Related provisions for GEN 7.1.1
1 - 20 of 161 items.
Section 19 of the Act (The general prohibition) provides that the requirement to be authorised under the Act only applies in relation to regulated activities which are carried on 'in the United Kingdom'. In many cases, it will be quite straightforward to identify where an activity is carried on. But when there is a cross-border element, for example because a borrower is outside the United Kingdom or because some other element of the activity happens outside the United Kingdom,
Even if a person concludes that he is not carrying on a regulated activity in the United Kingdom, he will need to ensure that he does not contravene other provisions of the Act that apply to unauthorised persons. These include the controls on financial promotion (section 21 (Financial promotion) of the Act) (see PERG 8 (Financial promotion and related activities)), and on giving the impression that a person is authorised (section 24 (False claims to be authorised or exempt)).
Section 418 of the Act deals with the carrying on of regulated activities in the United Kingdom. It extends the meaning that 'carry on a regulated activity in the United Kingdom' would ordinarily have by setting out additional cases. The Act states that in these cases a person who is carrying on a regulated activity but would not otherwise be regarded as carrying on the activity in the United Kingdom is, for the purposes of the Act, to be regarded as carrying on the activity in
For the purposes of regulated mortgage activities, sections 418(2), (4), (5), (5A) and (6) are relevant, as follows:(1) Section 418(2) refers to a case where a UK-based person carries on a regulated activity in another EEA State in the exercise of rights under a Single Market Directive. The only Single Market Directive which is relevant to mortgages is theCRD3.3(2) Section 418(4) refers to the case where a UK-based person carries on a regulated activity and the day-to-day management
The exclusions in article 72(5A) to (5F) of the Regulated Activities Order (Overseas persons) provide that an overseas person does not carry on the regulated activities of:(1) arranging (bringing about) or making arrangements with view to a regulated mortgage contract;(2) entering into a regulated mortgage contract; or(3) administering a regulated mortgage contract;of the borrower (and each of them, if more than one) is an individual and is normally resident overseas. In the case
Simplified summary of the territorial scope of the regulated mortgage activities, to be read in conjunction with the rest of this section.
This table belongs to PERG 4.11.8 G
Individual borrower resident and located: |
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in the UK |
outside the UK |
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Service provider carrying on regulated activity from establishment: |
in the UK |
Yes |
Yes |
outside the UK |
Yes |
No |
|
Yes = authorisation or exemption required No = authorisation or exemption not required |
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Where a person is carrying on any of the regulated mortgage activities from an establishment maintained by him in the United Kingdom, that person will be 'carrying on a regulated activity in the United Kingdom'. The location and residence of the borrower is irrelevant. That is the practical effect of sections 418(4), (5) and (6) of the Act.
There may also be situations where a lender, who does not maintain an establishment in the United Kingdom, provides services in the United Kingdom. For instance, a lender might attend a property exhibition in the United Kingdom at which he sets up a loan with a borrower. A lender might also attend the offices of its UK-based lawyers, or appoint them as its agent, to enter into a contract with a borrower. In these cases, the overseas lender would only be carrying on a regulated
If a service provider is overseas, the question of whether that person is carrying on a regulated activity in the United Kingdom will depend upon:(1) the type of regulated activity being carried on;(2) section 418 of the Act;(3) the residence and location of the borrower;(4) the application of the overseas persons exclusion in article 72(5A) to (5F) of the Regulated Activities Order; and(5) whether the service provider is carrying on an electronic commerce activity.The factors
When a person is arranging (bringing about) regulated mortgage contracts or making arrangements with a view to regulated mortgage contracts from overseas, the question of whether he will be carrying on regulated activities in the United Kingdom will depend on the relevant circumstances. In the FCA's view, factors to consider include:(1) the territorial limitation in the definition of regulated mortgage contract so that regulation only applies if the land is in the United Kingdom;(2)
In the FCA's view:(1) if the borrower is normally resident in the United Kingdom, the clear territorial limitation in the definition of regulated mortgage contract carries most weight in determining where regulation should apply; it is likely that the arranger will be carrying on regulated activities in the United Kingdom;(2) if the borrower is normally resident overseas, the arrangements are excluded by the overseas persons exclusion.In the case of arranging (bringing about)
In the FCA's view, advising on regulated mortgage contracts is carried on where the borrower receives the advice. Accordingly:(1) if the borrower is located in the United Kingdom, a person advising that borrower on regulated mortgage contracts is carrying on a regulated activity in the United Kingdom; but(2) if the service provider and borrower are both located overseas, the regulated activity is not carried on in the United Kingdom.
Only the following FCA controlled functions apply to an overseas firm which maintains an establishment in the United Kingdom from which regulated activities are carried on:(1) the director function where the person performing that function:(a) has responsibility for the regulated activities of a UKbranch which are likely to enable him to exercise significant influence over that branch; or(b) is someone whose decisions or actions are regularly taken into account by the governing
An incoming EEA firm will have to consider, for example, the position of a branchmanager based in the United Kingdom who may also be performing a function in relation to the carrying on of a regulated activity not covered by the EEA right of the firm. In so far as the function is within the description of an FCA controlled function, the firm will need to seek approval for that person to perform that FCA controlled function.
1MAR 8.2.3 R says that the obligation on a benchmark submitter to appoint a benchmark manager applies if it maintains an establishment in the United Kingdom. Therefore, SUP 10A applies to the benchmark submission function whether or not the activity of providing information in relation to a specified benchmark (or any other regulated activity) or the benchmark submission function are carried on from that establishment.
The exclusions apply where the regulated activity is carried out in the course of a profession or business which does not otherwise consist of the carrying on of regulated activities in the United Kingdom. However, activities are only excluded to the extent that they may reasonably be regarded as a necessary part of the other services provided in the course of the profession or business. The exclusion does not apply if separate remuneration is received in respect of any regulated
An overseasperson is defined as a person who carries on what would be regulated activities (including any activity that would otherwise be excluded from being a regulated activity by virtue of the exclusions for overseas persons referred to in PERG 2.9.15 G) but who does not do so, or offer to do so, from a permanent place of business maintained by him in the United Kingdom. Where a person does not have a permanent place of business in the United Kingdom, he will not, in any event,
The exclusions are available, for regulated activities other than those that relate to home finance transactions4 in the two broad cases set out below. For some of these regulated activities, the exclusions apply in each case. In others, they apply in only one.4(1) The first case is where the nature of the regulated activity requires the direct involvement of another person and that person is authorised or exempt (and acting within the scope of his exemption). For example, this
(1) In accordance with article 3(2) of the E-Commerce Directive, all requirements on persons providing electronic commerce activities into the United Kingdom from the EEA are lifted, where these fall within the co-ordinated field and would restrict the freedom of such a firm to provide services. The coordinated field includes any requirement of a general or specific nature concerning the taking up or pursuit of electronic commerce activities. Authorisation requirements fall within
(1) Any firm permitted to 5carry5 on any of the activities within each of the RAGs set out in column (1) of the table in SUP 16.12.4 R must:(a) (i) unless (ii) or (iii) 11applies, submit to the appropriate regulator96 the duly completed data items or other items applicable to the firm as set out in the provision referred to in column (2) of that table;96(ii) unless (iii) applies, where 11 a firm is required to submit completed data items for 11more than one RAG, that11firm must
Table of applicable rules containing data items4, frequency and submission periods
(1) |
(2) |
(3) |
(4) |
|
RAGnumber |
Provisions containing: |
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applicabledata items |
reporting frequency/ period |
due date32 32 |
||
RAG 1 |
• accepting deposits • meeting of repayment claims12 • managing dormant account funds (including the investment of such funds)12 27 |
SUP 16.12.5 R, except FSA001 and FSA002 on consolidated basis for FINREP firms37 |
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RAG 2.1 |
• effecting contracts of insurance • carrying out contracts of insurance • entering as provider into a funeral plan contract |
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RAG 2.2 |
• managing the underwriting capacity of a Lloyds syndicate as a managing agent at Lloyds • advising on syndicate participation at Lloyds • arranging deals in contracts of insurance written at Lloyds |
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RAG 3 |
• dealing in investment as principal • dealing in investments as agent • advising on investments (excluding retail investment activities) • arranging (bringing about) deals in investments (excluding retail investment activities) |
SUP 16.12.11 R or SUP 16.12.11B R for UK designated investment firms37except FSA001 and FSA002 on consolidated basis for FINREP firms37 |
SUP 16.12.10 R2SUP 16.12.12 R or SUP 16.12.12A R for UK designated investment firms37 |
|
RAG 4 |
• managing investments • establishing, operating or winding up a collective investment scheme • establishing, operating or winding up a stakeholder pension scheme • establishing, operating or winding up a personal pension scheme2 • operating an electronic system in relation to lending (FCA-authorised persons only)48 3838 |
SUP 16.12.15 R or SUP 16.12.15B R for UK designated investment firms37, except FSA001 and FSA002 on consolidated basis for FINREP firms37 |
SUP 16.12.14 R2SUP 16.12.16 R or SUP 16.12.16A R for UK designated investment firm37 |
|
RAG 5 |
• home finance administration or home finance providing activity11 11 |
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RAG 6 |
• safeguarding and administration of assets (without arranging) • arranging safeguarding and administration of assets • acting as trustee or depositary of an AIF38 • acting as trustee or depositary of a UCITS38 384038 |
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RAG 7 |
• retail investment activities • advising on pensions transfers & opt-outs • arranging (bringing about deals) in retail investments |
SUP 16.12.22A R or SUP 16.12.22C R for UK designated investment firms37, except FSA001 and FSA002 on consolidated basis for FINREP firms37 |
SUP 16.12.23A R and37SUP 16.12.23 R for UK designated investment firms37 |
|
RAG 8 |
• making arrangements with a view to transactions in investments • operating a multilateral trading facility4 |
SUP 16.12.25A R or SUP 16.12.25C R for UK designated investment firms37except FSA001 and FSA002 on consolidated basis for FINREP firm37 |
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RAG 9 |
• home finance mediation activity14 • insurance mediation activity (non-investment insurance contracts) 14 |
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RAG 10 |
96 | |||
[FCA] |
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Section 19 of the Act (The general prohibition) provides that the requirement to be authorised under the Act only applies in relation to regulated activities which are carried on 'in the United Kingdom'. In many cases, it will be quite straightforward to identify where an activity is carried on. But, when there is a cross-border element, for example because a customer is outside the United Kingdom or because some other element of the activity happens outside the United Kingdom,
Even if a person concludes that he is not carrying on a regulated activity in the United Kingdom, he will need to ensure that he does not contravene other provisions of the Act that apply to unauthorised persons. These include the controls on financial promotion (section 21 (Financial promotion) of the Act) (see PERG 8 (Financial promotion and related activities)), and on giving the impression that a person is authorised (section 24 (False claims to be authorised or exempt)).
Persons carrying on insurance mediation activities from a registered office or head office in the United Kingdom will clearly be carrying on regulated activities in the United Kingdom. However, a person may be considered to be carrying on regulated activities in the United Kingdom even where not carrying on the activity from a registered office or head office in the United Kingdom. This is explained further in PERG 5.12.6 G to PERG 5.12.8 G.
Section 418 of the Act extends the meaning that 'carry on regulated activity in the United Kingdom' would normally have by setting out additional cases in which a person who would not otherwise be regarded as carrying on the activity in the United Kingdom is to be regarded as doing so. Each of the following cases thus amounts to carrying on a regulated activity in the United Kingdom:(1) where a UK-based person carries on a regulated activity in another EEA State in the exercise
Article 72 of the Regulated Activities Order (Overseas persons) provides a potential exclusion for persons with no permanent place of business in the United Kingdom from which regulated activities are conducted or offers to conduct regulated activities are made. Where these persons carry on insurance mediation activities in the United Kingdom, they may be able to take advantage of the exclusions in article 72 of the Regulated Activities Order. In general terms, these apply where
Non-UK-based persons wishing to carry on insurance mediation activities in the United Kingdom must:(1) qualify for authorisation by exercising passport rights (see section 31 (Authorised persons) and schedule 3 (EEA passport rights) to the Act and PERG 5.12.13 G to PERG 5.12.14 G (Passporting)); or(2) make use of the overseas persons exclusion (which then has the effect that activities are deemed not to be regulated activities carried on in the United Kingdom); or(3) seek Part
15A credit agreement is an exempt agreement17 in the following cases:(1) if it is a regulated mortgage contract or a home purchase plan;(2) if: (a) the lender provides the borrower with credit exceeding £25,000; and(b) the agreement is entered into by the borrower wholly or predominantly for the purposes of a business carried on, or intended to be carried on, by the borrower;(3) if: (a) the lender provides the borrower with credit of £25,000 or less; and(b) the agreement is entered
So, the effect of App 3.12.1 is that an insurer may be carrying on insurance business in the United Kingdom which is to be treated as a regulated activity under article 10 to the Regulated Activities Order (Effecting and carrying out contracts of insurance) in circumstances where the risks covered are treated as located in another EEA State. In that event, the insurer is required by Schedule 3 to the Act to passport into the State concerned and may be subject to conduct of business
An insurer authorised in another EEA State who is insuring UK risks and so passports on a services basis under the Insurance Directives into the United Kingdom (see ), may not be carrying on a regulated activity in the United Kingdom. But, if it passports into the United Kingdom, it will qualify for authorisation under paragraph 12 of Schedule 3 to the Act (Firms qualifying for authorisation). Where this is the case, the insurer will be subject to conduct of business requirements
In addition to the requirements as to the business test and the link to the United Kingdom, two other essential elements must be present before a person needs authorisation under the Act. The first is that the investments must come within the scope of the system of regulation under the Act (see PERG 2.6). The second is that the activities, carried on in relation to those specified investments, are regulated under the Act (see PERG 2.7). Both investments and activities are defined
2The UK has exercised the optional exemption in article 3 of MiFID. Further information about this exemption is contained in Q48 to 53 in PERG 13.5. It is a requirement of article 3 MiFID that the activities of firms relying on the exemption are "regulated at national level". The investment services to which article 3 apply (namely reception and transmission of orders and investment advice in relation to either transferable securities or units in collective investment undertakings)
(1) 15A must be a fit and proper person having regard to all the circumstances, including-(a) A’s connection with any person;(b) the nature (including the complexity) of any regulated activity that A carries on or seeks to carry on;(c) the need to ensure that A’s affairs are conducted in an appropriate manner, having regard in particular to the interests of consumers and the integrity of the UK financial system;(d) whether A has complied and is complying with requirements imposed
(1) 15B must be a fit and proper person, having regard to the operational objectives of the FCA.(2) The matters which are relevant in determining whether B satisfies the condition in sub-paragraph (1) include-(a) B’s connection with any person;(b) the nature (including the complexity) of any regulated activity that B carries on or seeks to carry on;(c) the need to ensure that B’s affairs are conducted in an appropriate manner, having regard in particular to the interests of consumers
(1) [deleted]1515(2) The FCA15 will also take into consideration anything that could influence a firm's continuing ability to satisfy the threshold conditions set out in paragraphs 2E and 3D of Schedule 6 to the Act15. Examples include the firm's position within a UK or international group, information provided by overseas regulators about the firm, and the firm's plans to seek to vary its Part 4A permission15 to carry on additional regulated activities once it has been granted
Examples of the kind of particular considerations to which the FCA may have regard when assessing whether a firm will satisfy, and continue to satisfy, this threshold condition include, but are not limited to, whether:1515(1) the firm has been open and co-operative in all its dealings with the FCA15and any other regulatory body (see Principle 11 (Relations with regulators)) and is ready, willing and organised to comply with the requirements and standards under the regulatory system
Variation and cancellation of Part 4A permission and imposition, variation and cancellation of requirements. See SUP 6.2.3A G to SUP 6.2.3E G8
8Question |
Variation of Part 4A permission |
Cancellation of Part 4A permission |
Imposition, variation and cancellation of requirements |
What does the application apply to? |
Individual elements of a firm'sPart 4A permission. Variations may involve adding or removing categories of regulated activity or specified investments or varying or removing any limitations in the firm'sPart 4A permission. |
A firm's entire Part 4A permission and not individual elements within it. |
Any requirement imposed on a firm with a Part 4A permission. Requirements may involve requiring the firm concerned to take or refrain from taking a specified action. |
In what circumstances is it usually appropriate to make an application? |
If a firm: 1. wishes to change the regulated activities it carries on in the United Kingdom under a Part 4A permission (SUP 6.3); or 2. has the ultimate intention of ceasing carrying on regulated activities but due to the nature of those regulated activities (for example, accepting deposits, or insurance business) it will require a long term (normally over six months) to wind down (run off) its business (see SUP 6.2.8 G to SUP 6.2.11 G and SUP 6 Annex 4). |
If a firm: 1. has ceased to carry on all of the regulated activities for which it has Part 4A permission (SUP 6.4); or 2. wishes or expects to cease carrying on all of the regulated activities for which it has Part 4A permission in the short term (normally not more than six months). In this case, the firm may apply to cancel its Part 4A permission prior to ceasing the regulated activities (see SUP 6.4.3 G). |
If a firm: 1. wishes to have a new requirement imposed on it; or 2. wishes to vary or cancel an existing requirement imposed by the FCA or PRA (for example, if anything relating to the firm's individual circumstances change and any existing requirement should be varied or cancelled). |
Examples of where SUP 10A.6.8 R might apply include (but are not limited to):(1) a chairman of an audit committee of a parent undertaking or holding company of a UK firm where that audit committee is working for that UK firm (that is, functioning as the audit committee for the group); or(2) a director (other than a non-executive director) of a parent undertaking or holding company of a UK firm exercising significant influence by way of his involvement in taking decisions for that
Examples of where SUP 10A.6.13 R might apply include (but are not limited to):(1) an individual who is a non-executive director of a parent undertaking or holding company who takes an active role in the running of the business of a UK firm, for example, as a member of a board or committee (on audit or remuneration) of that firm; or(2) an individual who is a non-executive director of a parent undertaking or holding company having significant influence in setting and monitoring
In other circumstances, advice issued remotely may still be given in the United Kingdom. For example, the FCA considers that advice is given in the United Kingdom if:(1) it is contained in a non-UK periodical that is posted in hard copy to persons in the United Kingdom;(2) it is contained in a non-UK periodical (or given in or by way of a service) which is made available electronically to such persons.
But even if advice is given in the United Kingdom, the general prohibition will not be contravened if the giving of advice does not amount to the carrying on, in the United Kingdom, of the business of advising on investments or advising on a home finance transaction1. Also, the general prohibition will not be contravened if the exclusion for overseas persons in article 72 of the Regulated Activities Order (Overseas persons) applies. That exclusion applies in relation to the giving
If a person is carrying on the business of advising on investments or advising on a home finance transaction1in the United Kingdom, he will not require authorisation if:(1) he is able to rely on an exclusion; in addition to the exclusions already mentioned (in articles 54 and 72 of the Regulated Activities Order), other exclusions that may be relevant are in Chapter XVII of Part II of the Regulated Activities Order; or(2) he is an exempt person (see PERG 2.11 (What to do now?1));
Three9 exclusions apply10 to the regulated activity of accepting deposits. The first is that a10deposit taker providing its services as an electronic commerce activity from another EEA State into the United Kingdom (see PERG 2.9.18 G) does not carry on a regulated activity. The second relates to a firm with a Part 4A permission to manage an AIF or manage a UCITS (see PERG 2.9.22 G (Managers of UCITS and AIFs)).10 There is also excluded from accepting deposits any activity which
Section 418 of the Act (Carrying on regulated activities in the United Kingdom) takes this one step further. It extends the meaning that 'in the United Kingdom' would ordinarily have by setting out five additional cases. The Act states that, in these five cases, a person who is carrying on a regulated activity but who would not otherwise be regarded as carrying on the activity in the United Kingdom is, for the purposes of the Act, to be regarded as carrying on the activity in
A person who is based outside the United Kingdom but who sets up an establishment in the United Kingdom must therefore consider the following matters. First, he must not, unless he is authorised, carry on regulated activities in the United Kingdom. Second, unless he is authorised, the day-to-day management of the carrying on of the regulated activity must not be the responsibility of the UK establishment. This may, for example, affect those UK establishments that in the context
A person based outside the United Kingdom may also be carrying on activities in the United Kingdom even if he does not have a place of business maintained by him in the United Kingdom (for example, by means of the internet or other telecommunications system or by occasional visits). In that case, it will be relevant to consider whether what he is doing satisfies the business test as it applies in relation to the activities in question. In addition, he may be able to rely on the
There are a number of exemptions in the Financial Promotion Order relating to financial promotions sent into the United Kingdom by an overseas communicator who does not carry on certain controlled activities in the United Kingdom. These exemptions apply in addition to any other exemptions which may apply to any particular financial promotion by an overseas communicator.
Article 30 exempts any solicited real time financial promotion made by an overseas communicator in the course of or for the purposes of certain controlled activities which he carries on outside the United Kingdom. This enables an overseas communicator, for example, to respond to an unprompted telephone enquiry made by a person in the United Kingdom or an enquiry which follows a financial promotion made by the overseas communicator and which was approved by an authorised perso
This exemption allows a person in another EEA State who lawfully carries on a controlled activity in that State to promote into the United Kingdom. The terms of the exemption are that the promotion must comply with the rules inCOBS 45,9MCOB 3 or CONC 39 (as relevant). Care should be taken as any failure to satisfy any of the relevant requirements of these rules may mean that this exemption is not satisfied and that the financial promotion may breach section 21 if it has not been
To be a sophisticated investor for the purposes of article 50, the recipient of a financial promotion must have a current certificate from an authorised person stating that he has enough knowledge to be able to understand the risks associated with the description of investment to which the financial promotion relates. Where the financial promotion is an outgoing electronic commerce communication3, the certificate may be signed by a person who is entitled, under the law of an EEA
The exemption is subject to certain conditions. In broad terms, these are that the financial promotion must be accompanied by an indication:(1) that the directors or promoters of the company have taken all reasonable care to ensure that the financial promotion is true and not misleading;(2) that the directors or promoters have not limited their liability;(3) that any person who is in doubt about the investment should consult an authorised person; and(4) that:(a) the directors
(1) Under section 19 of the Act (The general prohibition), no person may carry on a regulated activity in the United Kingdom, or purport to do so, unless he is an authorised person, or he is an exempt person in relation to that activity.(2) A person will be an exempt person if he satisfies the conditions in section 39(1) of the Act, guidance on which is given in SUP 12.2.2 G. A person who is exempt as a result of satisfying these conditions is referred to in the Act as an appointed
(1) 15Under sections 20(1) and (1A) of the Act (Authorised persons acting without permission), if an authorised person carries on a regulated activity in the United Kingdom, or purports to do so, otherwise than in accordance with his permission, he is to be taken to have contravened a requirement imposed by the FCA (in the case of a FCA-authorised person) or the FCA and the PRA (in the case of a PRA-authorised person).(2) In addition, under section 23(1A) of the Act (Contravention
Any person who carries on a regulated activity in the United Kingdom by way of business must either be an authorised person or exempt from the need for authorisation. Otherwise, the person commits a criminal offence and certain agreements may be unenforceable. PERG 2.2 (Authorisation and regulated activities) has further guidance on these consequences.2
The United Kingdom's approach to implementing the IMD by domestic legislation is, in part, through secondary legislation, which will apply pre-existing regulated activities (slightly amended) in the Regulated Activities Order to the component elements of the insurance mediation definition in the IMD (see PERG 5.2.5 G and the text of article 2.3 IMD in PERG 5.16.2 G (article 2.3 of the Insurance Mediation Directive)).