Related provisions for SUP 18.2.59D

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SYSC 12.1.4RRP
(1) This rule applies in respect of the following rules:(a) SYSC 12.1.8R (2);(b) SYSC 12.1.10R (1), so far as it relates to SYSC 12.1.8R (2);(c) SYSC 12.1.10R (2); and(d) SYSC 12.1.11 R to SYSC 12.1.15 R.(2) The rules referred to in (1):(a) only apply with respect to a financial conglomerate if it is a UK-regulated EEA financial conglomerate;1919(b) (so far as they apply with respect to a group that is not a financial conglomerate) do not apply with respect to a group for
SUP App 2.15.14GRP
Either regulator7 may request additional information and explanations from the firm. (See section 165 (Regulators'7 power to require information) of the Act.)77
SUP 10A.1.8GRP
SUP 10A.1.7 R reflects the provisions of section 59(8) of the Act and, in relation to an incoming Treaty firm and a UCITS qualifier, the Treaty and the UCITS Directive. It preserves the principle of Home State prudential regulation. In relation to an incoming EEA firm exercising an EEA right, or an incoming Treaty firm exercising a Treaty right, the effect is to reserve to the Home State regulator the assessment of the fitness and propriety of a person performing a function in
REC 5.2.14GRP

Information and supporting documentation (see REC 5.2.4 G).

(1)

Details of the applicant's constitution, structure and ownership, including its memorandum and articles of association (or similar or analogous documents ) and any agreements between the applicant, its owners or other persons relating to its constitution or governance (if not contained in the information listed in REC 5.2.3A G)1. An applicant for RAP status must provide details of the relationship between the governance arrangements in place for the UK RIE and the RAP.3

(2)

Details of all business to be conducted by the applicant, whether or not a regulated activity (if not contained in the information listed in REC 5.2.3A G)1.

(3)

Details of the facilities which the applicant plans to operate, including details of the trading platform or (for an RAP) auction platform,3 settlement arrangements, clearing facilitation services5 and custody services which it plans to supply. An applicant for RAP status must provide details on the relationship between the auction platform and any secondary market in emissions auction products4 which it operates or plans to operate.3

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(4)

Copies of the last three annual reports and accounts and, for the current financial year, quarterly management accounts.

(5)

Details of its business plan for the first three years of operation as a UK recognised body (if not contained in the information listed in REC 5.2.3A G)1.

(6)

A full organisation chart and a list of the posts to be held by key individuals (with details of the duties and responsibilities) and the names of the persons proposed for these appointments when these names are available (if not contained in the information listed in REC 5.2.3A G)1.

(7)

Details of its auditors, bankers, solicitors and any persons providing corporate finance advice or similar services (such as reporting accountants) to the applicant.

(8)

Details of any relevant functions to be outsourced or delegated, with copies of relevant agreements.

(9)

Details of information technology systems and of arrangements for their supply, management, maintenance and upgrading, and security.

(10)

Details of all plans to minimise disruption to operation of its facilities in the event of the failure of its information technology systems.

(11)

Details of internal systems for financial control, arrangements for risk management and insurance arrangements to cover operational and other risks.

(12)

Details of its arrangements for managing any counterparty risks.

5

(13)

Details of internal arrangements to safeguard confidential or privileged information and for handling conflicts of interest.

(14)

Details of arrangements for complying with the notification rules and other requirements to supply information to the FCA5.

5

(15)

Details of the arrangements to be made for monitoring and enforcing compliance with its rules and with its clearing, settlement and default arrangements.

(16)

A summary of the legal due diligence carried out in relation to ascertaining the enforceability of its rules (including default rules) and the results and conclusions reached.

5

(17)

Details of the procedures to be followed for declaring a member in default, and for taking action after that event to close out positions, protect the interests of other members and enforce its default rules.

(18)

Details of membership selection criteria, rules and procedures, including (for an RAP) details of how the rules of the UK RIE will change in order to reflect RAP status.3

(19)

Details of arrangements for recording transactions effected by, or cleared through, its facilities.

(20)

Details of arrangements for detecting financial crime and market abuse , including arrangements for complying with money laundering law.

(21)

Details of criteria, rules and arrangements for selecting specified investments to be admitted to trading on (or cleared by) an RIE and, where relevant, details of how information regarding specified investments will be disseminated to users of its facilities.

5

(22)

Details of arrangements for cooperating with the FCA5 and other appropriate authorities, including draft memoranda of understanding or letters.

5

(23)

Details of the procedures and arrangements for making and amending rules, including arrangements for consulting on rule changes.

(24)

Details of disciplinary and appeal procedures, and of the arrangements for investigating complaints.
BIPRU 5.6.23GRP
The appropriate regulator will not grant a master netting agreement internal models approach permission if it is not satisfied that the standards in BIPRU 5.6.19 R to BIPRU 5.6.22 R are met.
SYSC 13.7.9GRP
Operating processes and systems at separate geographic locations may alter a firm's operational risk profile (including by allowing alternative sites for the continuity of operations). A firm should understand the effect of any differences in processes and systems at each of its locations, particularly if they are in different countries, having regard to:(1) the business operating environment of each country (for example, the likelihood and impact of political disruptions or
SYSC 2.1.6GRP

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).

15155

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).

66

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

663

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 Code7 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
DISP App 3.1.2GRP
The aspects of complaint handling dealt with in this appendix are how the firm should:(1) assess a complaint in order to establish whether the firm's conduct of the sale failed to comply with the rules, or was otherwise in breach of the duty of care or any other requirement of the general law (taking into account relevant materials published by the FCA, other relevant regulators, the Financial Ombudsman Service and former schemes). In this appendix this is referred to as a "breach
SUP 16.18.3GRP
This section specifies the end dates for reporting periods for AIFMs and the reporting period for small AIFMs for the types of AIFM to whom this section applies. Although article 110 of the AIFMD level 2 regulations (Reporting to competent authorities) (as replicated in SUP 16.18.4 EU) applies certain reporting requirements directly to AIFMs, it does not specify the end dates for reporting periods for an AIFM and, for small AIFMs, it does not specify the reporting period. Therefore,
REC 2.4.5GRP
In assessing whether its connection with any person could affect whether a UK recognised body is a fit and proper person, the FCA4 may have regard to:4(1) the reputation and standing of that other person, including his standing with any relevant UK or overseas regulator;(2) breaches of any law or regulation by that other person; (3) the roles of any of the UK recognised body's key individuals who have a position within organisations under the control or influence of that other
FIT 2.1.3GRP
The matters referred to in FIT 2.1.1 G to which the appropriate regulator will have regard include, include, but are not limited to:(1) whether the person has been convicted of any criminal offence; this must include, where provided for by the Rehabilitation Exceptions Orders4to2 the Rehabilitation of Offenders Act 1974 or the Rehabilitation of Offenders (Northern Ireland) Order 1978 (as applicable)4, any spent convictions2; particular consideration will be given to offences
SUP 3.2.1GRP
This chapter sets out rules and guidance on the role auditors play in the appropriate regulator's monitoring of firms' compliance with the requirements and standards under the regulatory system. In determining whether a firm satisfies the threshold conditions, the appropriate regulator has regard to whether the firm has appointed auditors with sufficient experience in the areas of business to be conducted by the firm. Auditors act as a source of information for the appropriate
SUP 15.7.9GRP
Firms wishing to communicate with the appropriate regulator7 by electronic mail or fax should obtain the appropriate address or number from the FSA7appropriate regulator.77
REC 6A.2.2GRP
A requirement is relevant if it is imposed:(1) by the operator's Home State regulator in the implementation of MiFID or any EU2 legislation made under MiFID;2(2) by provision implementing MiFID, or any EU2 legislation made under it, in the operator's Home State; or2(3) by any directly applicable EU2 regulation made under MiFID.2
DTR 5.8.2RRP
(1) A notification required of voting rights arising from the holding of financial instruments must include the following information:(a) the resulting situation in terms of voting rights;(b) if applicable, the chain of controlled undertakings through which financial instruments are effectively held;(c) the date on which the threshold was reached or crossed;(d) for instruments with an exercise period, an indication of the date or time period where shares will or can be acquired,
LR 8.6.4GRP
When considering an application for approval as a sponsor the FCA may:(1) carry out any enquiries and request any further information which it considers appropriate, including consulting other regulators;(2) request that the applicant or its specified representative answer questions and explain any matter the FCA considers relevant to the application; and6(3) take into account any information which it considers appropriate in relation to the application.22(4) [deleted]22[Note:
PR 1.1.1RRP
(1) 1PR 2, PR 3, PR 4.2, PR 5.1, PR 5.3.1 UK to PR 5.3.3 G and PR 5.5 only apply (subject to paragraph (2)) in relation to:(a) an offer, or a request for admission to trading of transferable securities, in respect of which section 85 of the Act applies (other than an exempt offer under section 86 of the Act) and in relation to which the United Kingdom is the Home State;(b) an offer, or a request for admission to trading of transferable securities, where under section 87 of the
APER 1.1A.4GRP
The relevance of MiFID to the Statements of Principle will depend on the extent to which the corresponding requirement imposed on firms under MiFID is reserved to a Home State regulator or has been disapplied under MiFID (see APER 2.1A.2 P and FIT 1.2.4 G. See also COBS 1 Annex 1, Part 2, 1.1R (EEA territorial scope rule: compatibility with European law)).