Related provisions for SUP 15.6.3

The Principles for Businesses (PRIN)

The Principles for Businesses (PRIN) set out, high-level requirements, some of which are imposed by the FCA and some by the PRA.12 They provide a general statement of regulatory requirements. The Principles apply to all12credit unions. In applying the Principles to credit unions, the appropriate regulator12 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 appropriate regulator12 of its powers.

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 appropriate regulator12, 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 appropriate regulator12 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 appropriate regulator's12 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: 13SUP 1A13 (The appropriate regulator's12 approach to supervision), SUP 2 (Information gathering by the appropriate regulator12 on its own initiative), SUP 3.1 to SUP 3.8 (Auditors), SUP 5 (Skilled persons), SUP 6 (Applications to vary or cancel Part 4A12permission), SUP 7 (Individual requirements), SUP 8 (Waiver and modification of rules), SUP 9 (Individual guidance), 13SUP 10A and SUP 10B13 (Approved persons), SUP 11 (Controllers and Close links), SUP 15 (Notifications to the appropriate regulator12) 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 appropriate regulator12 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 FCA's12 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 FCA's12 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.12

The Enforcement Guide (EG)

The Enforcement Guide (EG) describes the FCA's12 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.

1Introduction

1.

TC Appendix 4E contains a list of appropriate qualifications for the purposes of TC 2.1.10 E.

2.

This Appendix sets out:

(1)

the criteria which the FCA may take into account when assessing a qualification provider; and

(2)

the information the FCA will expect the qualification provider to provide if it asks the FCA to add a qualification to the list of appropriate qualifications in TC Appendix 4 E.

Criteria for assessing a qualification provider

3.

The FCA will expect the qualification provider of an appropriate qualification to have, in the FCA's opinion:

(1)

assessors and qualification developers who are trained and qualified;

(2)

valid, reliable and robust assessment methods;

(3)

robust governance and a clear separation of function between its qualification services and any other services it performs, including effective procedures for managing any conflicts of interest;

(4)

procedures for reviewing and refreshing its syllabus and question banks to ensure that they are relevant and up to date;

(5)

robust and credible procedures for assessing a candidate's demonstration of the learning outcomes specified in the relevant examination standards;

(6)

robust arrangements for contingency and business continuity planning in relation to its qualification services;

(7)

appropriate records management procedures in relation to its qualification services;

(8)

procedures for dealing with inappropriate conduct by candidates, for example, attempting to obtain or obtaining qualifications dishonestly;

(9)

robust procedures for the setting of assessments and marking of results; and

(10)

adequate resources in order to be financially viable.

Information about the qualification to be provided to the FCA

4.

If a qualification provider asks the FCA to add a qualification to the list of appropriate qualifications in TC Appendix 4 E, the FCA will expect the qualification provider to:

(1)

where relevant, specify the qualifications framework within which the qualification is placed;

(2)

specify the activity in TC Appendix 1 to which the qualification relates;

(3)

set out the recommended prior knowledge, attainment or experience for candidates;

(4)

where relevant, set out the exemption policy for a candidate's prior learning or achievement;

(5)

provide the relevant learning materials to the FCA together with an explanation of how those learning materials correspond to the content of the most recent examination standards. Any content of the examination standards which has been excluded from the learning materials must be justified;

(6)

where applicable, explain how grading is applied;

(7)

where applicable, explain the provider's rules of combination;

(8)

provide details of expected learning hours or any other similar arrangements;

(9)

where applicable, specify the level of the overall qualification with reference to the relevant qualification framework or, if there is no relevant qualification framework, the European Qualifications Framework and the percentage of the qualification at that level, as well as the percentages and the levels for the remainder of the qualification;

(10)

provide details of any credit for prior learning included in the qualification together with an explanation of how it meets the most recent examination standards; and

(11)

provide an explanation of how the qualification compares in quality and standard to other similar qualifications.

Information about the qualification provider to be provided to the FCA

5.

When considering whether to include or retain a qualification in the list of appropriate qualifications, the FCA may consider, where relevant:

(1)

whether the qualification provider has in place suitable arrangements for:

(a)

meeting its statutory duties in relation to equality and diversity; and

(b)

reducing barriers to learning, for example, for candidates with learning difficulties;

(2)

any concerns, issues or investigations which have been raised by the qualification provider's qualifications regulator;

(3)

the annual pass rates of each of the relevant qualifications;

(4)

the quality of the service the qualification provider provides to candidates in relation to qualifications and its complaints procedures;

(5)

how the qualification provider maintains its qualifications to ensure they remain comparable to other qualifications in the same sector; and

(6)

whether the qualification provider gives candidates reasonable notice of any syllabus change, change in method of assessment or pass standards;

(7)

information supporting the criteria in TC Appendix 5G paragraph 3.