Related provisions for SUP 9.2.4
201 - 220 of 1077 items.
(1) The winding up of an ICVC may be carried out under this section instead of by the court provided the ICVC is solvent and the steps required under regulation 21 the OEIC Regulations (The Authority's approval for certain changes in respect of a company) are fulfilled. This section lays down the procedures to be followed and the obligations of the ACD and any other directors of the ICVC. (2) The termination of a sub-fund may be carried out4 under this section, instead of by the
This table belongs to COLL 7.3.1 G (4) (Explanation of COLL 7.3)3
3Summary of the main steps in winding up a solvent ICVC or terminating a sub-fund3 under FCArules, assuming FCA approval. Notes: N = Notice to be given to the FCA under regulation 21 of OEIC Regulations E = commencement of winding up or termination W/U = winding up FAP = final accounting period (COLL 7.3.8 R(4)) |
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Step number |
Explanation |
When |
COLL rule (unless stated otherwise) |
1 |
Commence preparation of solvency statement |
N-28 days |
7.3.5 (2) |
2 |
Send audited solvency statement to the FCA with copy to depositary |
By N + 21 days |
7.3.5 (4) and (5) |
3 |
Receive the FCA approval |
N + one month |
Regulation 21 of OEIC Regulations |
4 |
Normal business ceases; notify unitholders3 3 |
E |
7.3.6 |
5 |
Realise proceeds, wind up, instruct depositary accordingly |
ASAP after E |
7.3.7 |
6 |
Prepare final account or termination account & have account audited |
On completion of W/U or termination |
7.3.8 |
7 |
Send final account or termination account and auditor's report to the FCA & unitholders |
3 | 7.3.8(6) |
8 |
Request FCA to revoke relevant authorisation order or update its records4 |
On completion of W/U or termination4 |
7.3.7(9) |
(1) An ICVC must not be wound up except:44(a) under this section; or4(b) as an unregistered company under Part V of the Insolvency Act 1986.4(1A) 4A sub-fund must not:(a) be terminated except under this section; or(b) wound up except under Part V of the Insolvency Act 1986 (as modified by regulation 33C of the OEIC Regulations) as an unregistered company.(2) An ICVC must not be wound up or a sub-fund terminated4 under this section if there is a vacancy in the position of ACD.
(1) Before notice is given to the FCA under regulation 21 of the OEIC Regulations of the proposals referred to in COLL 7.3.4 R (3), the directors must make a full enquiry into the ICVC's or, in the case of termination of a sub-fund, the sub-fund's4 affairs, business and property4 to determine whether the ICVC or the sub-fund4 will be able to meet all its liabilities. (2) The ACD must then, based on the results of this enquiry, prepare a statement either: (a) confirming that the
(1) [deleted]44(2) The ACD must, as soon as practicable after winding up or termination has commenced, cause the scheme property to be realised and the liabilities of the ICVC or the sub-fund to be met out of the proceeds.(3) The ACD must instruct the depositary how such proceeds (until utilised to meet liabilities or make distributions to unitholders) must be held and those instructions must be prepared with a view to the prudent protection of creditors and unitholders against
(1) Once the ICVC's affairs are wound up or termination of the sub-fund has been completed (including distribution or provision for distribution in accordance with COLL 7.3.7 R (5)),3 the ACD must prepare an account of the winding up or termination showing: 3(a) how it has been conducted; and(b) how the scheme property has been disposed of. (2) The account in (1) must be, if there is: (a) more than one director, approved by the board of directors and be signed on their behalf
(1) If: (a) during the course, or as a result, of the enquiry referred to in COLL 7.3.5 R (1) (Solvency statement), the directors become of the opinion that it will not be possible to provide the confirmation referred to in (2)(a) of that rule; or(b) after winding up or termination has commenced, the ACD becomes of the opinion that the ICVC or the sub-fund4 will be unable to meet all its liabilities within twelve months of the date of the statement provided under (a) of COLL 7.3.5
There is a general concern that the practice of companies issuing statements and giving briefings may involve a financial promotion. These arise sometimes as a result of requirements imposed by a listing authority or an exchange or market, PERG 8.4.14 G offers guidance on when such statements or briefings may amount to or involve an inducement to engage in investment activity. It indicates that whilst statements of fact alone will not be inducements, there may be circumstances
PERG 8.21.4 G to PERG 8.21.21 G set out the FCA's views on the potential relevance of certain exemptions to company statements and briefings. The exemptions are referred to in the same order as the Financial Promotion Order. In the FCA's view, these exemptions (whether alone or, where applicable, in combination) should enable most statements and briefings which involve financial promotions to be made by the company concerned without the need for approval. In particular, the FCA
Article 59 is capable of applying to financial promotions in company statements and briefings where they are accompanied by:(1) the whole or any part of the annual accounts of the company (provided it is not an open-ended investment company); or(2) any report prepared and approved by the directors of such a company under sections 414A and 414D of the Companies Act 2006 (strategic reports) or sections 415 and 419 of that Act (directors’ reports), or4 corresponding legislation4
The reference to financial promotions which are permitted to be communicated relates, in the FCA's opinion, to something which is expressly permitted rather than simply not expressly prohibited. Article 67 itself does not specify any particular medium for communicating required or permitted material. So, it will be enough for the financial promotion to be part of a document which is itself required or permitted to be communicated (such as reports or financial statements). Market
Article 67 refers to an investment which is permitted to be traded or dealt in on a relevant market. In the FCA's opinion, this includes a situation where a class of securities is traded on a relevant market but the financial promotion relates to new securities of that class which have not yet themselves been issued or started trading. Where securities of that class have not yet been admitted to trading on a relevant market, article 68 may apply – see PERG 8.21.16 G.
In the FCA's opinion, companies whose securities are permitted to be traded or dealt in on a relevant market should be able to make good use of the article 69 exemption. But such companies will need to ensure that they meet the specific requirements in article 69(3). In very general terms, a financial promotion will comply with these requirements if:1(1) the only reason it is a financial promotion is that it contains or is accompanied by1 an inducement about certain investments
A requirement common to the exemptions in articles 59, 67 and 69 is that the financial promotions must not relate to investments other than those issued, or to be issued,1 by the company or a member of its group. The FCA is aware that there is concern about comments made in company statements or briefings. This is that they may be held to be inducements to acquire or dispose of, or exercise rights conferred by, an investment issued by a third party. For example, traded options
(1) Paragraph 9 of Schedule 4 of FSBRA and the 2015 Interchange Regulations applying FSBRA in a modified form allow3 the FCA to make rules requiring participants2 in regulated payment systems to pay the FCA specified amounts or amounts calculated in a specified way to:(a) meet the relevant costs referred to in (2) below; and (b) enable the PSR to maintain adequate reserves.(1A) The specified amount or amounts calculated in a specific way in (1) are PSR fees which are levied for
1The purpose of this section is to ensure that the FCA4 receives regular and comprehensive information about remuneration in a standard format to assist it to benchmark remuneration trends and practices and to collect remuneration information on high earners. It also takes account of the Capital Requirements Regulations 2013 (SI 2013/3115) together with the European Banking Authority's Guidelines to article 75(1) and (3) of the CRD4.1044
(1) 4A firm to which this rule applies must submit a Remuneration Benchmarking Information Report to the FCA annually.(2) The firm must complete the Remuneration Benchmarking Information Report in the format set out in SUP 16 Annex 33A.(3) The firm must submit the Remuneration Benchmarking Information Report to the FCA within four months of the firm'saccounting reference date.(4) A firm that:(a) is not part of a UK lead regulated group must complete that report on an unconsolidated
(1) A firm to which this rule applies must submit a High Earners Report to the FCA4 annually.104(2) The firm must submit that report to the FCA4 within four months of the end of the firm'saccounting reference date.104(3) A firm that is not part of a UK lead regulated group must complete that report on an unconsolidated basis in respect of remuneration awarded in the last completed financial year to all high earners of the firm who mainly undertook their professional activities
Some of these tools, for example
the use of public statements to deliver messages to firms or consumers of financial services, do not involve
the FCA in direct oversight
of the business of firms. In
contrast, other tools do involve a direct relationship with firms.
The FCA also has powers to
act on its own initiative to impose or vary individual requirements on
a firm (see SUP 7) and to ban or impose requirements in relation to
specific financial promotions. The FCA may
also
The FCA uses
a variety of tools to monitor whether a firm,
once authorised, remains in compliance
with regulatory requirements. These tools include (but are not limited to):(1) desk-based reviews;(2) liaison with other agencies or
regulators;(3) meetings with management and other
representatives of a firm;(4) on-site inspections;(5) reviews and analysis of periodic
returns and notifications;(6) reviews of past business;(7) transaction monitoring;(8) use of auditors; and(9) use
The FCA also
uses a variety of tools to address specific risks identified in firms. These tools include:(1) making recommendations for preventative
or remedial action;(2) giving other individual guidance to a firm;(3) imposing individual requirements; and(4) varying a firm'spermission in another way.
(1) A listed company in severe financial difficulty may find itself with no alternative but to dispose of a substantial part of its business within a short time frame to meet its ongoing working capital requirements or to reduce its liabilities. Due to time constraints it may not be able to prepare a circular and convene an extraordinary general meeting to obtain prior shareholder approval.(2) The FCA may modify the requirements in LR 10.5 to prepare a circular and to obtain shareholder
The following documents should be provided in writing to the FCA:(1) confirmation from the listed company that:(a) negotiation does not allow time for shareholder approval;(b) all alternative methods of financing have been exhausted and the only option remaining is to dispose of a substantial part of their business;(c) by taking the decision to dispose of part of the business to raise cash, the directors are acting in the best interests of the company and shareholders as a whole
An announcement should be notified to a RIS no later than the date the terms of the disposal are agreed and should contain:(1) all relevant information required to be notified under LR 10.4.1 R;(2) the name of the acquirer and the expected date of completion of the disposal;(3) full disclosure about the continuing groups prospects for at least the current financial year;(4) a statement that the directors believe that the disposal is in the best interests of the company and shareholders
(1) The FCA will wish to examine the documents referred to in LR 10.8.3 G (including the RIS announcement) before it grants the modification and before the announcement is released.(2) The documents should ordinarily be lodged with the FCA:(a) in draft form at least five clear business days before the terms of the transaction are agreed; and(b) in final form on the day on which approval is sought.
The Principles are a general statement of the fundamental obligations of firms under the regulatory system. This includes provisions which implement the Single Market Directives.5 They derive their authority from the appropriate regulator's rule-making powers as set out in the Act and reflect the statutory objectives.3
Principles 3 (Management and control), 4 (Financial prudence) and (in so far as it relates to disclosing to the appropriate regulator) 11 (Relations with regulators) take into account the activities of members of a firm's group. This does not mean that, for example, inadequacy of a group member's risk management systems or resources will automatically lead to a firm contravening Principle 3 or 4. Rather, the potential impact of a group member's activities (and, for example, risk
As set out in PRIN 3.3 (Where?), Principles 1 (Integrity), 2 (Skill, care and diligence) and 3 (Management and control) apply to world-wide activities in a prudential context. Principle 5 (Market conduct) applies to world-wide activities which might have a negative effect on confidence in the UK financial system8. In considering whether to take regulatory action under these Principles in relation to activities carried on outside the United Kingdom, the appropriate regulator will
Breaching a Principle makes a firm liable to disciplinary sanctions. In determining whether a Principle has been breached it is necessary to look to the standard of conduct required by the Principle in question. Under each of the Principles the onus will be on the appropriate regulator to show that a firm has been at fault in some way. What constitutes "fault" varies between different Principles. Under Principle 1 (Integrity), for example, the appropriate regulator would need
The Principles are also relevant to the FCA's15 powers of information-gathering, to vary a firm'sPart 4A permission,15 and of investigation and intervention, and provide a basis on which the FCA15 may apply to a court for an injunction or restitution order or require a firm to make restitution. However, the Principles do not give rise to actions for damages by a private person (see PRIN 3.4.4 R).151515
When making a decision on an application
for registration under the RCB Regulations,
or in relation to material changes to the contractual terms of the regulated covered bond, or in relation to
a change of owner, or when
seeking to use direction, revocation or penalty powers, the RCB
Regulations require the FCA to give the subject of the intended
action a warning notice and
a decision notice. The recipient
of a warning notice has the
right to make representations to the decision
Regulation 44 of the RCB Regulations (Warning notices and decision
notices) applies Part XXVI of the Act (Notices)
in respect of notices that we give under the RCB
Regulations. This means that the provisions of section 393
of the Act (Third party rights)
and section 394 of the Act (Access
to Authority material) apply to penalty procedures under the RCB Regulations and that, if the matter
is not referred to the Tribunal,
then upon taking the action to which a decision
notice relates,
Decisions on applications for registration,
in relation to material changes to contractual terms of the regulated
covered bond, or in relation to a change of owner, or decisions
to issue a direction under the RCB Regulations or
to revoke an issuer's registration,
will be taken under executive procedures following
the process set out in DEPP 4.
A request by an issuer for the listing of its securities to be suspended or cancelled must be in writing and must include:(1) the issuer's name;(2) details of the securities to which it relates and the RIEs on which they are traded;(3) a clear explanation of the background and reasons for the request;(4) the date on which the issuer requests the suspension or cancellation to take effect;(5) for a suspension, the time the issuer wants the suspension to take effect;(6) if relevant,
Cancellations will only be specified to take effect when the market opens on a specified day. An issuer should therefore ensure that all accompanying information has been provided to the FCA well before the date on which the issuer wishes the cancellation to take effect and at the very latest by 3 p.m. on the business day before it is to take effect. If the information is received after 3:00 p.m. on the day before the issuer wishes the cancellation to take effect, it will normally
(1) If an issuer requests the FCA to suspend or cancel the listing of its securities, it may withdraw its request at any time before the suspension or cancellation takes effect. The withdrawal request should initially be made by telephone and then confirmed in writing as soon as possible, with an explanation of the reasons for the withdrawal.(2) Even if an issuer withdraws its request, the FCA may still suspend or cancel the listing of the securities if it considers it is necessary
4If an issuer requests the FCA to suspend or cancel the listing of its securities under LR 5.3.1 R and the FCA agrees to do so, the notification given by the FCA to the issuer will include the following information: (1) the date on which the suspension or cancellation took effect or will take effect;(2) details of the suspension or cancellation; and (3) in relation to requests for suspension, details of the issuer's right to apply for the suspension of its listed securities to
(1) The FCA3 will determine a figure dependent on the seriousness of the market abuse and whether or not it was referable to the individual’s employment. This reflects the FCA's3 view that where an individual has been put into a position where he can commit market abuse because of his employment the fine imposed should reflect this by reference to the gross amount of all benefits derived from that employment.33(2) In cases where the market abuse was referable to the individual’s
(1) The FCA3 may increase or decrease the amount of the financial penalty arrived at after Step 2, but not including any amount to be disgorged as set out in Step 1, to take into account factors which aggravate or mitigate the market abuse. Any such adjustments will be made by way of a percentage adjustment to the figure determined at Step 2.3(2) The following list of factors may have the effect of aggravating or mitigating the market abuse:(a) the conduct of the individual in
(1) If the FCA3 considers the figure arrived at after Step 3 is insufficient to deter the individual who committed the market abuse, or others, from committing further or similar abuse then the FCA3 may increase the penalty. Circumstances where the FCA3 may do this include:333(a) where the FCA3 considers the absolute value of the penalty too small in relation to the market abuse to meet its objective of credible deterrence;3(b) where previous FCA3 action in respect of similar
The FCA3 and the individual on whom a penalty is to be imposed may seek to agree the amount of any financial penalty and other terms. In recognition of the benefits of such agreements, DEPP 6.7 provides that the amount of the financial penalty which might otherwise have been payable will be reduced to reflect the stage at which the FCA3 and the individual concerned reached an agreement. The settlement discount does not apply to the disgorgement of any benefit calculated at Step
Schedule to the Recognition Requirements Regulations, Paragraph 9A
1(1) |
[A UK RIE] operating a multilateral trading facility must also operate a regulated market. |
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(2) |
[A UK RIE] operating a multilateral trading facility must comply with those requirements of- |
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(a) |
Chapter I of Title II of [MiFID], and |
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(b) |
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which are applicable to a market operator ... operating such a facility. |
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(3) |
The requirements of this paragraph do not apply for the purposes of section 292(3)(a) of the Act (requirements for overseas investment exchanges and overseas clearing houses). |
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1In determining whether a UK RIE operating a multilateral trading facility complies with those requirements of Chapter I of Title II of MiFID and the MiFID implementing Directive which are applicable to a market operator operating such a facility, the FCA2 will have regard to the compliance of the UK RIE with equivalent recognition requirements.2
GEN 6.1.4A R,2GEN 6.1.5 R and GEN 6.1.6 R do not prevent a firm or member from entering into, arranging, claiming on or making any payment under a contract of insurance which indemnifies any person against all or part of the costs of defending FCA3 enforcement action or any costs they may be ordered to pay to the FCA3 .5555
1The reports of transactions in financial instrument shall be made in an electronic form except under exceptional circumstances, when they may be made in a medium which allows for the storing of the information in a way accessible for future reference by the competent authorities other than an electronic form, and the methods by which those reports are made shall satisfy the following conditions: |
|
(a) |
they ensure the safety and confidentiality of the data reported; |
(b) |
they incorporate mechanisms for identifying and correcting errors in a transaction report; |
(c) |
they incorporate mechanisms for authenticating the source of the transaction report; |
(d) |
they include appropriate precautionary measures to enable the timely resumption of reporting in the case of system failure; |
(e) |
they are capable of reporting the information required under Article 13 of the MiFID Regulation in the format specified in SUP 17 Annex 1 EU required by the FCA and in accordance with this paragraph, within the time-limits set out in SUP 17.2.7 R. |
[Note: article 12(1) of the MiFID Regulation] |
|
1A trade matching or reporting system shall be approved by the FCA for the purposes of Article 25(5) of MiFID if the arrangements for reporting transactions established by that system comply with SUP 17.3.1EU and are subject to monitoring by a competent authority in respect of their continuing compliance. |
[Note: article 12(2) of the MiFID Regulation] |
A firm is required to provide the FCA2 with a wide range of information to enable the FCA2 to meet its responsibilities for monitoring the firm's compliance with requirements imposed by or under the Act. Some of this information is provided through regular reports, including those set out in SUP 16 (Reporting requirements) and SUP 17 (Transaction reporting). In addition, other chapters in the Handbook set out specific notification and reporting requirements. Principle 11 includes
3SUP 15.11 (Notification of COCON breaches and disciplinary action) provides rules and guidance on notifications to the FCA by a relevant authorised person where the relevant authorised person4 takes disciplinary action in relation to any conduct rules staff and the reason for taking that action is a reason specified in rules made by the FCA. This is a requirement imposed4 under section4 64C of the Act.
Unless otherwise stated in the notification rule, a written notification required from a recognised body under any notification rule must be:(1) given to, or addressed for the attention of, the recognised body's usual supervisory contact at the FCA;11(2) delivered to the FCA1 by one of the methods in REC 3.2.3 R.1
Methods of notification
Method of delivery |
|
(1) |
Post to the address in REC 3.2.4 R |
(2) |
Leaving the notification at the address in REC 3.2.4 R and obtaining a time-stamped receipt |
(3) |
Electronic mail to an address for the recognised body's usual supervisory contact at the FCA1 and obtaining an electronic confirmation of receipt 1 |
(4) |
Hand delivery to the recognised body's usual supervisory contact at the FCA1 1 |
(5) |
Fax to a fax number for the recognised body's usual supervisory contact at the FCA,1provided that the FCA1 receives a copy of the notification by one of methods (1) - (4) in this table within five business days after the date of the faxed notification 11 |
If a notification rule requires notification within a specified period:(1) the recognised body must give the notification so as to be received by the FCA1 no later than the end of that period; and 1(2) if the end of that period falls on a day which is not a business day, the notification must be given so as to be received by the FCA1 no later than the first business day after the end of that period.1
Paragraph 12(1) of Part 2 of Schedule 1A to the Act enables the FCA to make rules requiring certain2authorised persons or payment service providers or electronic money issuers2 to pay to the FCA specified amounts or amounts calculated in a specified way in order to meet a proportion of:22(1) the expenses incurred by the FCA in establishing the CFEB, whenever these were incurred; and(2) the expenses incurred, or expected to be incurred, by the CFEB in connection with the discharge
(1) Given the complexity of issues raised by passporting, UK firms are advised to consult legislation and also to obtain legal advice at earliest opportunity. Firms are encouraged to contact their usual supervisory contact at the appropriate UK regulator5 to discuss their proposals. However, a UK firm which is seeking guidance on procedural or notification issues relating to passporting should contact the FCA and PRA authorisations teams, as and where appropriate.555(2) An applicant
The Society must, as soon as it is practical to do so, notify the FCA2of its intention to make any amendment which may alter the meaning or effect of any byelaw, including:2(1) any Lloyd's trust deed;(2) any standard form letter of credit prescribed by the Society from time to time; or(3) any standard form guarantee agreement prescribed by the Society from time to time.
The information provided to the 2FCA2by the Society under INSPRU 8.2.25 R must include:(1) a statement of the purpose of any proposed amendment or new Lloyd's trust deed and the expected impact, if any, on policyholders, managing agents, members, and potential members; and(2) a description of the consultation undertaken under INSPRU 8.2.26 R including a summary of any significant responses to that consultation.