1 R. The appropriate regulator considers that allocation to one or two individuals is likely to be appropriate for most firms.
4	If a committee of management governs a firm or group, can the functions be allocated to every member of that committee?	Yes, as long as the allocation remains appropriate (see Question 3). If the firm also has an individual as chief executive, then the functions must be allocated to that individual as well under SYSC 4.4.5 R, column 2 (see Question 7).
5	Does the definition of chief executive include the possessor of equivalent responsibilities with another title, such as a managing director or managing partner?	Yes.
6	Is it possible for a firm to have more than one individual as its chief executive?	Although unusual, some firms may wish the responsibility of a chief executive to be held jointly by more than one individual. In that case, each of them will be a chief executive and the functions must be allocated to all of them under SYSC 4.4.5 R, column 2 (see also Questions 2 and 7).
7	If a firm has an individual as chief executive, must the functions be allocated to that individual?	Normally, yes, under SYSC 4.4.5 R, column 2. But if the firm is a body corporate and a member of a group, the functions may, instead of being allocated to the firm's chief executive, be allocated to a director or senior manager from the group responsible for the overall management of the group or of a relevant group division, so long as this is appropriate (see Question 3). Such individuals may nevertheless require approval under section 59 (see Question 1). If the firm chooses to allocate the functions to a director or senior manager responsible for the overall management of a relevant group division, the FSA would expect that individual to be of a seniority equivalent to or greater than a chief executive of the firm for the allocation to be appropriate. See also Question 14.
8	If a firm has a chief executive, can the functions be allocated to other individuals in addition to the chief executive?	Yes. SYSC 4.4.5 R, column 3, permits a firm to allocate the functions, additionally, to the firm's (or where applicable the group's) directors and senior managers as long as this is appropriate (see Question 3).
9	What if a firm does not have a chief executive?	Normally, the functions must be allocated to one or more individuals selected from the firm's (or where applicable the group's) directors and senior managers under SYSC 4.4.5 R, column 3. But if the firm: (1) is a body corporate and a member of a group; and (2) the group has a director or senior manager responsible for the overall management of the group or of a relevant group division; then the functions must be allocated to that individual (together, optionally, with individuals from column 3 if appropriate) under SYSC 4.4.5 R, column 2.
10	What do you mean by "group division within which some or all of the firm's regulated activities fall"?	A "division" in this context should be interpreted by reference to geographical operations, product lines or any other method by which the group's business is divided. If the firm's regulated activities fall within more than one division and the firm does not wish to allocate the functions to its chief executive, the allocation must, under SYSC 4.4.5 R, be to: (1) a director or senior manager responsible for the overall management of the group; or (2) a director or senior manager responsible for the overall management of one of those divisions; together, optionally, with individuals from column 3 if appropriate. (See also Questions 7 and 9.)
11	How does the requirement to allocate the functions in SYSC 4.4.5 R apply to an overseas firm which is not an incoming EEA firm, incoming Treaty firm or UCITS qualifier?	The firm must appropriately allocate those functions to one or more individuals, in accordance with SYSC 4.4.5 R, but: (1) The responsibilities that must be apportioned and the systems and controls that must be overseen are those relating to activities carried on from a UK establishment with certain exceptions (see SYSC 1 Annex 1.1.8R). Note that SYSC 1 Annex 1.1.10R does not extend the territorial scope of SYSC 4.4 for an overseas firm. (2) The chief executive of an overseas firm is the person responsible for the conduct of the firm's business within the United Kingdom (see the definition of "chief executive"). This might, for example, be the manager of the firm's UK establishment, or it might be the chief executive of the firm as a whole, if he has that responsibility. The apportionment and oversight function applies to such a firm, unless it falls within a particular exception from the approved persons regime (see Question 1).
12	How does the requirement to allocate the functions in SYSC 4.4.5 R apply to an incoming EEA firm or incoming Treaty firm?	SYSC 1 Annex 1.1.1R(2) and SYSC 1 Annex 1.1.8R restrict the application of SYSC 4.4.5 R for such a firm. Accordingly: (1) Such a firm is not required to allocate the function of dealing with apportionment in SYSC 4.4.5R (1). (2) Such a firm is required to allocate the function of oversight in SYSC 4.4.5R (2). However, the systems and controls that must be overseen are those relating to matters which the appropriate regulator, as Host State regulator, is entitled to regulate (there is guidance on this in SUP 13A Annex 2). Those are primarily, but not exclusively, the systems and controls relating to the conduct of the firm's activities carried on from its UK branch. (3) Such a firm need not allocate the function of oversight to its chief executive; it must allocate it to one or more directors and senior managers of the firm or the firm's group under SYSC 4.4.5 R, row (2). (4) An incoming EEA firm which has provision only for cross border services is not required to allocate either function if it does not carry on regulated activities in the United Kingdom; for example if they fall within the overseas persons exclusions in article 72 of the Regulated Activities Order. See also Questions 1 and 15.
13	What about a firm that is a partnership or a limited liability partnership?	The appropriate regulator envisages that most if not all partners or members will be either directors or senior managers, but this will depend on the constitution of the partnership (particularly in the case of a limited partnership) or limited liability partnership. A partnership or limited liability partnership may also have a chief executive (see Question 5). A limited liability partnership is a body corporate and, if a member of a group, will fall within SYSC 4.4.5 R, row (1) or (2).
14	What if generally accepted principles of good corporate governance recommend that the chief executive should not be involved in an aspect of corporate governance?	The Note to SYSC 4.4.5 R provides that the chief executive or other executive director or senior manager need not be involved in such circumstances. For example, the UK Corporate Governance Code 5 recommends that the board of a listed company should establish an audit committee of non-executive directors to be responsible for oversight of the audit. That aspect of the oversight function may therefore be allocated to the members of such a committee without involving the chief executive. Such individuals may require approval under section 59 in relation to that function (see Question 1). 5
15	What about incoming electronic commerce activities carried on from an establishment in another EEA State with or for a person in the United Kingdom?	SYSC does not apply to an incoming ECA provider acting as such.

SUP 12.5.2G01/04/2013

(1) Regulations 3(1) 8and (2) of the Appointed Representatives Regulations make it a requirement that the contract between the firm and the appointed representative (unless it prohibits the appointed representative from representing other counterparties) contains a provision enabling the firm to:488(a) impose such a prohibition; or(b) impose restrictions as to the other counterparties which the appointed representative may represent, or as to the types of investment in relation

FEES 4.2.11R01/04/2013

Table of periodic fees payable to the FCA 65

65

1 Fee payer	2 Fee payable	3 Due date	4 Events occurring during the period leading to modified periodic fee
Any firm (except an ICVC or a UCITS qualifier)	As specified in FEES 4.3.1 R in relation to FEES 4 Annex 2AR and FEES 4 Annex 11 R65	(1) Unless (2) or (3) apply7, on or before the relevant dates specified in FEES 4.3.6 R.12 (2) Unless (3) applies, if 7an event specified in column 4 occurs during the course of a fee year,64 30 days after the occurrence of that event, or if later the dates specified in FEES 4.3.6 R.7 (3) Where the permission is for operating a multilateral trading facility, the date specified in FEES 4 Annex 10 (Periodic fees for MTF operators). 7 7 64	Firm receives permission, or becomes authorised or registered under the Payment Services Regulations or the Electronic Money Regulations 12;9 or firm 9extends permission or its payment service activities9 16 9
Persons who hold a certificate issued by the FCA 64 under article 54 of the Regulated Activities Order (Advice given in newspapers etc.) 64	£1,000	(1) Unless (2) applies, on or before 30 April (2) If an event in column 4 occurs during the course of a fee year,64 30 days after the occurrence of that event 64	Certificate issued to person by FCA 64 under Article 54 RAO 64
Any manager of an authorised unit trust;	In relation to each unit trust the amount specified in FEES 4 Annex 4		Authorisation order is made in relation to the relevant scheme
Any ACD of an ICVC; and	In relation to each ICVC the amount specified in FEES 4 Annex 4
Persons who, under the constitution or founding arrangements of a recognised scheme, is responsible for the management of the property held for or within the scheme;	In relation to each recognised scheme the amount specified in FEES 4 Annex 4		The relevant scheme becomes a recognised collective investment scheme
		Not applicable
UK recognised body	FEES 4 Annex 6, part 1 for a UK RIE ; and FEES 4 Annex 6 R, part 1A for a UK RIE that is also an RAP 13 65	(1) Unless (2) applies, by the due dates set out in FEES 4 Annex 6, part 1and (in the case of an RAP) part 1A13 (2) If the event in column 4 occurs during the course of a fee year 64, 30 days after the occurrence of that event 64	Recognition order is made. The modified11 66 periodic fee is specified in FEES 4 Annex 6 R, Part 1and (in the case of an RAP) Part 1A.13 11 66 11 66 11 66 11 66 11 66
ROIE 65 65	FEES 4 Annex 6, part 2	(1), unless (2) applies, 1 July. (2) If the event in column 4 occurs during the course of a fee year 64, 30 days after the occurrence of that event. 64	Recognition order is made. The modified11 66 periodic fee is specified in FEES 4 Annex 6, Part 2.11 66 11 66 11 66 11 66 11 66
Listed issuers (in LR) of shares, depositary receipts and securitised derivatives (in LR), unless the conditions set out below apply.3 The first condition is that the listed issuer, or a related entity, has already paid a periodic fee in respect of the period concerned. The second condition is that the listed issuer is subject to listing rules as a result of a reverse takeover, or that the listed issuer is a newly formed entity, created as a result of a restructuring.3	FEES 4 Annex 7	Within 30 days of the date of the invoice	Listed issuer 3 (in LR) becomes subject to listing rules 3
Sponsors	£20,00012 10 per year for the period from 1 April to 31 March the following year (see Note)2 10 12	Within 30 days of the date of the invoice	(1)14Approval of sponsor, unless (2) applies.14 (2) In the case of approval of a sponsor following a change of legal status in accordance with FEES 3 Annex 1 R Part 7, the balance of the fee otherwise due from the original sponsor. Where a payment is made in accordance with (2) the original sponsor's obligation to pay that fee ceases.14
All non-listed issuers (in DTR) of shares, depositary receipts and securitised derivatives.6 6	FEES 4 Annex 8	Within 30 days of the date of the invoice	Non-listed issuer (in DTR) becomes subject to disclosure rules and transparency rules 6
6All firms reporting transactions in securities derivatives 10to the FCA 64 in accordance with SUP 17, and market operators who provide facilities for trading in securities derivatives.10 64 10	FEES 4 Annex 9 R	Within 30 days of the date of the invoice	Not applicable
15Any issuer of a regulated covered bond.	FEES 4 Annex 11R	(1) Unless (2) applies, on or before the relevant dates specified in FEES 4.3.6 R (2) If an event specified in column 4 occurs during the course of a fee year 64, 30 days after the occurrence of that event or, if later, the dates specified in FEES 4.3.6 R 64	A person becomes registered as an issuer of a regulated covered bond

Note:Sponsors on the list of approved sponsors as at 1 April each year will be liable for the full year's annual fee unless FEES 4.3.13 R applies.2

SUP 3.1.2R01/04/2013

Applicable sections (see SUP 3.1.1 R)

This table and the provisions in SUP 3 should be read in conjunction with GEN 2.2.23 R to GEN 2.2.25 G. In particular, the PRA does not apply any of the provisions in SUP 3 in respect of FCA-authorised persons. SUP 3.10 and SUP 3.11 are applied by the FCA only.41

(1) Category of firm		(2) Sections applicable to the firm	(3) Sections applicable to its auditor
(1)	Authorised professional firm which is required by IPRU(INV) 2.1.2R to comply with chapters 3, 519 or 13 of IPRU(INV) and which has an auditor appointed under or as a result of a statutory provision other than in the Act 9 (Notes 1 and 6)23 23 19 23 23	SUP 3.1 - SUP 3.7, SUP 3.1123	SUP 3.1, SUP 3.2, SUP 3.8,19SUP 3.10 19
(2)	Authorised professional firm not within (1) to which the custody chapter or client money chapter applies22 17 22 23	SUP 3.1 - SUP 3.7, SUP 3.11	SUP 3.1, SUP 3.2, SUP 3.8, SUP 3.10
(3)	Authorised professional firm not within (1) or (2) which has an auditor appointed under or as a result of a statutory provision other than in the Act	SUP 3.1, SUP 3.2, SUP 3.7	SUP 3.1, SUP 3.2, SUP 3.8
(4)	Bank, building society or dormant account fund operator 21which in each case carries on designated investment business 21(Notes 2A and 6)23 23	SUP 3.1-SUP 3.7, SUP 3.1123	SUP 3.1, SUP 3.2, SUP 3.8, SUP 3.10
(5)	Bank, building society or a dormant account fund operator which in each case does not carry on designated investment business 21 (Note 2A) 21	SUP 3.1 - SUP 3.7	SUP 3.1, SUP 3.2, SUP 3.8
(5A)	Credit union	SUP 3.1 - SUP 3.7	SUP 3.1, SUP 3.2, SUP 3.824
(6)	Insurer, the Society of Lloyd's, underwriting agent or members' adviser, UK ISPV 11 (Note 5)7	SUP 3.1 - SUP 3.7	SUP 3.1, SUP 3.2, SUP 3.8
(7)	Investment management firm, (other than an exempt CAD firm),16 personal investment firm (other than a small personal investment firm or exempt CAD firm) 15or securities and futures firm (other than an exempt CAD firm or an exempt BIPRU commodities firm 20)15 which, in each case, has an auditor appointed under or as a result of a statutory provision other than in the Act 9(Notes 3 and 623)17 23 9 17 23	SUP 3.1 - SUP 3.7, SUP 3.1123	SUP 3.1, SUP 3.2, SUP 3.8,19SUP 3.10 19
9(7A)	Investment management firm (other than an exempt CAD firm)20, personal investment firm (other than a small personal investment firm or exempt CAD firm 15) or securities and futures firm (other than an exempt CAD firm 15 or an exempt BIPRU commodities firm 20) not within (7) to which the custody chapter or client money chapter applies22 23 17 22	SUP 3.1 - SUP 3.7, SUP 3.1123	SUP 3.1, SUP 3.2, SUP 3.8, SUP 3.1025
25(7AA)	A firm that has exercised an opt in to CASS in accordance with CASS 1.4.9 R	SUP 3.1 to SUP 3.7, SUP 3.11	SUP 3.1, SUP 3.2, SUP 3.8, SUP 3.10.
9(7B)	UCITS firm 13 (Note 6)23 13	SUP 3.1 - SUP 3.7, SUP 3.1123	SUP 3.1, SUP 3.2, SUP 3.8,19SUP 3.10 19
13(7C)	UK MiFID investment firm, which has an auditor appointed under or as a result of a statutory provision other than in the Act (Notes 3B and 6)23 20 20 23	SUP 3.1 - 3.7, SUP 3.1123	SUP 3.1, SUP 3.2, SUP 3.8, SUP 3.1014
17(7D)	Sole trader or partnership that is a UK 20 MiFID investment firm (other than an exempt CAD firm) (Notes 3C and 6)23 20 20 23	SUP 3.1 - SUP 3.7, SUP 3.1123	SUP 3.1, SUP 3.2, SUP 3.8, SUP 3.10
(8)	Small personal investment firm or service company which, in either case, has an auditor appointed under or as a result of a statutory provision other than in the Act	SUP 3.1, SUP 3.2, SUP 3.7	SUP 3.1, SUP 3.2, SUP 3.8
(9)8	Home finance provider 10 which has an auditor appointed under or as a result of a statutory provision other than in the Act 9 10	SUP 3.1 - SUP 3.78	SUP 3.1, SUP 3.2, SUP 3.88
(10)8	Insurance intermediary (other than an exempt insurance intermediary) to which the insurance client money chapter 17 (except for CASS 5.2 (Holding money as agent)) applies (see Note 4)8 17	SUP 3.1 - SUP 3.78, SUP 3.1123	SUP 3.1, SUP 3.2, SUP 3.8, SUP 3.108
(11)8	Exempt insurance intermediary and insurance intermediary not subject to SUP 3.1.2 R(10) which has an auditor appointed under or as a result of a statutory provision other than in the Act	SUP 3.1, SUP 3.2, SUP 3.78	SUP 3.1, SUP 3.2, SUP 3.88
(12)8	Home finance intermediary 10 or home finance administrator 10 which has an auditor appointed under or as a result of a statutory provision other than in the Act. 10 10	SUP 3.1, SUP 3.2, SUP 3.78	SUP 3.1, SUP 3.2, SUP 3.88
Note 1 = This chapter applies to an authorised professional firm in row (1) (and its auditor) as if the firm were of the relevant type in the right-hand column of IPRU(INV) 2.1.4R.
Note 2 [deleted]23 17 17 23
Note 2A = For this purpose, designated investment business does not include either or both: (a) dealing which falls within the exclusion in article 15 of the Regulated Activities Order (Absence of holding out etc) (or agreeing to do so); and (b) dealing in investments as principal (or agreeing to do so): (i) by a firm whose permission to deal in investments as principal is subject to a limitation to the effect that the firm, in carrying on this regulated activity, is limited to entering into transactions in a manner which, if the firm was an unauthorised person, would come within article 16 of the Regulated Activities Order (Dealing in contractually based investments); and (ii) in a manner which comes within that limitation; having regard to article 4(4) of the Regulated Activities Order (Specified activities: general23). 18
Note 3 = This note applies in relation to an oil market participant to which IPRU(INV) 3 does not apply and in relation to an energy market participant to which IPRU(INV) 3 does not apply. In SUP 3: (a) only SUP 3.1, SUP 3.2 and SUP 3.7 are applicable to such a firm; and (b) only SUP 3.1, SUP 3.2 and SUP 3.8 are applicable to its auditor; and, in each case, only if it has an auditor appointed under or as a result of a statutory provision other than in the Act.
17Note 3A [deleted]23 23
20Note 3B = UK MiFID investment firms include exempt CAD firms. An exempt CAD firm that has opted into MiFID can benefit from the audit exemption for small companies in the Companies Act legislation if it meets the relevant criteria in that legislation and fulfils the conditions of regulation 4C(3) of the Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2007. If a firm does so benefit then SUP 3 will not apply to it. For further details about exempt CAD firms, see PERG 13, Q58.
17Note 3C20 = A sole trader or a partnership that is a UK MiFID investment firm 20 to which the custody chapter 22 or client money chapter applies22 20 must have its annual accounts audited. 20 20 22 22
Note 4 = The client money audit requirement in SUP 3.1.2 R(10) therefore applies to all insurance intermediaries except:8 • those which do not hold client money or other client assets in relation to insurance mediation activities; or 8 • those which only hold up to, but not exceeding, £30,000 of client money under a statutory trust arising under CASS 5.3.8 Insurance intermediaries which, in relation to insurance mediation activities, hold no more than that amount of client money only on a statutory trust are exempt insurance intermediaries.8
Note (5) = In row (6):7
(a)7	SUP 3.1 - SUP 3.7 applies to a managing agent in respect of its own business and in respect of the insurance business of each syndicate which it manages; and7
(b)7	SUP 3.1, SUP 3.2 and SUP 3.8 apply to the auditors of a managing agent and the auditors of the insurance business of each syndicate which the managing agent manages.1 2 3 4 5 6 7
23Note 6 = Where SUP 3.11 applies to a firm, and SUP 3.10 applies to the auditor of that firm, those sections apply whether or not that firm's permission prevents it from holding client money or custody assets and whether or not it holds client money or custody assets.

TC App 1.1.1R31/12/2012

1Activity	Products/Sectors		Is there an appropriate qualification4requirement? 4
Designated investment business carried on for a retail client
Providing basic advice	1.	Stakeholder products excluding a deposit-based stakeholder product	No
Advising	2.	Securities which are not stakeholder pension schemes, personal pension schemes 7 or broker funds	Yes
	3.	Derivatives	Yes2
	4.	Packaged products 6 Retail investment products 6 which are not broker funds	Yes2
	5.	Friendly Society life policies where the employee is not reasonably expected to receive a remuneration of greater than £1000 a year in respect of such sales	No2
	6.	Friendly Society tax-exempt policies (other than Holloway sickness policies where the Holloway policy special application conditions are met)5	Yes2
	7.	Long-term care insurance contracts	Yes2
	8.	Investments in the course of corporate finance business	Yes2
	9.	Advising on syndicate participation at Lloyd's	Yes2
Undertaking the activity in column 2	10.	Broker fund adviser	Yes
Undertaking the activity in column 2	11.	Pension transfer specialist	Yes2
Advising and dealing	12.	Securities which are not stakeholder pension schemes, personal pension schemes 7 or broker funds	Yes
Advising and dealing	13.	Derivatives	Yes2
4Dealing	13A.8	Securities which are not stakeholder pension schemes, personal pension schemes 7 or broker funds	No
4Dealing	413B.8	Derivatives	No
8 MiFID business bidding	13C.	Emissions auction products that are financial instruments	No
Managing	14.	Investments	Yes
Overseeing on a day-to-day basis	15.	Operating a collective investment scheme or undertaking the activities of a trustee or depositary of a collective investment scheme	Yes
	16.	Safeguarding and administering investments or holding client money	Yes2
	17.	Administrative functions in relation to managing investments	Yes2
	18.	Administrative functions in relation to effecting or carrying out contracts of insurance which are life policies	Yes2
	19.	Administrative functions in relation to the operation of stakeholder pension schemes	Yes2
Regulated mortgage activity and reversion activity carried on for a customer
Advising	20.	Regulated mortgage contracts for a non-business purpose	Yes
Advising	21.	Equity release transactions	Yes2
Designing scripted questions for non-advised sales	22.	Equity release transactions	Yes
Overseeing non-advised sales on a day-to-day basis	23.	Equity release transactions	Yes
Non-investment insurance business carried on for a consumer
Advising	24.	Non-investment insurance contracts	No
3 Regulated sale and rent back activity carried on for a customer
Advising	25.	Regulated sale and rent back agreements	No
Overseeing non-advised saleson a day-to-day basis	26.	Regulated sale and rent back agreements	No
Notes:
1.	In the Appendix the heading and types of business specified in the headings are to be read in conjunction with the paragraphs appearing beneath them.
2.	Thus, for example, paragraph 24consistent with the heading above it3, refers only to advice on non-investment insurance contracts given to a consumer. 3

CASS 8.1.2AR01/01/2013

3The mandate rules do not apply to a firm:(1) in relation to client money that the firm is holding in accordance with CASS 5 or CASS 7 (including client money that the firm has allowed another person to hold or control in accordance with CASS 7.5.2 R); or(2) in relation to safe custody assets that the firm is holding, or in respect of which the firm is carrying on safeguarding and administration of assets (without arranging) in accordance with CASS 6; or(3) in relation to a client's

SYSC 2.1.6G01/04/2013

Frequently asked questions about allocation of functions in SYSC 2.1.3 R

This table belongs to SYSC 2.1.5 G

	Question	Answer
1	Does an individual to whom a function is allocated under SYSC 2.1.3 R need to be an approved person?	An individual to whom a function is allocated under SYSC 2.1.3 R will be performing the apportionment and oversight function (CF 8, see SUP 10A.7.1 R15) and an application must be made under section 59 of the Act for approval of the individual before the function is performed. There are exceptions from this inSUP 10A.115 (Approved persons - Application). 15 15 5
2	If the allocation is to more than one individual, can they perform the functions, or aspects of the functions, separately?	If the functions are allocated to joint chief executives under SYSC 2.1.4 R, column 2, they are expected to act jointly. If the functions are allocated to an individual under SYSC 2.1.4 R, column 2, in addition to individuals under SYSC 2.1.4 R, column 3, the former may normally be expected to perform a leading role in relation to the functions that reflects his position. Otherwise, yes.
3	What is meant by "appropriately allocate" in this context?	The allocation of functions should be compatible with delivering compliance with Principle 3, SYSC 2.1.1 R and SYSC 3.1.1 R. The appropriate regulator considers that allocation to one or two individuals is likely to be appropriate for most firms.
4	If a committee of management governs a firm or group, can the functions be allocated to every member of that committee?	Yes, as long as the allocation remains appropriate (see Question 3).If the firm also has an individual as chief executive, then the functions must be allocated to that individual as well under SYSC 2.1.4 R, column 2 (see Question 7).
5	Does the definition of chief executive include the possessor of equivalent responsibilities with another title, such as a managing director or managing partner?	Yes.
6	Is it possible for a firm to have more than one individual as its chief executive?	Although unusual, some firm may wish the responsibility of a chief executive to be held jointly by more than one individual. In that case, each of them will be a chief executive and the functions must be allocated to all of them under SYSC 2.1.4 R, column 2 (see also Questions 2 and 7).
7	If a firm has an individual as chief executive, must the functions be allocated to that individual?	Normally, yes, under SYSC 2.1.4 R, column 2. But if the firm is a body corporate and a member of a group, the functions may, instead of to the firm's chief executive, be allocated to a director or senior manager from the group responsible for the overall management of the group or of a relevant group division, so long as this is appropriate (see Question 3). Such individuals may nevertheless require approval under section 59 (see Question 1). If the firm chooses to allocate the functions to a director or senior manager responsible for the overall management of a relevant group division, the appropriate regulator would expect that individual to be of a seniority equivalent to or greater than a chief executive of the firm for the allocation to be appropriate. See also Question 14.
8	If a firm has a chief executive, can the functions be allocated to other individuals in addition to the chief executive?	Yes. SYSC 2.1.4 R, column 3, permits a firm to allocate the functions, additionally, to the firm's (or where applicable the group's) directors and senior managers as long as this is appropriate (see Question 3).
9	What if a firm does not have a chief executive?	Normally, the functions must be allocated to one or more individuals selected from the firm's (or where applicable the group's) directors and senior managers under SYSC 2.1.4 R, column 3. But if the firm: (1) is a body corporate and a member of a group; and (2) the group has a director or senior manager responsible for the overall management of the group or of a relevant group division; then the functions must be allocated to that individual (together, optionally, with individuals from column 3 if appropriate) under SYSC 2.1.4 R, column 2.2
10	What do you mean by "group division within which some or all of the firm's regulated activities fall"?	A "division" in this context should be interpreted by reference to geographical operations, product lines or any other method by which the group's business is divided. If the firm's regulated activities fall within more than one division and the firm does not wish to allocate the functions to its chief executive, the allocation must, under SYSC 2.1.4 R, be to: (1) a director or senior manager responsible for the overall management of the group; or (2) a director or senior manager responsible for the overall management of one of those divisions; together, optionally, with individuals from column 3 if appropriate. (See also Questions 7 and 9.)
11	How does the requirement to allocate the functions in SYSC 2.1.3R apply to an overseas firm which is not an incoming EEA firm, incoming Treaty firm or UCITS qualifier?	The firm must appropriately allocate those functions to one or more individuals, in accordance with SYSC 2.1.4 R, but: (1) The responsibilities that must be apportioned and the systems and controls that must be overseen are those relating to activities carried on from a UK establishment with certain exceptions (see SYSC 1 Annex 1.1.7 R)6. Note that SYSC 1 Annex 1.1.10 R6 does not extend the territorial scope of SYSC 2 for an overseas firm. (2) The chief executive of an overseas firm is the person responsible for the conduct of the firm's business within the United Kingdom (see the definition of "chief executive"). This might, for example, be the manager of the firm's UK establishment, or it might be the chief executive of the firm as a whole, if he has that responsibility. The apportionment and oversight function applies to such a firm, unless it falls within a particular exception from the approved persons regime (see Question 1). 6 6
12	How does the requirement to allocate the functions in SYSC 2.1.3R apply to an incoming EEA firm or incoming Treaty firm?	SYSC 1 Annex 1.1.1R6and SYSC 1 Annex 1.1.8 R6restrict the application of SYSC 2.1.3 R for such a firm. Accordingly: (1) Such a firm is not required to allocate the function of dealing with apportionment in SYSC 2.1.3 R (1). (2) Such a firm is required to allocate the function of oversight in SYSC 2.1.3 R (2). However, the systems and controls that must be overseen are those relating to matters which the appropriate regulator, as Host State regulator, is entitled to regulate (there is guidance on this in SUP 13A Annex 2 G3). Those are primarily, but not exclusively, the systems and controls relating to the conduct of the firm's activities carried on from its UK branch. (3) Such a firm need not allocate the function of oversight to its chief executive; it must allocate it to one or more directors and senior managers of the firm or the firm's group under SYSC 2.1.4 R, row (2). (4) An incoming EEA firm which has provision only for cross border services is not required to allocate either function if it does not carry on regulated activities in the United Kingdom; for example if they fall within the overseas persons exclusions in article 72 of the Regulated Activities Order. See also Questions 1 and 15.1 6 6 3
13	What about a firm that is a partnership or a limited liability partnership?	The appropriate regulator envisages that most if not all partners or members will be either directors or senior managers, but this will depend on the constitution of the partnership (particularly in the case of a limited partnership) or limited liability partnership. A partnership or limited liability partnership may also have a chief executive (see Question 5). A limited liability partnership is a body corporate and, if a member of a group, will fall within SYSC 2.1.4 R, row (1) or (2).
14	What if generally accepted principles of good corporate governance recommend that the chief executive should not be involved in an aspect of corporate governance?	The Note to SYSC 2.1.4 R provides that the chief executive or other executive director or senior manager need not be involved in such circumstances. For example, the UK Corporate Governance Code 7 recommends that the board of a listed company should establish an audit committee of non-executive directors to be responsible for oversight of the audit. That aspect of the oversight function may therefore be allocated to the members of such a committee without involving the chief executive. Such individuals may require approval under section 59 in relation to that function (see Question 1). 7
15	What about electronic commerce activities carried on from an establishment in another EEA State with or for a person in the United Kingdom?4 4	SYSC does not apply to an incoming ECA provider acting as such.1 4

SUP 13.4.2BG01/04/2013

4An exempt professional firm which is included in the record of unauthorised persons carrying on insurance mediation activity maintained by the FCA20 under article 93 of the Regulated Activities Order may provide cross border services in another EEA State under the Insurance Mediation Directive (see PROF 7.2).20

PERG 8.13.4G01/07/2005

Intermediaries involved with arranging and advising on deposits may be unauthorised persons as such activities do not amount to regulated activities (other than where they involve giving basic advice on a stakeholder product (article 52A of the Regulated Activities Order (Giving basic advice on a stakeholder product))) and so do not require authorisation under section 19 of the Act. However, the combination of the exemptions in Part V together with certain of the exemptions in

PERG 5.12.9G01/07/2005

Article 72 of the Regulated Activities Order (Overseas persons) provides a potential exclusion for persons with no permanent place of business in the United Kingdom from which regulated activities are conducted or offers to conduct regulated activities are made. Where these persons carry on insurance mediation activities in the United Kingdom, they may be able to take advantage of the exclusions in article 72 of the Regulated Activities Order. In general terms, these apply where

FEES 6.7.6R01/04/2013

If a firm ceases to be a participant firm or carry out activities within one or more classes54 part way through a financial year4 of the compensation scheme:4(1) it will remain liable for any unpaid levies which the FSCS has already made on the firm; and41(2) the FSCS may make one or more levies4 upon it (which may be before or after the firm5 has ceased to be a participant firm or carry out activities within one or more classes5,4 but must be before it ceases to be an authorised

REC 3.15.5G21/06/2001

Specified investments (other than securities or options in relation to securities) falling within the same article in Part III of the Regulated Activities Order will normally be regarded as being assets of the same type. Securities falling within the same article in Part III of the Regulated Activities Order which may be given the same generic description (for example, shares admitted to the UK official list) will normally be regarded as being of the same type. Options in relation

GENPRU 3.2.9R01/04/2013

If the Part 4A permission of a firm contains a requirement obliging it to comply with this rule with respect to a third-country banking and investment group of which it is a member, it must comply, with respect to that third-country banking and investment group, with the rules in Part 2 of GENPRU 3 Annex 2, as adjusted by Part 3 of that annex.

Related provisions for PERG 7.5.2

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Frequently asked questions about allocation of functions in SYSC 2.1.3 R