Related provisions for DISP App 1.4.12
21 - 40 of 360 items.
The purpose of this guidance is to outline the circumstances in which a body corporate will be an open-ended investment company and, in so doing, to:(1) give an overview of the definition (see PERG 9.3 (The definition)) and describe its three main elements:(a) an open-ended investment company must be a collective investment scheme (see PERG 9.4 (Collective investment scheme (section 235 of the Act)));(b) it must satisfy the 'property' condition in section 236(2) of the Act (see
This guidance is issued under section 139A of the Act (Guidance). It is designed to throw light on particular aspects of regulatory requirements, not to be an exhaustive description of a person's obligations. If a person acts in line with the guidance in the circumstances it contemplates, the FCA will proceed on the footing that the person has complied with aspects of the requirement to which the guidance relates. Rights conferred on third parties cannot be affected by guidance
The only kind of body corporate of an open-ended kind that may currently be formed under the law of the United Kingdom is one that is authorised by the FCA. A person intending to form an open-ended body corporate that has its head office in Great Britain should refer to the Open-ended Investment Companies Regulations 2001 (SI 2001/1228). Bodies corporate formed under these Regulations are referred to in the Handbook as investment companies with variable capital (or ' ICVCs ').
10Although PRIN does not apply to a firm in relation to its carrying on of auction regulation bidding, the FCA35expects to be given notice of events that are material to the FCA's35supervision of that business and so firms carrying on that business should have regard to the guidance in SUP 15.3.8 G to SUP 15.3.10 G.3535
Compliance with Principle 11 includes, but is not limited to, giving the appropriate regulator35 notice of:35(1) any proposed restructuring, reorganisation or business expansion which could have a significant impact on the firm's risk profile or resources, including, but not limited to:(a) setting up a new undertaking within a firm'sgroup, or a new branch (whether in the United Kingdom or overseas); or (b) commencing the provision of cross border services into a new territory;
A notification under Principle 11 may be given orally or in writing (as set out in SUP 15.7.1 R and SUP 15.7.2 G), although the appropriate regulator35 may request written confirmation of a matter. However, it is the responsibility of a firm to ensure that matters are properly and clearly communicated to the appropriate regulator.35 A firm should provide a written notification if a matter either is complex or may be such as to make it necessary for the appropriate regulator35
6SUP 15.3.11 R (1)(e) relates to the standard requirement in the permission of those firms which fall outside MiFID because of the Treasury's implementation of Article 3 of MiFID. Guidance on how the Treasury has exercised the Article 3 exemption for the United Kingdom is given in Q48 and the following questions and answers in PERG 13.5 (Exemptions from MiFID).
The purpose of this guidance is to help persons consider whether they need authorisation or a variation of their Part 4A permission. Businesses new to regulation who act only as introducers of insurance business are directed in particular to PERG 5.6.2 G(article 25(1): arranging (bringing about) deals in investments) to PERG 5.6.9 G (Exclusion: Article 72C (Provision of information on an incidental basis)) and PERG 5.15.6 G (Flow chart: Introducers) to help consider whether they
This guidance is issued under section 139A of the Act (Guidance). It is designed to throw light on particular aspects of regulatory requirements, not to be an exhaustive description of a person's obligations. If a person acts in line with the guidance and the circumstances contemplated by it, then the FCA will proceed on the footing that the person has complied with aspects of the requirement to which the guidance relates.
Rights conferred on third parties cannot be affected by guidance given by the FCA. This guidance represents the FCA's view, and does not bind the courts, for example, in relation to the enforceability of a contract where there has been a breach of the general prohibition on carrying on a regulated activity in the United Kingdom without authorisation (see sections 26 to 29 of the Act (Enforceability of Agreements)).
A person may wish to carry on activities related to other forms of investment in connection with contracts of insurance, such as advising on and arrangingregulated mortgage contracts. Such a person should also consult the guidance in PERG 2 (Authorisation and Regulated Activities), PERG 4 (Regulated activities connected with mortgages) and PERG 8 (Financial Promotion and Related Activities).
This chapter contains the recognition requirements for UK RIEs4 (other than RAPs) 3 and sets out guidance on those requirements. Except for REC 2.5A, references to recognised body or UK recognised bodies in the rest of this chapter shall be read as referring to UK RIEs.4 This chapter also contains the MiFID implementing requirements for UK RIEs.243
These recognition requirements must be satisfied by applicants for UK RIE4 status before recognition is granted and by all UK RIEs4 at all times while they are recognised. In addition the MiFID implementing requirements must be satisfied by applicants for UK RIE status before recognition is granted and by all UK RIEs at all times while they are recognised. 2The same standards apply both on initial recognition and throughout the period recognised body status is held. The term UK
(1) The paragraphs in the Schedule to the Recognition Requirements Regulations are grouped in this sourcebook in sections which give guidance on the same subject for UK RIEs.44(2) The table in REC 2.1.4 G indicates in which section each of those paragraphs (and the associated guidance) can be found.2
Location of recognition requirements and guidance
Recognition Requirements Regulations |
Subject |
Section in REC 2 |
Regulation 6 |
Method of satisfying recognition requirements |
2.2 |
Part I of the Schedule |
UK RIE recognition requirements |
|
Paragraph 1 |
Financial resources |
2.3 |
Paragraph 2 |
Suitability |
2.4 |
Paragraph 3 |
Systems and controls |
2.5 |
Paragraphs 4(1) and 4(2)(aa)2 2 |
General safeguards for investors |
2.6 |
Paragraph 4(2)(a) |
Access to facilities |
2.7 |
Paragraph 4(2)(b) |
Proper markets |
2.12 |
Paragraph 4(2)(c) |
Availability of relevant information |
2.12 |
Paragraph 4(2)(d) |
Settlement |
2.8 |
Paragraph 4(2)(e) |
Transaction recording |
2.9 |
2Paragraph 4(2)(ea) |
Conflicts |
2.5 |
Paragraph 4(2)(f) |
Financial crime and market abuse |
2.10 |
Paragraph 4(2)(g) |
Custody |
2.11 |
Paragraph 4(3) |
Definition of relevant information |
2.12 |
2Paragraph 4A |
Provision of pre-trade information about share trading |
2.6 |
2Paragraph 4B |
Provision of post-trade information about share trading |
2.6 |
Paragraph 6 |
Promotion and maintenance of standards |
2.13 |
Paragraph 7 |
Rules and consultation |
2.14 |
2Paragraph 7A |
Admission of financial instruments to trading |
2.12 |
2Paragraph 7B and 7C |
Access to facilities |
2.7 |
2Paragraph 7D |
Settlement |
2.8 |
2Paragraph 7E |
Suspension and removal of financial instruments from trading |
2.6 |
Paragraph 8 |
Discipline |
2.15 |
Paragraph 9 |
Complaints |
2.16 |
2Paragraph 9A |
Operation of a multilateral trading facility |
2.16A |
Part II of the Schedule |
UK RIE default rules in respect of market contracts |
2.174 |
(1) This paragraph sets out guidance on assessing the adequacy of a rating system's discriminative power (see BIPRU 4.3.30 R (3) on the meaning of discriminative power).(2) A firm should be able to explain the performance of its rating systems against its chosen measure (or measures) of discriminative power. In making this comparison a firm should rely primarily on actual historic default experience where this is available. In particular, a firm should be able to explain:(a) the
(1) This paragraph contains guidance on BIPRU 4.3.43 R and more general guidance about the governance of rating systems.(2) In determining the assignment referred to in BIPRU 4.3.43 R, a firm should have regard to the sensitivity of the rating to movements in fundamental risk drivers.(3) A firm should, for any rating system, be able to demonstrate that it acts appropriately or has an appropriate policy, as applicable, with respect to:(a) any deficiencies caused by its not being
(1) This paragraph contains guidance on BIPRU 4.3.51 R (7).(2) BIPRU 4.3.51 R (7) does not require that each individual assignment of an exposure to a pool or grade should be the subject of an open-ended review by reference to factors not covered by the model if:(a) that is not necessary in order to meet the requirements of BIPRU 4 about the ability of the rating system to predict and to discriminate (as referred to in BIPRU 4.3.29 R to BIPRU 4.3.30 R (Validation of internal estimates));
(1) This paragraph contains guidance on BIPRU 4.3.51 R for the use of external models.(2) BIPRU 4.3.51 R (2) - BIPRU 4.3.51 R (8) also apply to mechanical methods to assign exposures or obligors to facility grades or pools and to a combination of models and mechanical methods.(3) The standards which a firm applies to an external model should not be lower than those for internal models. (4) The appropriate regulator will not accredit any individual model or vendor. The burden is
(1) This paragraph contains guidance on the definition of default.(2) If:(a) a firm ordinarily assigns exposures in the sovereign, institution and corporate IRB exposure class to a member of a group substantially on the basis of membership of that group and a common group rating; and(b) the firm does so in the case of a particular group;(3) the firm should consider whether members of that group should be treated as a single obligor for the purpose of the definition of default.(4)
(1) This paragraph contains guidance on the meaning of days past due for the purposes of the definition of default.(2) If an amount is overdue by the relevant number of days past due because of administrative oversight on the part of the obligor or the firm, a firm with sufficient information may, retrospectively if necessary, treat that as not involving a default if:(a) that failure is not associated with any increase in the risk referred to in BIPRU 4.3.56 R (1); and(b) treating
(1) This paragraph provides guidance on BIPRU 4.3.73 R.(2) Relevant data and information under BIPRU 4.3.73 R includes external data.(3) Where internal default and loss experience is scarce, a firm should consider using material relevant external information. When using external information such as industry averages when determining LGD or conversion factors, a firm should consider whether this data is appropriate to its own experience and whether adjustments are necessary.
(1) This paragraph contains guidance about the interpretation of the requirements relating to comparability in BIPRU 4.3.85 R. It is also relevant to the requirement for representative data in BIPRU 4.3.51 R (5), to the references to comparability in the additional guidance in BIPRU 4.3.53 G (7)(b) and to the requirements for similarity in BIPRU 4.3.92 R.(2) In general, comparability should be based on analyses of the population of exposures represented in the data, the lending
(1) This guidance sets out the basis on which a firm may rely upon a rating system or data provided by another member of its group.(2) A firm may rely upon a rating system or data provided by another member of its group if the following conditions are satisfied:(a) the firm only does so to the extent that it is appropriate, given the nature and scale of the firm's business and portfolios and the firm's position within the group;(b) the group is an EEA banking and investment group;(c)
(1) This paragraph provides guidance on BIPRU 4.2.2 R and in particular BIPRU 4.2.2 R (1).(2) The information that a firm produces or uses for the purpose of the IRB approach should be reliable and take proper account of the different users of the information produced (customers, shareholders, regulators and other market participants).(3) A firm should establish quantified and documented targets and standards, against which it should test the accuracy of data used in its rating
(1) This paragraph provides guidance on BIPRU 4.2.2 R and in particular BIPRU 4.2.2 R (2).(2) The IRB approach as applicable to a firm should be an integral part of its business and risk management processes and procedures to the extent that credit risk is relevant to them. It should also have a substantial influence on its decision-making and actions.21(a) particular regard should be had to the use of the IRB approach in: (i) credit approval;(ii) individual and portfolio limit
This paragraph provides further guidance on BIPRU 4.2.2 R and in particular BIPRU 4.2.2 R (2). In the appropriate regulator's view risk management has an essential role in informing risk decisions. However, an essential role does not necessarily mean an exclusive role or even always a primary role. There may be justifiable differences between the IRB approach and the firm's use of rating systems for its internal purposes as referred to in BIPRU 4.2.2 R (2). For example, internal
(1) A firm should achieve full roll-out of the IRB approach to all its exposures, subject to the exemptions outlined in BIPRU 4.2.26 R, within the period specified in its IRB permission. A firm should not retain a permanent mix of portfolios on the standardised approach and the IRB approach, on the foundation IRB approach and the advanced IRB approach or on a mixture of all approaches with the exception of portfolios covered by those exemptions.(2) This applies to a move:(a) from
(1) This guidance deals with some possible effects of acquiring a major new business after the grant of an IRB permission.(2) A firm should if possible ensure that the exposures arising through the acquisition are dealt with in accordance with the firm'sIRB permission.(3) If the acquisition is made during the currency of a roll out plan under BIPRU 4.2.18 R, a firm should ensure that the exposures arising through the acquisition are dealt with in accordance with that plan. For
Individual guidance is guidance that is not given to persons or regulated persons generally or to a class of regulated person. It will normally be given to one particular person, which relates to its own particular circumstances or plans. It may be oral or written. Individual guidance will not be published but may at the FCA's discretion be converted to general guidance and published in the Handbook. Written individual guidance will often be labelled as such1
A person may need to ask the FCA for individual guidance on how the rules and general guidance in the Handbook, the Act or other regulatory requirements apply in their particular circumstances. This chapter describes how a person may do this. Section 139A of the Act gives the FCA the power to give guidance consisting of such information and advice as it considers appropriate.
151FEES applies to all persons required to pay a fee or levy under a provision of the Handbook. The purpose of this chapter is to set out to whom the rules and guidance in FEES apply. FEES 2 (General Provisions) contains general provisions which may apply to any type of fee payer. FEES 3 (Application, Notification and Vetting Fees) covers one-off fees payable on a particular event for example various application fees (including those in relation to authorisation, variation of
The purpose of any provision in the Handbook is to be gathered first and foremost from the text of the provision in question and its context among other relevant provisions. The guidance given on the purpose of a provision is intended as an explanation to assist readers of the Handbook. As such, guidance may assist the reader in assessing the purpose of the provision, but it should not be taken as a complete or definitive explanation of a provision's purpose.
In the Glossary, the definition of designated investment exchange lists certain investment exchanges. Further information on designated investment exchanges, including guidance on the addition of an investment exchange to the list, is set out in GEN 2 Annex 1 G and the obligation to pay the application fee is set out in 53FEES 3.25.
Application of different sections of SUP 16 (excluding SUP 16.13, SUP 16.15, SUP 16.16 and SUP 16.17)6627
(1) The purposes of this section are to:(a) provide UK recognised bodies with guidance regarding the provisions of PIDA; and(b) Encourage UK recognised bodies to consider adopting and communicating to workers appropriate internal procedures for handling workers' concerns as part of an effective risk management system.(2) In this section "worker" includes, but is not limited to, an individual who has entered into a contract of employment.
(1) UK recognised bodies are encouraged to consider adopting appropriate internal procedures which will encourage their workers with concerns to blow the whistle internally about matters which are relevant to the functions of the FCA.22(2) In considering appropriate internal procedures, UK recognised bodiesmay find the guidance provided to firms in SYSC 18.2.2 G (2) and SYSC 18.2.2 G (3)1 helpful.1
Section 21 applies to financial promotions concerning agreements for qualifying credit. PERG 8.17.1A G to PERG 8.17.18 G has guidance about the treatment of such financial promotions. Section 21 applies not only to financial promotions about regulated mortgage contracts but also to financial promotions about certain other types of credit agreement. This is explained in more detail in PERG 8.17.2 G. to PERG 8.17.3 G.222
Section 21 also applies to financial promotions concerning home reversion plans,3home purchase plans and regulated sale and rent back agreements3. Guidance on these activities and related financial promotions is given in PERG 14 (Guidance on home reversion, home purchase and regulated sale and rent back3activities).2
(1) 1This chapter applies to an EEA firm that wishes to exercise an entitlement to establish a branch in, or provide cross border services into, the United Kingdom under a Single Market Directive or the auction regulation7. (The Act refers to such an entitlement as an EEA right and its exercise is referred to in the Handbook as "passporting".) (See SUP App 3 (Guidance on passporting issues) for further guidance on passporting.)(2) This chapter also applies to:(a) a Treaty firm
This chapter does not apply to:(1) an EEA firm that wishes to carry on in the United Kingdom activities which are outside the scope of its EEA right and the scope of a permission granted under Schedule 4 to the Act; in this case the EEA firm requires a "top-up permission" under Part 4A16 of the Act (see the appropriate UK regulator's website http://www.fca.org.uk/firms/about-authorisation/getting-authorised for the FCA and www.bankofengland.co.uk/pra/Pages/authorisations/newfirm/default.aspx
(1) This chapter explains how an EEA firm and a Treaty firm can qualify for authorisation under Schedules 3 and 4 to the Act and how a UCITS qualifier is authorised under Schedule 5 to the Act. (2) This chapter also provides guidance on Schedule 3 to the Act for an incoming EEA firm that wishes to establish a branch in the United Kingdom instead of, or in addition to, providing cross border services into the United Kingdom or vice versa.
(1) EEA firms should note that this chapter only addresses the procedures which the appropriate UK regulator16 will follow under the Act.So, an EEA firm should consider this guidance in conjunction with the requirements with which it will have to comply in its Home State. 166(2) The guidance in this chapter represents the appropriate UK regulator's16 interpretation of the Single Market Directives, the auction regulation,7 the Act and the secondary legislation made under the Act.
The exclusion will be of assistance to introducers who would otherwise be carrying on the regulated activity of making arrangements with a view to transactions in investments (assuming, as mentioned in PERG 5.6.8 G, that they provide information only to policyholders or potential policyholders, and not to the intermediary or insurance undertaking to whom they introduce these policyholders or potential policyholders). In order to assist such introducers determine whether or not
In the FCA's view, the crucial element of the exclusion in article 27 is the inclusion of the word 'merely'. When a publisher, broadcaster or internet website operator goes beyond what is necessary for him to provide his service of publishing, broadcasting or otherwise facilitating the issue of promotions, he may well bring himself within the scope of article 25(2). Further detailed guidance relating to the scope of the exclusion in article 27 is contained in PERG 2.8.6G (2) (Arranging
Market makers in traded endowment policies may be able to rely on this exclusion to avoid the need to be authorised. They must ensure, however, that where they are carrying on the regulated activity of dealing in investments as principal (article 14) they are also able to rely on the exclusions in articles 15 or 16 (see the guidance in PERG 2.8.4 G (Dealing in investments as principal)).
The effect of PERG 5.6.17G (4) is that some persons who, in making introductions, are making arrangements with a view to transactions in investments under article 25(2) of the Regulated Activities Order, cannot use the introducing exclusion. This is if, in general terms, the arrangements for making introductions relate to contracts of insurance (PERG 5.6.19 G has further guidance on when arrangements for introductions may be regarded as relating to contracts of insurance). However,
The appropriate regulator is likely to regard a simplified ILAS BIPRU firm whose liquid assets buffer accords with the simplified buffer requirement as having an adequate buffer of assets and a prudent funding profile for the purpose of BIPRU 12.2.8R. Further guidance on this matter is provided in BIPRU 12.6.5G.
BIPRU 12.5 sets out in greater detail the appropriate regulator'sILAS regime. BIPRU 12.9 sets out in greater detail the appropriate regulator's process for issuing an ILAS BIPRU firm with individual liquidity guidance and its approach to monitoring a firm's adherence to that guidance or, as the case may be, to the simplified buffer requirement.
6The guidance in COND 2.3 should be read as applying to both paragraph 2C of Schedule 6 of the Act and, as far as relevant to the discharge by the FCA of its functions under the Act in respect of firms carrying on, or seeking to carry on, a PRA-regulated activity, paragraph 3B of Schedule 6 of the Act.
6Firms carrying on, or seeking to carry on, a PRA-regulated activity, should note that the PRA is also responsible for assessing effective supervision under its own threshold conditions. Paragraphs 4F and 5F of Schedule 6 to the Act set out the effective supervision threshold conditions which are relevant to the discharge by the PRA of its functions under the Act in relation to firms carrying on, or seeking to carry on, a PRA-regulated activity. For the avoidance of doubt, this
5Paragraphs 2C(2)(e) and (f) and 3B(2)(e) and (f)6 of Schedule 6 to the Act reflect legislation initially introduced in the Post-BCCI Directive, which defines close links, in part, by reference to participation. Recital 5 of the Post-BCCI Directive gives further guidance on what is meant by ‘participation’ for the purposes of the directive. It states that the sole fact of having acquired a significant proportion of a company’s capital does not constitute participation for the
General guidance on the perimeter is also contained in various FCA documents (mainly fact sheets and frequently asked questions) that are available on the FCA website at www.fca.org.uk.These documents, and the URL on which they may be accessed, include:(1) FCA Guidance Note GN9 (2010) on financial regulation for social housing providers which is available at http://www.fca.org.uk/your-fca/documents/fsa-guidance-9;4124(2) [deleted]212(3) [deleted](4) [deleted]313(5) [deleted]313(6)
Any person who, having read relevant general guidance and, where appropriate, taken legal advice, remains uncertain about whether his activities amount to regulated activities or his communications will be subject to the restriction in section 21 of the Act, may seek individual guidance from the FCA. Requests for individual guidance should be made in line with SUP 9.
In addition, the FCA has established a team to provide general assistance and guidance to persons generally about the scope of the Act. Enquiries of this kind may be made:(1) by authorised firms, to either the FirmContact Centre (email fcc@fca.org.uk, Tel 0845 606 9966) or their normal supervisory contact; or(2) by individuals or non-authorised firms, to the Consumer Contact Centre (email ccc@fca.org.uk, Tel 0800 111 6768 ) or the Perimeter Enquiries Team (email authorisation