Related provisions for BIPRU 12.4.11A
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In relation to the application of the client money rules (and any other rule in so far as it relates to matters covered by the client money rules) to the firms referred to in (1) and (2), the following is not client money:(1) any deposits within the meaning of the CRD held by a CRD credit institution; and[Note: article 13(8) of MiFID and article 18(1) of the MiFID Implementing Directive](2) any money held by an approved bank that is not a CRD credit institution in an account with
The effect of CASS 7.10.16 R is that, unless notified otherwise in accordance with CASS 7.10.20 R or CASS 7.10.22 R, clients of CRD credit institutions or approved banks that are not CRD credit institutions should expect that where they pass money to such firms in connection with designated investment business these sums will not be held as client money.
If a CRD credit institution or an approved bank that is not a CRD credit institution wishes to hold client money for a client (rather than hold the money in either of the ways described in CASS 7.10.16 R) it must, before providing designated investment business services to the client, disclose the following information to the client:(1) that the money held for that client in the course of or in connection with the business described under (2) is being held by the firm as client
A firm may not apply the second method in BIPRU 8.7.13R (3) (accounting consolidation for the whole group) or apply accounting consolidation to parts of its UK consolidation group or non-EEA sub-group under method three as described in BIPRU 8.7.13R (4)(a) for the purposes of the calculation of the consolidated market risk requirement unless the group or sub-group and the undertakings in that group or sub-group satisfy the conditions in this rule. Instead the firm must use the
A firm may calculate the risk capital requirement for an institution in the firm'sUK consolidation group or non-EEA sub-group that is an EEA firm in accordance with the CRD implementation measures in the EEA firm'sEEA State that correspond to the appropriate regulator'srules that would otherwise apply under this section if the institution is subject to those CRD implementation measures.
(1) This rule applies if:(a) a firm is applying an accounting consolidation approach to part of its UK consolidation group or non-EEA sub-group under method three as described in BIPRU 8.7.13R (4)(a); and(b) the part of the group in (a) constitutes the whole of a group subject to the consolidated capital requirements of a competent authority under the CRD implementation measures relating to consolidation under the Banking Consolidation Directive or the Capital Adequacy Directive.(2)
(1) Where the firm's rating systems are used on a unified basis under article 20(6) of the EU CRR, the FCA considers that the governance requirements in article 189 of the EU CRR can only be met if the subsidiaries have delegated to the governing body or designated committee of the EEA parent institution, EEA parent financial holding company or EEA parent mixed financial holding company responsibility for approval of the firm's rating systems.(2) The FCA expects an appropriate
Whether a third-country group is subject to equivalent supervision, whether it is subject to supervision by analogy or whether other alternative supervisory techniques apply, is decided in accordance with article 127 of CRD (Assessment of equivalence of third countries' consolidated supervision). (See article 150(1)(c) of the EU CRR.)
A firm which has a permission to use internal models in accordance with Part Three, Title IV, Chapter 5 of the EU CRR (Own funds requirements for market risk):(1) must identify any material risk, or risks that when considered in aggregate are material, which are not captured by those models; (2) must ensure that it holds own funds to cover those risk(s) in addition to those required to meet its own funds requirement calculated in accordance with Part Three, Title IV, Chapter 5
A significant IFPRU firm should consider developing internal specific risk assessment capacity and to increase use of internal models for calculating own funds requirements for specific risk of debt instruments in the trading book, together with internal models to calculate own funds requirements for default and migration risk where its exposures to specific risk are material in absolute terms and where it holds a large number of material positions in debt instruments of different
A UK firm, other than a UK pure reinsurer,4or a CRDcredit institution8 wishing to establish a branch in a particular EEA State for the first time under an EEA right other than under the auction regulation7 must submit a5notice of intention3in the form set out in SUP 13 Annex 1 R.5535(1) 5[deleted]5(2) 5[deleted]5
A UK firm wishing to provide cross border services into a particular EEA State for the first time under an EEA right other than under the auction regulation7 must submit a notice in the form set out in:535(1) SUP 13 Annex 2 R5if the UK firm is passporting under 3MiFID;5 or53(1A) SUP 13 Annex 3 R if the UK firm is passporting under the Insurance Directives; or5(2) SUP 13 Annex 4 R5if the UK firm is passporting under the 8CRD; or585(3) SUP 13 Annex 5 R5if the UK firm is passporting
A notice of intention3 (other than one to establish a branch or provide services in another EEA state under the auction regulation)7 may include activities within the scope of the relevant Single Market Directive which are not regulated activities (paragraphs 19(3) and 20(2) of Part III of Schedule 3 to the Act), although in the case of a MiFID investment firm a notice of intention may only include ancillary services which are to be carried on with one or more investment services
An EEA firm3(other than an EEA pure reinsurer or an EEA firm that received authorisation under article 18 of the auction regulation)31should note that the requirement under the Single Market Directives to give a notice of intention to provide cross border services applies whether or not:(1) it has established a branch in the United Kingdom; or(2) those cross border services are regulated activities.
(1) Before an EEA firm (other than an EEA pure reinsurer1 or an EEA firm that has received authorisation under article 18 of the auction regulation)3 exercises an EEA right to provide cross border services into the United Kingdom, the Act requires it to satisfy the service conditions, as set out in paragraph 14 of Part II of Schedule 3 to the Act. (2) For the purposes of paragraph 14(1)(b) of Part II of Schedule 3 to the Act, the information to be contained in the regulator's
This chapter applies to a UK firm, that is, a person whose head office is in the United Kingdom and which is entitled to carry on an activity in another EEA State subject to the conditions of a Single Market Directive. Such an entitlement is referred to in the Act as an EEA right and its exercise is referred to in the Handbook as passporting.1
This chapter also applies to a UK firm which wishes to establish a branch in, or provide cross border services into, Gibraltar. The Financial Services and Markets Act 2000 (Gibraltar) Order 2001 provides that a UK firm is to be treated as having an entitlement corresponding to its EEA right, to establish a branch in, or provide cross border services into, Gibraltar under any of the Single Market Directives. So, references in this chapter to an EEA State or an EEA right include
3(1) A firm must have robust governance arrangements, which include a clear organisational structure with well defined, transparent and consistent lines of responsibility, effective processes to identify, manage, monitor and report the risks it is or might be exposed to, and internal control mechanisms, including sound administrative and accounting procedures and effective control and safeguard arrangements for information processing systems.8(2) [deleted]1313[Note: article 74
For a common platform firm, the 3 arrangements, processes and mechanisms referred to in SYSC 4.1.1 R must be comprehensive and proportionate to the nature, scale and complexity of the risks inherent in the business model and of13SYSC 4.1.7 R, SYSC 5.1.7 R ,8SYSC 7 and(for a firm to which SYSC 19A applies)13SYSC 19A, or (for a full-scope UK AIFM) SYSC 19B12.8313[Note: article 74 (2) of CRD13]13
A common platform firm and a management company10 must establish, implement and maintain an adequate business continuity policy aimed at ensuring, in the case of an interruption to its systems and procedures, that any losses are limited, the preservation of essential data and functions, and the maintenance of its regulated activities, or, in the case of a management company, its collective portfolio management activities,10 or, where that is not possible, the timely recovery of
If the Part 4A permission of a firm contains a requirement obliging it to comply with this rule with respect to a third-country banking and investment group of which it is a member, it must comply, with respect to that third-country banking and investment group, with the rules in Part 2 of GENPRU 3 Annex 2, as adjusted by Part 3 of that annex.
The senior personnel of a common platform firm, a management company3, a full-scope UK AIFM,5 or of the UK branch of a non-EEA bank1must be of sufficiently good repute and sufficiently experienced as to ensure the sound and prudent management of the firm.[Note: article 9(1) of MiFID, article 7(1)(b) of the UCITS Directive3 article 8(1)(c) of AIFMD5, article 11(1) second paragraph of the Banking Consolidation Directive and article 13(1) of the CRD4]
A common platform firm, a management company, a full-scope UK AIFM53 and the UK branch of a non-EEA bank1must ensure that its management is undertaken by at least two persons meeting the requirements laid down in SYSC 4.2.1 R and, for a full-scope UK AIFM, SYSC 4.2.7 R5.[Note: article 9(4) first paragraph of MiFID, article 7(1)(b) of the UCITS Directive3, article 8(1)(c) of AIFMD5and article 13(1) of CRD]66
Schedule to the Recognition Requirements Regulations, Paragraph 7B
2(1) |
The [UK RIE] must make transparent and non-discriminatory rules, based on objective criteria, governing access to, or membership of, its facilities. |
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(2) |
In particular those rules must specify the obligations for users or members of its facilities arising from - |
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(a) |
the constitution and administration of the [UK RIE]; |
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(b) |
rules relating to transactions on the market; |
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(c) |
its professional standards for staff of any investment firm or credit institution having access to or membership of a financial market operated by the [UK RIE]; |
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(d) |
conditions established under sub-paragraph (3)(c) for access to or membership of a financial market operated by the [UK RIE] by persons other than investment firms or credit institutions; and |
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(e) |
the rules and procedures for clearing and settlement of transactions concluded on a financial market operated by the [UK RIE]. |
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(3) |
Rules of the [UK RIE] about access to, or membership of, a financial market operated by it must permit the [UK RIE] to give access to or admit to membership (as the case may be) only - |
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(a) |
an investment firm, |
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(b) |
a credit institution, or |
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(c) |
a person who - |
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(i) |
is fit and proper, |
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(ii) |
has a sufficient level of trading ability and competence, |
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(iii) |
where applicable, has adequate organisational arrangements, and |
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(iv) |
has sufficient resources for the role he is to perform, taking into account the [UK RIE's] arrangements under paragraph 4(2)(d). |
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(4) |
Rules under this paragraph must enable - |
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(a) |
an investment firm authorised under Article 5 of [MiFID], or |
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(b) |
a credit institution authorised under the Banking Consolidation Directive, |
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by the competent authority of another EEA State (including a branch established in the United Kingdom of such a firm or institution) to have direct or remote access to or membership of, any financial market operated by the [UK RIE] on the same terms as a UK firm. |
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(5) |
The [UK RIE] must make arrangements regularly to provide the [FCA]3 with a list of users or members of its facilities. 3 |
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(6) |
This paragraph is without prejudice to the generality of paragraph 4. |
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(1) The aim of the Remuneration Code is to ensure that firms have risk-focused remuneration policies, which are consistent with and promote effective risk management and do not expose them to excessive risk. It expands upon the general organisational requirements in SYSC 4.(2) The Remuneration Code implements the main provisions of the 3CRD which relate to remuneration. The Committee of European Banking Supervisors published Guidelines on Remuneration Policies and Practices on
The purpose of this appendix is to give guidance:(1) to UK firms on some of the issues that arise when carrying on passported activities1(see SUP App 3.5and SUP App 3.6);111(2) to all firms on the relationship between regulated activities and activities passported under the Single Market Directives (see SUP App 3.9and SUP App 3.101).11
(1) A firm must have appropriate procedures in place for its employees to report breaches internally through a specific, independent and autonomous channel.(2) The channel in (1) may be provided through arrangements provided for by social partners, subject to the Public Interest Disclosure Act 1998 and the Employment Rights Act 1996 to the extent that they apply.[Note: article 71(3) of CRD]
A firm that is a subsidiary must apply this chapter on a sub-consolidated basis if the firm, or the parent undertaking where it is a financial holding company or mixed financial holding company, have an institution or financial institution as a subsidiary in a third country or hold a participation in such an institution or financial institution. [Note: articles 129(1) (part) and 130(1) (part) of CRD]
(1) The condition referred to in IFPRU 10.7.1 R is that the firm is a small and medium-sized investment firm.(2) For this purpose, a firm is categorised as small and medium-sized in accordance with the European Commission Recommendation 2003/361/EC concerning the definition of micro, small and medium-sized enterprises.[Note: articles 129(4) and 130(4) of CRD]
If an incoming EEA firm, which is aCRD credit institution2, an IMD insurance intermediary or MiFID investment firm1, is a participant firm, the FSCS must give the firm such discount (if any) as is appropriate on the share of any levy it would otherwise be required to pay, taking account of the nature of the levy and the extent of the compensation coverage provided by the firm's Home State scheme.21
Where a UK firm is exercising an EEA right, other than under the Insurance Mediation Directive (see SUP 13.6.9A G) or the Reinsurance Directive (see SUP 13.6.9B R)8 or the CRD9, and has established a branch in another EEA State, any changes to the details of the branch are governed by the EEA Passport Rights Regulations. References to regulations in this section are to the EEA Passport Rights Regulations. A UK firm which is not an authorised person should note that, under regulation
If a UK firm has exercised an EEA right, under the CRD9 or the UCITS Directive, and established a branch in another EEA State, regulation 11(1) states that the UK firm must not make a change in the requisite details of the branch (see SUP 13 Annex 1), unless it has satisfied the requirements of regulation 11(2), or, where the change arises from circumstances beyond the UK firm's control, regulation 11(3) (see SUP 13.6.10 G).479