Related provisions for SUP 15.7.5A

PRIN 2.1.1R06/06/2014

The Principles

1 Integrity	A firm must conduct its business with integrity.
2 Skill, care and diligence	A firm must conduct its business with due skill, care and diligence.
3 Management and control	A firm must take reasonable care to organise and control its affairs responsibly and effectively, with adequate risk management systems.
4 Financial prudence	A firm must maintain adequate financial resources.
5 Market conduct	A firm must observe proper standards of market conduct.
6 Customers' interests	A firm must pay due regard to the interests of its customers and treat them fairly.
7 Communications with clients	A firm must pay due regard to the information needs of its clients, and communicate information to them in a way which is clear, fair and not misleading.
8 Conflicts of interest	A firm must manage conflicts of interest fairly, both between itself and its customers and between a customer and another client.
9 Customers: relationships of trust	A firm must take reasonable care to ensure the suitability of its advice and discretionary decisions for any customer who is entitled to rely upon its judgment.
10 Clients' assets	A firm must arrange adequate protection for clients' assets when it is responsible for them.
11 Relations with regulators	A firm must deal with its regulators in an open and cooperative way, and must disclose to the appropriate regulator appropriately anything relating to the firm of which that regulator would reasonably expect notice.

SUP 11.1.2R01/04/2014

Applicable sections (see SUP 11.1.1 R)

	Category of firm	Applicable sections
(1)	A UK domestic firm other than a building society, a non-directive friendly society5, a non-directive firm 4 5or (in the case of an FCA-authorised person) a firm with only a limited permission 3 5 4	All except SUP 11.3, SUP 11.4.2A RandSUP 11.4.4 R3
(1A)	A building society	(a) In the case of an exempt change in control (see Note), SUP 11.1, SUP 11.2andSUP 11.9 (b) In any other case, all except SUP 11.3andSUP 11.4.4 R3 9
(2)	A non-directive friendly society	SUP 11.1, SUP 11.2, andSUP 11.9
(2A) 3	A non-directive firm 4 3 4	all exceptSUP 11.3, SUP 11.4.2 R, 4andSUP 11.4.4 R3
5(2B)	(In the case of an FCA-authorised person) a firm with only a limited permission	All except SUP 11.3, SUP 11.4.2 R , and SUP 11.4.4 R
(3)	An overseas firm	All except SUP 11.3, SUP 11.4.2 R, SUP 11.4.2A R, 4, SUP 11.4.9 G, SUP 11.5.8 G to SUP 11.5.10 G, SUP 11.6.2 R, SUP 11.6.3 R, 4, SUP 11.73
Note	In row (1A), a change in control is exempt if the controller or proposed controller is exempt from any obligation to notify the appropriate regulator 9 under Part XII of the Act (Control Over Authorised Persons9) because of The Financial Services and Markets Act 2000 (Controllers) (Exemption) Order 2009 (SI 2009/7744). (See SUP 11.3.2A G).2 1 9 4 4 9 9 4 4 9 4

PR 2.3.1EU27/09/2013

Articles 3 to 23 of the PD Regulation provide for the minimum information to be included in a prospectus:

Note: the Annexes (including schedules and building blocks) referred to in these articles are set out for information in PR App 3.

Article 3

Minimum information to be included in a prospectus

A prospectus shall be drawn up by using one or a combination of the schedules and building blocks set out in this Regulation.2

2

A prospectus shall contain the information items required in Annexes I to XVII and Annexes XX to XXX depending on the type of issuer or issues and securities involved. Subject to Article 4a(1), a competent authority shall not require that a prospectus contains information items which are not included in Annexes I to XVII or Annexes XX to XXX.3

1 2 2 3

In order to ensure conformity with the obligation referred to in Article 5(1) of Directive 2003/71/EC, the competent authority of the home Member State, when approving a prospectus in accordance with Article 13 of that Directive, may, on a case by case basis, require the information provided by the issuer, the offeror or the person asking for admission to trading on a regulated market to be completed, for each of the information items.2

2

2Where the issuer, the offeror or the person asking for the admission to trading on a regulated market is required to include a summary in a prospectus, in accordance with Article 5(2) of Directive 2003/71/EC, the competent authority of the home Member State, when approving the prospectus in accordance with Article 13 of that Directive, may, on a case by case basis, require certain information provided in the prospectus, to be included in the summary.

3[Note: See transitional provisions in Regulation (EU) No 862/2012]

Article 4 Share registration document schedule
1.	For the share registration document information shall be given in accordance with the schedule set out in Annex I.
2.	The schedule set out in paragraph 1 shall apply to the following:
	(1)	shares and other transferable securities equivalent to shares;
	(2)	other securities which comply with the following conditions:
		(a)	they can be converted or exchanged into shares or other transferable securities equivalent to shares, at the issuer’s or at the investor’s discretion, or on the basis of the conditions established at the moment of the issue, or give, in any other way, the possibility to acquire shares or other transferable securities equivalent to shares, and
		(b)	provided that these shares or other transferable securities equivalent to shares are or will be issued by the issuer of the security and are not yet traded on a regulated market or an equivalent market outside the Community at the time of the approval of the prospectus covering the securities, and that the underlying shares or other transferable securities equivalent to shares can be delivered with physical settlement.

1Article 4a Share registration document schedule in cases of complex financial history or significant financial commitment
1.	Where the issuer of a security covered by Article 4(2) has a complex financial history, or has made a significant financial commitment, and in consequence the inclusion in the registration document of certain items of financial information relating to an entity other than the issuer is necessary in order to satisfy the obligation laid down in Article 5(1) of Directive 2003/71/EC, those items of financial information shall be deemed to relate to the issuer. The competent authority of the home Member State shall in such cases request that the issuer, the offeror or the person asking for admission to trading include those items of information in the registration document. Those items of financial information may include pro forma information prepared in accordance with Annex II. In this context, where the issuer has made a significant financial commitment any such pro forma information shall illustrate the anticipated effects of the transaction that the issuer has agreed to undertake, and references in Annex II to “the transaction” shall be read accordingly.
2.	The competent authority shall base any request pursuant to the first subparagraph of paragraph 1 on the requirements set out in item 20.1 of Annex I, item 15.1 of Annex XXIII, item 20.1 of Annex XXV, item 11.1 of Annex XXVII and item 20.1 of Annex XXVIII as regards the content of financial information and the applicable accounting and auditing principles, subject to any modification which is appropriate in view of any of the following factors:2 2
	(a)	the nature of the securities;
	(b)	the nature and range of information already included in the prospectus, and the existence of financial information relating to an entity other than the issuer in a form that might be included in a prospectus without modification;
	(c)	the facts of the case, including the economic substance of the transactions by which the issuer has acquired or disposed of its business undertaking or any part of it, and the specific nature of that undertaking;
	(d)	the ability of the issuer to obtain financial information relating to another entity with reasonable effort.
	Where, in the individual case, the obligation laid down in Article 5(1) of Directive 2003/71/EC may be satisfied in more than one way, preference shall be given to the way that is the least costly or onerous.
(3)	Paragraph 1 is without prejudice to the responsibility under national law of any other person, including the persons referred to in Article 6(1) of Directive 2003/71/EC, for the information contained in the prospectus. In particular, those persons shall be responsible for the inclusion in the registration document of any items of information requested by the competent authority pursuant to paragraph 1.
(4)	For the purposes of paragraph 1, an issuer shall be treated as having a complex financial history if all of the following conditions apply:
	(a)	its entire business undertaking at the time that the prospectus is drawn up is not accurately represented in the historical financial information which it is required to provide under item 20.1 of Annex I, item 15.1 of Annex XXIII, item 20.1 of Annex XXV, item 11.1 of Annex XXVII and item 20.1 of Annex XXVIII;2 2
	(b)	that inaccuracy will affect the ability of an investor to make an informed assessment as mentioned in Article 5(1) of Directive 2003/71/EC; and
	(c)	information relating to its business undertaking that is necessary for an investor to make such an assessment is included in financial information relating to another entity.
(5)	For the purposes of paragraph 1, an issuer shall be treated as having made a significant financial commitment if it has entered into a binding agreement to undertake a transaction which, on completion, is likely to give rise to a significant gross change. In this context, the fact that an agreement makes completion of the transaction subject to conditions, including approval by a regulatory authority, shall not prevent that agreement from being treated as binding if it is reasonably certain that those conditions will be fulfilled. In particular, an agreement shall be treated as binding where it makes the completion of the transaction conditional on the outcome of the offer of the securities that are the subject matter of the prospectus or, in the case of a proposed takeover, if the offer of securities that are the subject matter of the prospectus has the objective of funding that takeover.
(6)	For the purposes of paragraph 5 of this Article, and of item 20.2 of Annex I, item 15.2 of Annex XXIII and item 20.2 of Annex XXV, a significant gross change means a variation of more than 25%, relative to one or more indicators of the size of the issuer's business, in the situation of an issuer.2 2

Recital 9

Pro forma financial information is needed in case of significant gross change, i. e. a variation of more than 25% relative to one or more indicators of the size of the issuer's business, in the situation of an issuer due to a particular transaction, with the exception of those situations where merger accounting is required.

Article 5

Pro-forma financial information building block

For pro-forma financial information, information shall be given in accordance with the building block set out in Annex II.

Pro forma financial information should be preceded by an introductory explanatory paragraph that states in clear terms the purpose of including this information in the prospectus.

Article 6 Share securities note schedule
1.	For the share securities note information is necessary to be given in accordance with the schedule set out in Annex III.
2.	The schedule shall apply to shares and other transferable securities equivalent to shares5
53.	Where shares with warrants give the right to acquire the issuer’s shares and these shares are not admitted to trading on a regulated market, the information required by the schedule set out in Annex XII except item 4.2.2 shall also be given.

[Note: See transitional provisions in Regulation (EU) No 759/2013]5

Article 7

Debt and derivative securities registration document schedule for securities with a denomination per unit of less than EUR 100 0002

2

For the debt and derivative securities registration document concerning securities which are not covered in Article 4 with a denomination per unit of less than EUR 100 0002 or, where there is no individual denomination, securities that can only be acquired on issue for less than EUR 100 0002 per security, information shall be given in accordance with the schedule set out in Annex IV.

2 2

Article 8 Securities note schedule for debt securities with a denomination per unit of less than EUR 100 0002 2
1.	For the securities note for debt securities with a denomination per unit of less than EUR 100 0002 information shall be given in accordance with the schedule set out in Annex V. 2
2.	The schedule shall apply to debt where the issuer has an obligation arising on issue to pay the investor 100% of the nominal value in addition to which there may be also an interest payment.5
53.	Where debt securities are exchangeable or convertible into shares already admitted to trading on a regulated market, the information required by item 4.2.2 of the schedule set out in Annex XII shall also be given.
54.	Where debt securities are convertible or exchangeable into shares which are or will be issued by the issuer of the debt security or by an entity belonging to its group and these underlying shares are not already admitted to trading on a regulated market, information on the issuer of the underlying shares shall also be given in accordance with items 3.1 and 3.2 of the schedule set out in Annex III or, as the case may be, of the proportionate schedule set out in Annex XXIV.
55.	Where debt securities with warrants give the right to acquire the issuer’s shares and these shares are not admitted to trading on a regulated market, the information required by the schedule set out in Annex XII except item 4.2.2 shall also be given.

[Note: See transitional provisions in Regulation (EU) No 759/2013]5

Article 9

Guarantees building block

For guarantees information shall be given in accordance with the building block set out in Annex VI.

2Item 3 of Annex VI shall not apply where a Member State acts as guarantor.

Article 10

Asset backed securities registration document schedule

For the asset backed securities registration document information shall be given in accordance with the schedule set out in Annex VII.

Article 11

Asset backed securities building block

For the additional information building block to the securities note for asset backed securities information shall be given in accordance with the building block set out in Annex VIII.

Article 12

Debt and derivative securities registration document schedule for securities with a denomination per unit of at least EUR 100 0002

2

For the debt and derivative securities registration document concerning securities which are not covered in Article 4 with a denomination per unit of at least EUR 100 0002 or, where there is no individual denomination, securities that can only be acquired on issue for at least EUR 100 0002 per security, information shall be given in accordance with the schedule set out in Annex IX.

2 2

Article 13

Depository receipts schedule

For depository receipts issued over shares information shall be given in accordance with the schedule set out in Annex X.

Article 14 Banks registration document schedule
1.	For the banks registration document for debt and derivative securities and those securities which are not covered by article 4 information shall be given in accordance with the schedule set out in Annex XI.
2.	The schedule set out in paragraph 1 shall apply to credit institutions as defined in point (a) of Article 1(1) of Directive 2000/12/EC as well as to third country credit institutions which do not fall under that definition but have their registered office in a state which is a member of the OECD.
	These entities may also use alternatively the registration document schedules provided for under in Articles 7 and 12.

Article 15

Securities note schedule for derivative securities

1.

For the securities note for derivative securities information shall be given in accordance with the schedule set out in Annex XII.

2.

The schedule shall apply to securities which are not in the scope of application of the other securities note schedules referred to in articles 6, 8 and 16, except for the cases mentioned in article 6(3), Article 8(3) and (5) and article 16 (3) and (5). The schedule shall apply to certain securities where the payment and/or delivery obligations are linked to an underlying.5

5

[Note: See transitional provisions in Regulation (EU) No 759/2013]5

Article 16 Securities note schedule for debt securities with a denomination per unit of at least EUR 100 0002 2
1.	For the securities note for debt securities with a denomination per unit of at least EUR 100 0002 information shall be given in accordance with the schedule set out in Annex XIII. 2
2.	The schedule shall apply to debt where the issuer has an obligation arising on issue to pay the investor 100% of the nominal value in addition to which there may be also an interest payment.5
53.	Where debt securities are exchangeable or convertible into shares already admitted to trading on a regulated market, the information required by item 4.2.2 of the schedule set out in Annex XII shall also be given.
54.	Where debt securities are convertible or exchangeable into shares which are or will be issued by the issuer of the debt security or by an entity belonging to its group and these underlying shares are not already admitted to trading on a regulated market, information on the issuer of the underlying shares shall also be given in accordance with items 3.1 and 3.2 of the schedule set out in Annex III or, as the case may be, of the proportionate schedule set out in Annex XXIV.
55.	Where debt securities with warrants give the right to acquire the issuer’s shares and these shares are not admitted to trading on a regulated market, the information required by the schedule set out in Annex XII except item 4.2.2 shall also be given.

[Note: See transitional provisions in Regulation (EU) No 759/2013]5

Article 17 Additional information building block on the underlying share
1.	For the additional information on the underlying share, the description of the underlying share shall be given in accordance with the building block set out in Annex XIV.
	In addition, if the issuer of the underlying share is an entity belonging to the same group, the information required by the schedule referred to in Article 4 shall be given in respect of that issuer.
2.	The additional information referred to in the first subparagraph of paragraph 1 shall only apply to those securities which comply with both of the following conditions:
	(1)	they can be converted or exchanged into shares or other transferable securities equivalent to shares, at the issuer’s or at the investor’s discretion, or on the basis of the conditions established at the moment of the issue or give, in any other way, the possibility to acquire shares or other transferable securities equivalent to shares; and
	(2)	provided that these shares or other transferable securities equivalent to shares are or will be issued by the issuer of the security, by an entity belonging to the group of that issuer or by a third party and are not yet traded on a regulated market or an equivalent market outside the Union at the time of the approval of the prospectus covering the securities, and that the underlying shares or other transferable securities equivalent to shares can be delivered with physical settlement.5 5

[Note: See transitional provisions in Regulation (EU) No 759/2013]5

Article 18 Registration document schedule for collective investment undertakings of the closed-end type
1.	In addition to the information required pursuant to items 1, 2, 3, 4, 5.1, 7, 9.1, 9.2.1, 9.2.3, 10.4, 13, 14, 15, 16, 17.2, 18, 19, 20, 21, 22, 23, 24, 25 of Annex I, for the registration document for securities issued by collective investment undertakings of the closed-end type information shall be given in accordance with the schedule set out in Annex XV.
2.	The schedule shall apply to collective investment undertakings of the closed-end type holding a portfolio of assets on behalf of investors that:
	(1)	are recognised by national law in the Member State in which it is incorporated as a collective investment undertaking of the closed end type; or
	(2)	do not take or seek to take legal or management control of any of the issuers of its underlying investments. In such a case, legal control and/or participation in the administrative, management or supervisory bodies of the underlying issuer(s) may be taken where such action is incidental to the primary investment objective, necessary for the protection of shareholders and only in circumstances where the collective investment undertaking will not exercise significant management control over the operations of that underlying issuer(s).

Article 19

Registration document schedule for Member States, third countries and their regional and local authorities

1.

For the registration document for securities issued by Member States, third countries and their regional and local authorities information shall be given in accordance with the schedule set out in Annex XVI.

2.

The schedule shall apply to all types of securities issued by Member States, third countries and their regional and local authorities.

Article 20 Registration document schedule for public international bodies and for issuers of debt securities guaranteed by a member state of the OECD
1.	For the registration document for securities issued by public international bodies and for securities unconditionally and irrevocably guaranteed, on the basis of national legislation, by a state which is a member of the OECD information shall be given in accordance with the schedule set out in Annex XVII.
2.	The schedule shall apply to:
	- all types of securities issued by public international bodies; - to debt securities unconditionally and irrevocably guaranteed, on the basis of national legislation, by a state which is a member of the OECD.

3Article 20a Additional information building block for consent given in accordance with Article 3(2) of Directive 2003/71/EC
1.	For the purposes of the third subparagraph of Article 3(2) of Directive 2003/71/EC, the prospectus shall contain the following:
	(a)	the additional information set out in Sections 1 and 2A of Annex XXX where the consent is given to one or more specified financial intermediaries;
	(b)	the additional information set out in Sections 1 and 2B of Annex XXX where the issuer or the person responsible for drawing up the prospectus chooses to give its consent to all financial intermediaries.
2.	Where a financial intermediary does not comply with the conditions attached to consent as disclosed in the prospectus, a new prospectus shall be required in accordance with the second paragraph of Article 3(2) of Directive 2003/71/EC.
	[Note: See transitional provisions in Regulation (EU) No 862/2012]

Article 21 Combination of schedules and building blocks
1.	The use of the combinations provided for in the table set out in Annex XVIII shall be mandatory when drawing up prospectuses for the types of securities to which those combinations correspond according to this table. However, for securities not covered by those combinations further combinations may be used.
2.	The most comprehensive and stringent registration document schedule, i.e. the most demanding schedule in term of number of information items and the extent of the information included in them, may always be used to issue securities for which a less comprehensive and stringent registration document schedule is provided for, according to the following ranking of schedules:
	(1)	share registration document schedule;
	(2)	debt and derivative securities registration document schedule for securities with a denomination per unit of less than EUR 100 0002; 2
	(3)	debt and derivative securities registration document schedule for securities with a denomination per unit at least EUR 100 0002. 2
23.	The issuer, the offeror and the person asking for admission to trading on a regulated market may choose to draw up a prospectus in accordance with the proportionate schedules set out in Annexes XXIII to XXIX instead of the schedules set out in Annexes I, III, IV, IX, X and XI as described in the second subparagraph provided that the respective conditions laid down in Articles 26a, 26b and 26c are fulfilled.
	Where the issuer, the offeror and the person asking for admission to trading on a regulated market makes that choice:
	(a)	the reference to Annex I in Annex XVIII shall be read as a reference to Annexes XXIII or XXV;
	(b)	the reference to Annex III in Annex XVIII shall be read as a reference to Annex XXIV;
	(c)	the reference to Annex IV in Annex XVIII shall be read as a reference to Annex XXVI;
	(d)	the reference to Annex IX in Annex XVIII shall be read as a reference to Annex XXVII;
	(e)	the reference to Annex X in Annex XVIII shall be read as a reference to Annex XXVIII;
	(f)	the reference to Annex XI in Annex XVIII shall be read as a reference to Annex XXIX.

Article 22 Minimum information to be included in a base prospectus and its related final terms
1.	A base prospectus shall be drawn up using one or a combination of schedules and building blocks provided for in this Regulation according to the combinations for various types of securities set out in Annex XVIII.2 2
	A base prospectus shall contain the information items required in Annexes I to XVII, Annex XX and Annexes XXIII to XXX depending on the type of issuer and securities involved. Competent authorities shall not require that a base prospectus contains information items which are not included in Annexes I to XVII, Annex XX or Annexes XXIII to XXX.3 2 2 3
	In order to ensure conformity with the obligation referred to in Article 5(1) of Directive 2003/71/EC, the competent authority of the home Member State, when approving a base prospectus in accordance with Article 13 of that Directive, may, on a case by case basis, require the information provided by the issuer, the offeror or the person asking for admission to trading on a regulated market to be completed for each of the information items.2 2
	2Where the issuer, the offeror or the person asking for the admission to trading on a regulated market is required to include a summary in a base prospectus, in accordance with Article 5(2) of Directive 2003/71/EC, the competent authority of the home Member State, when approving the base prospectus in accordance with Article 13 of that Directive, may, on a case-by-case basis, require certain information provided in the base prospectus to be included in the summary.
21a.	The base prospectus may contain options with regard to information categorised as Category A, Category B and Category C, required by the relevant securities note schedules and building blocks, and set out in Annex XX. The final terms shall determine which of these options is applicable to the individual issue, by referring to the relevant sections of the base prospectus or by replicating such information.
2.	The issuer, the offeror or the person asking for admission to trading on a regulated market may omit information items which are not known when the base prospectus is approved and which can only be determined at the time of the individual issue.
3.	The use of the combinations provided for in the table in Annex XVIII shall be mandatory when drawing up base prospectuses for the types of securities to which those combinations correspond according to this table. However, for securities not covered by those combinations further combinations may be used.
4.	The final terms attached to a base prospectus shall only contain the following:2 2
	2(a)	within the various securities notes schedules according to which the base prospectus is drawn up, the information items in Categories B and C listed in Annex XX. When an item is not applicable to a prospectus, the item shall appear in the final terms with the mention "not applicable;
	2(b)	on a voluntary basis, any “additional information” set out in Annex XXI;
	2(c)	any replication of, or reference to options already provided for in the base prospectus which are applicable to the individual issue.
	2The final terms shall not amend or replace any information in the base prospectus.
5.	In addition to the information items set out in the schedules and building blocks referred to in Articles 4 to 20 the following information shall be included in a base prospectus:
	(1)	indication on the information that will be included in the final terms;2
	2(1a)	a section containing a template, the "form of the final terms", which has to be filled out for each individual issue;
	(2)	the method of publication of the final terms; if the issuer is not in a position to determine, at the time of the approval of the prospectus, the method of publication of the final terms, an indication of how the public will be informed about which method will be used for the publication of the final terms;
	(3)	in the case of issues of non equity securities according to [PR 2.2.7R (1)], a general description of the programme.
6.	Only the following categories of securities may be contained in a base prospectus and its related final terms covering issues of various types of securities:
	(1)	asset backed securities;
	(2)	warrants falling under Article 17;
	(3)	non-equity securities provided for under [PR 2.2.7R (2)];
	(4)	all other non-equity securities including warrants with the exception of those mentioned in point (2).
	In drawing up a base prospectus the issuer, the offeror or the person asking for admission to trading on a regulated market shall clearly segregate the specific information on each of the different securities included in these categories.
7.	Where an event envisaged under [section 87G(1) of the Act (Supplementary prospectus)] occurs between the time that the base prospectus has been approved and the final closing of the offer of each issue of securities under the base prospectus or, as the case may be, the time that trading on a regulated market of those securities begins, the issuer, the offeror or the person asking for admission to trading on a regulated market shall publish a supplement prior to the final closing of the offer or the admission of those securities to trading.
	2Where the issuer needs to prepare a supplement concerning information in the base prospectus that relates to only one or several specific issues, the right of investors to withdraw their acceptances pursuant to Article 16(2) of Directive 2003/71/EC shall only apply to the relevant issues and not to any other issues of securities under the base prospectus.

2[Note: See transitional provisions in Regulation (EU) No 862/2012]3

5

Article 23 Adaptations to the minimum information given in prospectuses and base prospectuses
1.	Notwithstanding Articles 3 second paragraph and 22(1) second subparagraph, where the issuer’s activities fall under one of the categories included in Annex XIX, the [FCA], taking into consideration the specific nature of the activities involved, may ask for adapted information, in addition to the information items included in the schedules and building blocks set out in 4 to 20, including, where appropriate, a valuation or other expert’s report on the assets of the issuer, in order to comply with the obligation referred to in [sections 87A(2),(3) and (4) of the Act]. The [FCA] shall forthwith inform the Commission thereof.
	In order to obtain the inclusion of a new category in Annex XIX a Member State shall notify its request to the Commission. The Commission shall update this list following the Committee procedure provided for in Article 24 of [the prospectus directive].
2.	By way of derogation of Articles 3 to 22, where an issuer, an offeror or a person asking for admission to trading on a regulated market applies for approval of a prospectus or a base prospectus for a security which is not the same but comparable to the various types of securities mentioned in the table of combinations set out in Annex XVIII, the issuer, the offeror or the person asking for admission to trading on a regulated market shall add the relevant information items from another securities note schedule provided for in Articles 4 to 20 to the main securities note schedule chosen. This addition shall be done in accordance with the main characteristics of the securities being offered to the public or admitted to trading on a regulated market.
3.	By way of derogation of Articles 3 to 22, where an issuer, an offeror or a person asking for admission to trading on a regulated market applies for approval of a prospectus or a base prospectus for a new type of security, the issuer, the offeror or the person asking for admission to trading on a regulated market shall notify a draft prospectus or base prospectus to the [FCA].
	The [FCA] shall decide, in consultation with the issuer, the offeror or the person asking for admission to trading on a regulated market, what information shall be included in the prospectus or base prospectus in order to comply with the obligation referred to in [sections 87A(2),(3) and (4) of the Act]. The [FCA] shall forthwith inform the Commission thereof.
	The derogation referred to in the first subparagraph shall only apply in case of a new type of security which has features completely different from the various types of securities mentioned in Annex XVIII, if the characteristics of this new security are such that a combination of the different information items referred to in the schedules and building blocks provided for in Articles 4 to 20 is not pertinent.
4.	By way of derogation of Articles 3 to 22, in the cases where one of the information items required in one of the schedules or building blocks referred to in 4 to 20 or equivalent information is not pertinent to the issuer, to the offer or to the securities to which the prospectus relates, that information may be omitted.

3

FEES 1.1.2R28/02/2014

This manual applies in the following way:(1) FEES 1, 2 and 3 apply to the fee payers listed in column 1 of the Table of application, notification and vetting fees in FEES 3.2.7 R. and FEES 3.2.7A R.5010(a) [deleted]1010(b) [deleted]1010(c) [deleted]1010(d) [deleted]1010(e) [deleted]10(f) [deleted]1010(g) [deleted]1010(h) [deleted]1010(i) [deleted]1010(j) [deleted]1010(k) [deleted]1010(l) [deleted]1010(m) [deleted]1010(n) [deleted]104(o) 3345410[deleted]10(p) 55410[deleted]10(q)

TC App 6.1.1G01/04/2013

1Introduction
1.	An accredited body is a body appearing in the list of such bodies in the Glossary.1 1
2.	Information on accredited bodies, including guidance on the process for including an applicant body in the list, is set out below and the obligation to pay the application fee is set out in FEES 3.2.
3.	[deleted]1 1
Process for including a body in the list of accredited bodies
4.	In considering the compatibility of a proposed addition with the statutory objectives, the FCA will determine whether the applicant will, if accredited, contribute to securing an appropriate degree of protection for consumers having regard in particular to:
	(1)	the matters set out in paragraphs 10 to 20; and
	(2)	the rules and practices of the applicant.
5.	An application to the FCA to be added to the list of accredited bodies should set out how the applicant will satisfy the criteria in paragraphs 10 to 20. The application should be accompanied by a report from a suitable auditor which sets out its independent assessment of the applicant's ability to meet these criteria. An application form is available from the FCA upon request.
6.	When considering an application for accredited body status the FCA may:
	(1)	carry out any enquiries and request any further information that it considers appropriate, including consulting other regulators;
	(2)	ask the applicant or its specified representative to answer questions and explain any matter the FCA considers relevant to the application;
	(3)	take into account any information which the FCA considers appropriate to the application; and
	(4)	request that any information provided by the applicant or its specified representative is verified in such a manner as the FCA may specify.
7.	The FCA will confirm its decision in writing to the applicant.
8.	The FCA will enter into an agreement with the applicant or accredited body which will specify the requirements that the accredited body must meet. These will include the matters set out in paragraphs 10 to 20. Approval as an accredited body becomes effective only when the name of the applicant is added to the Glossary definition of accredited body.
9.	Paragraphs 10 to 20 set out the criteria which an applicant should meet to become an accredited body and which an accredited body should meet at all times.
Acting in the public interest and furthering the development of the profession
10.	The FCA will expect an accredited body to act in the public interest, to contribute to raising consumer confidence and professional standards in the retail investment advice market and to promoting the profession.
Carrying out effective verification services
11.	If independent verification of a retail investment adviser's professional standards has been carried out by an accredited body, the FCA will expect the accredited body to provide the retail investment adviser with evidence of that verification in a durable medium and in a form agreed by the FCA. This is referred to in this Appendix and TC 2.1.28 R as a 'statement of professional standing'.
12.	The FCA will expect an accredited body to have in place effective procedures for carrying out its verification activities. These should include:
	(1)	verifying that each retail investment adviser who is a member of or subscriber to the accredited body's verification service has made an annual declaration in writing that the retail investment adviser has, in the preceding 12 months, complied with APER and completed the continuing professional development required under TC 2.1.15 R;1
	(2)	verifying annually the continuing professional development records of no less than 10% of the retail investment advisers who have used its service in the previous 12 months to ensure that the records are accurate and the continuing professional development completed by the retail investment advisers is appropriate; and
	(3)	verifying that, if required by TC, the retail investment advisers who use its services have attained an appropriate qualification. This should include, where relevant, checking that appropriate qualification gap-fill records have been completed by the retail investment advisers.
13.	The FCA will not expect an accredited body to carry out the verification in paragraph 12(3) if a retail investment adviser provides the accredited body with evidence in a durable medium which demonstrates that another accredited body has previously verified the retail investment adviser's appropriate qualification, including, where relevant, appropriate qualification gap-fill.
14.	The FCA will expect an accredited body to make it a contractual condition of membership (where a retail investment adviser is a member of the accredited body) or of using its verification service (where a retail investment adviser is not a member of the accredited body) that, as a minimum, the accredited body will not continue to verify a retail investment adviser's standards and will withdraw its statement of professional standing if the accredited body is provided with false information in relation to a retail investment adviser's qualifications or continuing professional development or a false declaration in relation to a retail investment adviser's compliance with APER. In this regard, an accredited body must have in place appropriate decision-making procedures with a suitable degree of independence and transparency.
Having appropriate systems and controls in place and providing evidence to the FCA of continuing effectiveness
15.	The FCA will expect an accredited body to ensure that it has adequate resources and systems and controls in place in relation to its role as an accredited body.
16.	The FCA will expect an accredited body to have effective procedures in place for the management of conflicts of interest and have a well-balanced governance structure with at least one member who is independent of the sector.
17.	The FCA will expect an accredited body to have a code of ethics and to ensure that its code of ethics and verification service terms and conditions do not contain any provisions that conflict with APER.
Ongoing cooperation with the FCA
18.	The FCA will expect an accredited body to provide the FCA with such documents and information as the FCA reasonably requires, and to cooperate with the FCA in an open and transparent manner.
19.	The FCA will expect an accredited body to share information with the FCA (subject to any legal constraints) in relation to the professional standards of the retail investment advisers who use its service as appropriate. Examples might include conduct issues, complaints, dishonestly obtaining or falsifying qualifications or continuing professional development or a failure to complete appropriate continuing professional development. The FCA will expect an accredited body to notify the firm if issues such as these arise.
20.	The FCA will expect an accredited body to submit to the FCA an annual report by a suitable independent auditor which sets out that auditor's assessment of the quality of the body's satisfaction of the criteria in paragraphs 10 to 19 in the preceding 12 months and whether, in the auditor's view, the body is capable of satisfying the criteria in the subsequent 12 months. The FCA will expect this annual report to be submitted to the FCA within three months of the anniversary of the date on which the accredited body was added to the Glossary definition of accredited body.
Withdrawal of accreditation
21.	If an accredited body fails or, in the FCA's view, is likely to fail to satisfy the criteria, the FCA will discuss this with the accredited body concerned. If, following a period of discussion, the accredited body has failed to take appropriate corrective action to ensure that it satisfies and will continue to satisfy the criteria, the FCA will withdraw the accredited body's accreditation by removing its name from the list of accredited bodies published in the Glossary. The FCA will expect the body to notify each retail investment adviser holding a current statement of professional standing of the FCA's decision. A statement of professional standing issued by the accredited body before the withdrawal of accreditation will continue to be valid until its expiration.

CREDS 10.1.3G01/04/2013

Module	Relevance to Credit Unions
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 all12 credit unions. In applying the Principles to credit unions, the appropriate regulator 12 will be mindful of proportionality. In practice, the implications are likely to vary according to the size of the credit union. 12 12 12
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 regulator 12 of its powers. 12 12
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 regulator 12, 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. 12
The Fit and Proper test for Approved Persons (FIT)	The purpose of FIT is to set out and describe the criteria that the appropriate regulator 12 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. 12
General Provisions (GEN)	GEN contains rules and guidance on general matters, including interpreting the Handbook, statutory status disclosure, the appropriate regulator's 12 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's 12 approach to supervision), SUP 2 (Information gathering by the appropriate regulator 12 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 regulator 12) 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 regulator 12 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. 12 12 12 12 12
Decision, Procedure and Penalties manual (DEPP)	DEPP is relevant to credit unions because it sets out: (1) the FCA's 12 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's 12 policy with respect to the imposition and amount of penalties under the Act (see DEPP 6). 12 12
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's 12 approach to exercising the main enforcement powers given to it by the Act and by regulation 12 of the Unfair Terms Regulations. 12
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.

COLL 6.3.6G01/04/2013

Table: This table belongs to COLL 6.3.2 G (2) (a) and COLL 6.3.3 R (Valuation)1.

Valuation and pricing
1	The valuation of scheme property
	(1)	Where possible, investments should be valued using a reputable source. The reliability of the source of prices should be kept under regular review.
	(2)	For some or all of the investments comprising the scheme property, different prices may quoted according to whether they are being bought (offer prices) or sold (bid prices). The valuation of a single-priced authorised fund should reflect the mid-market value of such investments. In the case of a dual-priced authorised fund, the issue basis of the valuation will be carried out by reference to the offer prices of investments and the cancellation basis by reference to the bid prices of those same investments. The prospectus should explain how investments will be valued for which a single price is quoted for both buying and selling.1 1
	3(2A)	Schemes investing in approved money-market instruments 5should value such instruments on an amortised cost basis on condition that:5 the approved money-market instrument has a residual maturity of less than three months and has no specific sensitivity to market parameters, including credit risk; or5 the scheme is a qualifying money market fund.5 5 5
	[Note:CESR's UCITS eligible assets guidelines with respect to article 4(2) of the UCITS eligible assets Directive]
	(2B)	Short-term money market funds may value approved money-market instruments on an amortised cost basis.7
	[Note: paragraph 21 of CESR's guidelines on a common definition of European money market funds]7
	(3)	Any part of the scheme property of an authorised fund that is not an investment should be valued at a fair value, but for immovables this is subject to COLL 5.6.20 R (3) (f) (Standing independent valuer and valuation).
	(4)	For the purposes of (2) and (3), any fiscal charges, commissions, professional fees or other charges that were paid, or would be payable on acquiring or disposing of the investment or other part of the scheme property should, in the case of a single-priced authorised fund,2 be excluded from the value of an investment or other part of the scheme property. In the case of a dual-priced authorised fund, any such payments should be added to the issue basis of the valuation, or subtracted from the cancellation basis of the valuation, as appropriate. Alternatively, the prospectus of a dual-priced authorised fund may prescribe any other method of calculating unit prices that ensures an equivalent treatment of the effect of these payments.2
	(5)	Where the authorised fund manager has reasonable grounds to believe that: no reliable price exists for a security 1 at a valuation point; or the most recent price available does not reflect the authorised fund manager's best estimate of the value of a security at the valuation point it should value an investment at a price which, in its opinion, reflects a fair and reasonable price for that investment (the fair value price);
	(6)	The circumstances which may give rise to a fair value price being used include: no recent trade in the security concerned; or the occurrence of a significant event since the most recent closure of the market where the price of the security is taken. In (b), a significant event is one that means the most recent price of a security or a basket of securities is materially different to the price that it is reasonably believed would exist at the valuation point had the relevant market been open.
	(7)	In determining whether to use such a fair value price , the authorised fund manager should include in his consideration: the type of authorised fund concerned; the securities involved; the basis and reliability of the alternative price1 used; and the authorised fund manager's policy on the valuation of scheme property as disclosed in the prospectus.
	4(7A)	Where the authorised fund manager, the depositary or the standing independent valuer have reasonable grounds to believe that the most recent valuation of an immovable does not reflect the current value of that immovable, the authorised fund manager should consult and agree with the standing independent valuer a fair and reasonable value for the immovable.
	(8)	The authorised fund manager should document the basis of valuation (including any fair value pricing policy) and, where appropriate, the basis of any methodology and ensure that the procedures are applied consistently and fairly.
	(9)	Where a unit price is determined using properly applied fair value prices in accordance with policies in (8), subsequent information that indicates the price should have been different from that calculated will not normally give rise to an instance of incorrect pricing.
2	The pricing controls of the authorised fund manager
	(1)	An authorised fund manager needs to be able to demonstrate that it has effective controls over its calculations of unit prices.
	(2)	The controls referred to in (1) should ensure that: asset prices are accurate and up to date; investment 1transactions are accurately and promptly reflected in valuations; the components of the valuation (including stock, cash, and units in issue 1), are regularly reconciled to their source or prime records and any reconciling items resolved promptly and debtors reviewed for recoverability; the sources of prices not obtained from the main pricing source are recorded and regularly reviewed; compliance with the investment and borrowing powers is regularly reviewed; dividends are accounted for as soon as securities 1 are quoted ex-dividend (unless it is prudent to account for them on receipt): fixed interest dividends, interest and expenses are accrued at each valuation point 1; tax positions are regularly reviewed and adjusted, if necessary; reasonable tolerances are set for movements in the key elements of a valuation and movements outside these tolerances are investigated;5 the fund manager regularly reviews the portfolio valuation for accuracy5; and5 the valuation of OTC derivatives is accurate and up to date and in compliance with the methods agreed with the depositary.5
	(3)	In exercising its pricing controls, the authorised fund manager may exercise reasonable discretion in determining the appropriate frequency of the operation of the controls and may choose a longer interval, if appropriate, given the level of activity on the authorised fund 1or the materiality of any effect on the price.
	(4)	Evidence of the exercise of the pricing controls should be retained.
	(5)	Evidence of persistent or repetitive errors in relation to these matters, and in particular any evidence of a pattern of errors working in an authorised fund manager's favour, will make demonstrating effective controls more difficult.
	(6)	Where the pricing 1function is delegated to a third party, COLL 6.6.15 R (1) (Committees and delegation) will apply.
3	The depositary's review of the authorised fund manager's systems and controls
	(1)	This section provides details of the types of checks a depositary should carry out to be satisfied that the authorised fund manager adopts systems and controls which are appropriate to ensure that prices of units are calculated in accordance with this section and to ensure that the likelihood of incorrect prices will be minimised. These checks also apply where an authorised fund manager has delegated all or some of its pricing 1 functions to one or more third parties5. 5
	(2)	A depositary should thoroughly review an authorised fund manager's systems and controls to confirm that they are satisfactory. The depositary's review should include an analysis of the controls in place to determine the extent to which reliance can be placed on them.
	(3)	A review should be performed when the depositary is appointed and thereafter as it feels appropriate given its knowledge of the robustness and the stability of the systems and controls and their operation.
	(4)	A review should be carried out more frequently where a depositary knows or suspects that an authorised fund manager's systems and controls are weak or are otherwise unsatisfactory.
	(5)	Additionally, a depositary should from time to time review other aspects of the valuation of the scheme property of each authorised fund for which it is responsible, verifying, on a sample basis, if necessary, the assets, liabilities, accruals, units in issue 1, securities prices (and in particular the prices of OTC derivatives,5unapproved securities and the basis for the valuation of unquoted securities) and any other relevant matters, for example an accumulation factor or a currency conversion factor.
	(6)	A depositary should ensure that any issues, which are identified in any such review, are properly followed up and resolved.
4	The recording and reporting of instances of incorrect pricing
	(1)	An authorised fund manager should record each instance where the price of a unit is incorrect as soon as the error is discovered, and report the fact to the depositary together with details of the action taken, or to be taken, to avoid repetition as soon as practicable.
	(2)	In accordance with COLL 6.6.11 G (Duty to inform the FCA), the depositary should report any breach of the rules in COLL 6.3 immediately to the FCA. However, notification should relate to instances which the depositary considers material only.
	(3)	A depositary should also report to the FCA immediately any instance of incorrect pricing 1where the error is 0.5% or more of the price of a unit, where a depositary believes that reimbursement or payment is inappropriate and should not be paid by an authorised fund manager.
	(4)	In accordance with SUP 16.6.8 R, a depositary should also make a return to the FCA on a quarterly basis which summarises the number of instances of incorrect pricing 1 during a particular period.
5	The rectification of pricing breaches
	(1)	COLL 6.6.3 R (1) (Functions of the authorised fund manager) places a duty on the authorised fund manager to take action to reimburse affected unitholders, former unitholders, and the scheme itself, for instances of incorrect pricing 1, except if it appears to the depositary that the breach is of minimal significance.
	(2)	A depositary may consider that the instance of incorrect pricing 1is of minimal significance if: the authorised fund manager and depositary meet the standards of control set out in Section 2 and Section 3 of this Table; and the error in pricing 1 of a unit is less than 0.5% of the correct price.
	(3)	In determining (2), if the instance of incorrect pricing 1 is due to one or more factors or exists over a period of time, each price should be considered separately.
	(4)	If a depositary deems it appropriate, it may, in spite of the circumstances outlined in (2), require a payment from the authorised fund manager or from the authorised fund to the unitholders, former unitholders, the authorised fund or the authorised fund manager (where appropriate).
	(5)	The depositary should satisfy itself that any payments required following an instance of incorrect pricing 1 are accurately and promptly calculated and paid.
	(6)	If a depositary considers that reimbursement or payment is inappropriate, it should report the matter to the FCA, together with its recommendation and justification. The depositary should take into account the need to avoid prejudice to the rights of unitholders, or the rights of unitholders in a class of units.
	(7)	It may not be practicable, or in some cases legally permissible, for the authorised fund manager to obtain reimbursement from unitholders, where the unitholders have benefited from the incorrect price.
	(8)	In all cases where reimbursement or payment is required, amounts due to be reimbursed to unitholders for individual sums which are reasonably considered by the authorised fund manager and depositary to be immaterial, need not normally be paid.

Related provisions for SUP 15.7.5A

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