Related provisions for CASS 1.5.3
1 - 20 of 108 items.
Persons subject to enforcement action may be prepared to agree the amount of any financial penalty, or the length of any period of suspension, restriction, condition,5 limitation or disciplinary prohibition5 (see DEPP 6A)4, and other conditions which the FCA seeks to impose by way of such action. These4 conditions might include, for example, the amount or mechanism for the payment of compensation to consumers. The FCA recognises the benefits of such agreements, as4 they offer
- (1)
Subject to DEPP 6.7.3G(4) a settlement discount is available only in cases where a settlement agreement (which may be a focused resolution agreement) is reached during the period from commencement of an investigation until the FCA has:6
33 - (2)
The communication of the FCA's3 assessment of the appropriate penalty for the purposes of DEPP 6.7.3G(1)(b)6 need not be in a prescribed form but will include an indication of the breaches alleged by the FCA3. It may include the provision of a draft warning notice.
33 - (3)
Subject to DEPP 6.7.3.G(4), in relation to any settlement agreement other than a focused resolution agreement the reduction in penalty will be as follows:6
- (4)
Where stage 1 has been started but no settlement agreement has been agreed before 1 March 2017:6
- (a)
if any agreement is reached to settle the case between the period from the end of stage 1 until the expiry of the period for making representations, or, if sooner, the date on which the representations are sent in response to the giving of a warning notice, there will be a reduction of 20% in the penalty; and6
- (b)
if any agreement is reached to settle the case between the expiry of the period of making representations, or, if sooner, the date on which representations are sent in response to the giving of a warning notice and the giving of a decision notice, there will be a reduction of 10% in the penalty.6
- (a)
6The reductions in penalty in cases involving a focused resolution agreement will be as follows.(1) Where agreement is reached in relation to all relevant facts and all issues as to whether those facts constitute a breach (or more than one breach):(a) 30% if the agreement is concluded during stage 1; and(b) 0% in any other case.(2) Where agreement is reached in relation to all relevant facts:(a) 15 to 30% if the agreement is concluded during stage 1; and(b) 0% in any other case.(3)
6Where DEPP 6.7.3AG specifies that the reduction will be within a range, the decision maker identified by DEPP 6.7.3BG will determine the appropriate figure within the range. Factors relevant to this determination may include:(1) the extent to which the position taken by the person subject to enforcement action on the disputed issues at the time the focused resolution agreement is entered into is reflected in the terms of the decision notice.(2) any saving of time or public resources
(1) Any settlement agreement6 between the FCA3 and the person concerned will therefore need to include a statement as to the appropriate penalty discount in accordance with this procedure.3(2) In certain circumstances the person concerned may consider that it would have been possible to reach a settlement at an earlier stage in the action, and argue that it should be entitled to a greater percentage reduction in penalty than is suggested by the table at DEPP 6.7.3G (3). It may
2The settlement discount scheme which applies to the amount of a financial penalty, described in DEPP 6.7.2 G to DEPP 6.7.5 G, also applies to the length of the period of a suspension, restriction,5 condition or disciplinary prohibition (other than a permanent disciplinary prohibition)5, having regard to the FCA's3 statement of policy as set out in DEPP 6A.3. No settlement discount is available with respect to a permanent disciplinary prohibition.5 The settlement discount scheme
(1) For a firm adopting the financial collateral comprehensive method, the effects of bilateral netting contracts covering repurchase transactions, securities or commodities lending or borrowing transactions, and/or other capital market-driven transactions with a counterparty may be recognised.(2) Without prejudice to BIPRU 14 to be recognised the collateral taken and securities or commodities borrowed within such agreements must comply with the eligibility requirements for collateral
For master netting agreements covering repurchase transactions and/or securities or commodities lending or borrowing transactions and/or other capital market-driven transactions1 to be recognised for the purposes of BIPRU 5, they must:(1) be legally effective and enforceable in all relevant jurisdictions, including in the event of the bankruptcy or insolvency of the counterparty;(2) give the non-defaulting party the right to terminate and close-out in a timely manner all transactions
In calculating the ‘fully adjusted exposure value’ (E*) for the exposures subject to an eligible master netting agreement covering repurchase transactions and/or securities or commodities lending or borrowing transactions and/or other capital market-driven transactions, a firm must calculate the volatility adjustments to be applied in the manner set out in BIPRU 5.6.6 R to BIPRU 5.6.11 R either using the supervisory volatility adjustments approach or the own estimates of volatility
A firm must calculate the net position in each type of security or commodity by subtracting from the total value of the securities or commodities of that type lent, sold or provided under the master netting agreement, the total value of securities or commodities of that type borrowed, purchased or received under the agreement.[Note:BCD Annex VIII Part 3 point 6]
A firm must calculate the net position in each currency other than the settlement currency of the master netting agreement by subtracting from the total value of securities denominated in that currency lent, sold or provided under the master netting agreement added to the amount of cash in that currency lent or transferred under the agreement, the total value of securities denominated in that currency borrowed, purchased or received under the agreement added to the amount of cash
E* must be calculated according to the following formula:E* = max {0, [(∑(E) -∑ (C)) + ∑ (|net position in each security| x Hsec) + (∑|Efx| x Hfx)]}where:(1) (where risk weighted exposure amounts are calculated under the standardised approach) E is the exposure value for each separate exposure under the agreement that would apply in the absence of the credit protection;(2) C is the value of the securities or commodities borrowed, purchased or received or the cash borrowed or received
The master netting agreement internal models approach1 is an alternative to using the supervisory volatility adjustments approach or the own estimates of volatility adjustments approach in calculating volatility adjustments for the purpose of calculating the ‘fully adjusted exposure value’ (E*) resulting from the application of an eligible master netting agreement covering repurchase transactions, securities or commodities lending or borrowing transactions and/or other capital
For the agreements referred to in CONC 4.3.2 R, a firm should consider whether it is necessary or appropriate to provide explanations of the matters in CONC 4.5.3R (2), in particular, a firm should consider highlighting key risks to the borrower including the consequences of missing payments or under-paying, including, where applicable, the risk of repossession of the borrower's property.[Note: section 55A(6) of CCA and paragraph 3.1 of ILG][Note: Until the end of 30 September
(1) 3This rule applies if the lender, or the prospective lender, under a P2P agreement is, or would be, carrying on by way of business the regulated activity of entering into a regulated credit agreement as lender by entering into the agreement.(2) Any fee to be paid by the borrower to the operator of an electronic system in relation to lending must be agreed between the borrower and the operator, and that agreement must be recorded in writing or other durable medium before the
(1) Before a P2P agreement is made, the firm must:(a) provide the prospective borrower with an adequate explanation of the matters referred to in (2) in order to place the borrower in a position to assess whether the agreement is adapted to the borrower's needs and financial situation;(b) where the P2P agreement is not a non-commercial agreement, advise the prospective borrower:(i) to consider the information which is required to be disclosed under section 55(1) of the CCA; and(ii)
Where CONC 4.3.4 R applies to a firm, the firm must comply with the rules, and observe the guidance, in CONC 4.2 to the same extent as if it were the lender under an agreement to which those rules apply.[Note: Until the end of 30 September 2014, transitional provisions apply to CONC 4.3.5 R: see CONC TP 4.1]
9In order to comply with LR 9.2.2AR (2)(a), where a listed company will have more than one controlling shareholder, the listed company will not be required to enter into a separate agreement with each controlling shareholder if: (1) the listed company reasonably considers, in light of its understanding of the relationship between the relevant controlling shareholders, that a controlling shareholder can procure the compliance of another controlling shareholder and that controlling
9In addition to the annual confirmation required to be included in a listed company's annual financial report under LR 9.8.4R (14), the FCA may request information from a listed company under LR 1.3.1 R (3) to confirm or verify that an independence provision contained in any agreement entered into under LR 6.1.4B R (1) or LR 9.2.2AR (2)(a) or a procurement obligation (as set out in LR 6.1.4CR (2)(a) or LR 9.2.2BR (2)(a)) contained in an agreement entered into under LR 6.1.4B R
9A listed company must notify the FCA without delay if: (1) it no longer complies with LR 9.2.2G R; (2) it becomes aware that an independence provision contained in an agreement entered into under LR 6.1.4B R (1) or LR 9.2.2AR (2)(a) has not been complied with by the controlling shareholder or any of its associates; or(3) it becomes aware that a procurement obligation (as set out in LR 6.1.4CR (2)(a) or LR 9.2.2BR (2)(a)) contained in an agreement entered into under LR 6.1.4B
(1) 1A person subject to enforcement action may
agree to a financial penalty or other outcome rather than contest formal action
by the FCA.4Alternatively, they may enter into a focused resolution agreement and in this way partly contest the proposed action (see DEPP 5.1.8AG to DEPP 5.1.8DG).54(1A) 5Further, even if the person subject to enforcement action wishes to fully contest the proposed enforcement action, they may choose to do so by (i) agreeing to the FCA issuing the required
5The issues which may be agreed under a focused resolution agreement include, but are not limited to: (1) questions of fact;(2) whether specified facts amount to a breach (or more than one breach);(3) whether action for a financial penalty and/or public censure is warranted;(4) the appropriate level of a financial penalty;(5) whether action for a suspension, restriction, condition or limitation (as defined for the purposes of DEPP 6A) is warranted;(6) the appropriate length of
5The terms of any proposed focused resolution agreement:(1) will be put in writing and be agreed by FCA staff and the person concerned;(2) may refer to a draft of the proposed warning notice; and (3) may, depending upon the stage in the enforcement process at which agreement is reached, include an agreement by the person concerned to: (a) waive and not exercise any rights under sections 387 (Warning notices) and 394 (Access to Authority material) of the Act to notice of, or access
5Where the proposed settlement is on the basis of a focused resolution agreement, the role of the settlement decision makers shall be as follows:(1) The settlement decision makers will decide whether or not to give a warning notice. (For the avoidance of doubt, the settlement decision makers may meet the relevant FCA staff or the person concerned in accordance with DEPP 5.1.5G and any such meeting shall not affect the settlement decision makers’ ability to decide whether or not
8Where a company has a premium listing and:(1) it is not in compliance with:(a) the provisions inLR 9.2.2AR (2)(a) ; or(b) LR 9.2.2G R; or(2) it becomes aware that a controlling shareholder or any of its associates is not in compliance with an independence provision contained in an agreement entered into under LR 6.1.4BR (1) or LR 9.2.2AR (2)(a);(3) it becomes aware that a procurement obligation (as set out in LR 6.1.4CR (2)(a) or LR 9.2.2BR (2)(a) contained in an agreement entered
A reference in this chapter:(1) to a transaction or arrangement by a listed company includes a transaction or arrangement by its subsidiary undertaking; and(2) to a transaction or arrangement is, unless the contrary intention appears, a reference to the entering into of the agreement for the transaction or the entering into of the arrangement.
5In LR, a "substantial shareholder” means any person who is entitled to exercise, or to control the exercise of, 10% or more of the votes able to be cast on all or substantially all matters at general meetings of the company (or of any company which is its subsidiary undertaking or parent undertaking or of a fellow subsidiary undertaking of its parent undertaking). For the purposes of calculating voting rights, the following voting rights are to be disregarded:(1) any voting
1Under sections 359 (Petitions) and 367 (Winding up Petitions) of the Act, a company or partnership is deemed to be unable to pay its debts if it is in default on an obligation to pay a sum due and payable under an agreement where the making or performance of the agreement constitutes or is part of a regulated activity which the company or partnership is carrying on.
1While a default on a single agreement of the type mentioned in paragraph 13.3.2 is, under the Act, a presumption of an inability to pay debts, the FCA will consider the circumstances surrounding the default. In particular, the FCA will consider whether: (1) the default is the subject of continuing discussion between the company or partnership and the creditor, under the relevant agreement, which is likely to lead to a resolution; (2) the default is an isolated incident; (3) in
(1) Firms may use the following wording, or alternative wording which has substantively the same meaning, in any settlement agreement:“For the avoidance of doubt, nothing precludes [name of worker] from making a “protected disclosure” within the meaning of Part 4A (Protected Disclosures) of the Employment Rights Act 1996. This includes protected disclosures made about matters previously disclosed to another recipient.”(2) Compliance with (1) may be relied on as tending to establish
The chairman of the relevant meeting will ensure that the meeting is conducted so as to enable:(1) the recipient of the warning notice or first supervisory notice to make representations;(2) the relevant FCA1 staff to respond to those representations;1(3) the RDC members to raise with those present any points or questions about the matter (whether in response to particular representations or more generally about the matter); and(4) the recipient of the notice to respond to points
FCA1 staff responsible for recommending action to the RDC will continue to assess the appropriateness of the proposed action in the light of new information or representations they receive and any material change in the facts or circumstances relating to a particular matter. It may be therefore that they decide to give a notice of discontinuance to a person to whom a warning notice or decision notice has been given. The decision to give a notice of discontinuance does not require
(1) A firm must not agree to:(a) deal in investments as agent for an insurance undertaking in connection with insurance mediation; or(b) act
as agent for an insurance undertaking for
the purpose of settling claims or handling premium refunds;
or(c) otherwise
receive money as agent of an insurance undertaking;unless:(d) it
has entered into a written agreement with the insurance
undertaking to that effect; and(e) it
is satisfied on reasonable grounds that the terms of the policies
A firm may
operate on the basis of an agency agreement as provided for by CASS 5.2.3 R for
some of its clients and with
protection provided by a client money trust
in accordance with CASS
5.3 or CASS
5.4 for other clients.
A firm may also operate on either
basis for the same client but
in relation to different transactions. A firm which
does so should be satisfied that its administrative systems and controls are
adequate and, in accordance with CASS 5.2.4 G, should ensure that
(1) Any agreement or arrangement with a party (other than a wholly owned subsidiary undertaking of the listed company):(a) under which a listed company agrees to discharge any liabilities for costs, expenses, commissions or losses incurred by or on behalf of that party, whether or not on a contingent basis;(b) which is exceptional; and(c) under which the maximum liability is either unlimited, or is equal to or exceeds an amount equal to 25% of the average of the listed company's
For the purposes of LR 10.2.4R (1), the FCA considers the following indemnities not to be exceptional:(1) those customarily given in connection with sale and purchase agreements;(2) those customarily given to underwriters or placing agents in an underwriting or placing agreement;(3) those given to advisers against liabilities to third parties arising out of providing advisory services; and(4) any other indemnity that is specifically permitted to be given to a director or auditor
(1) 3The following arrangements will meet the definition of break fee arrangements in LR 10.2.6A R (although this list is not intended to be exhaustive): ‘no shop’ and ‘go shop’ type provisions, which require payment of a sum to a party in the event the seller finds an alternative purchaser; a requirement to pay another party’s wasted costs in the event a transaction fails; non refundable deposits.(2) In contrast, payments in the nature of damages (whether liquidated or unliquidated)
The transferor will need to provide the appropriate regulator8 with the information that the Home State regulator requires from the appropriate regulator8. This information includes:88(1) the transfer agreement or a draft, with:(a) the names and addresses of the transferor and transferee; and(b) the classes of insurance business and details of the nature of the risks or commitments to be transferred;(2) for the business to be transferred (both before and after reinsurance):(a)
If the transferor is a UK insurer (other than a pure reinsurer)8 and the business to be transferred includes business carried on from a branch in another EEA State, then the appropriate regulator8 has to consult the Host State regulator, who has 3 months to respond. The appropriate regulator8 will need to be given the information that the Host State regulator requires from it. This information should identify the parties to the transfer and include the transfer agreement or draft
If the transferor is a8UK insurer and the business to be transferred includes a long-term insurance contract (other than reinsurance) for which the state of the commitment is an EEA state other than the United Kingdom, then the appropriate regulator8 has to consult the Host State regulator. If the transferor is a8UK insurer and the business to be transferred includes a general insurance contract (other than reinsurance) for which the state of the risk is an EEA state other than
In application of the CCR mark to market method:(1) in BIPRU 13.4.2 R a firm may obtain the current replacement cost for the contracts included in a netting agreement by taking account of the actual hypothetical net replacement cost which results from the agreement; in the case where netting leads to a net obligation for the firm calculating the net replacement cost, the current replacement cost is calculated as "0"; and(2) in BIPRU 13.4.3 R a firm may reduce the figure for potential
For the calculation of the potential future credit exposure according to the formula in BIPRU 13.4.17 R perfectly matching contracts included in the netting agreement may be taken into account as a single contract with a notional principal equivalent to the net receipts.[Note: BCD Annex III Part 7 point c(ii) (part)]
(1) 1A firm must not enter into an agreement with a customer under which a charge is, or may become, payable for an optional additional product unless the customer has actively elected to obtain that specific product. (2) A firm must not impose a charge on a customer for an optional additional product under an agreement entered into on or after 1 April 2016 unless the customer actively elected to obtain that specific product before becoming bound to pay the charge.(3) A firm must
(1) When a listed company enters into a joint venture it should consider how this chapter applies.(2) It is common, when entering into a joint venture, for the partners to include exit provisions in the terms of the agreement. These typically give each partner a combination of rights and obligations to either sell their own holding or to acquire their partner's holding should certain triggering events occur.(3) If the listed company does not retain sole discretion over the event
For any electronic communication with a customer in relation to a home finance transaction3 a firm should: 3(1) have in place appropriate arrangements, including contingency plans, to ensure the secure transmission and receipt of the communication; it should also be able to verify the authenticity and integrity of the communication together with the date and time sent and received; the arrangements should be proportionate and take into account the different levels of risk in a
The requirement under section 64(1)(b) of the CCA to send debtors or hirers a notice of their rights to cancel a cancellable agreement within the seven days following the making of that agreement does not apply in the case of the agreements described in SUP 8A.2.5 G, if: (1) on application by a firm to the FCA, the FCA has determined, having regard to:(a) the manner in which antecedent negotiations for the relevant agreements with the firm are conducted; and(b) the information
Where a master UCITS and a feeder UCITS have different auditors, those auditors must enter into an information-sharing agreement in order to ensure the fulfilment of their respective duties, including the arrangements taken to comply with COLL 11.5.3 R and COLL 11.5.4 R (Preparation of the audit report).[Note: article 62(1) first paragraph of the UCITS Directive]
(1) The information-sharing agreement referred to in COLL 11.5.1 R must include:(a) identification of the documents and categories of information which are to be routinely shared between both auditors;(b) whether the information or documents referred to in (a) are to be provided by one auditor to the other or made available on request;(c) the manner and timing, including any applicable deadlines, of the transmission of information by the auditor of the master UCITS to the auditor
Where CONC 5.5.3 R applies to a firm, the firm must comply with CONC 5.3.2 R, CONC 5.3.4 R, CONC 5.3.5 R, CONC 5.3.6 R and CONC 5.3.7 R to the same extent as if it were the lender under an agreement to which those rules apply and should take into account the guidance in CONC 5.3 to the same extent, and should also take into account CONC 5.2.3 G and CONC 5.2.4 G treating them as guidance on CONC 5.5.3 R.
Before a P2P agreement is entered into under which a person takes an article in pawn, the firm must:(1) undertake the assessment referred to in CONC 5.2.2R (1) of the prospective borrower; and (2) comply with CONC 5.3.2 R, CONC 5.3.4 R, CONC 5.3.5 R, CONC 5.3.6 R and CONC 5.3.7 R to the same extent as if it were the lender under an agreement to which those rules apply, and should also take into account the guidance in CONC 5.2.3 G and CONC 5.2.4 G and CONC 5.3 to the same extent.
(1) 1A firm must not appoint a person as its appointed representative until it has entered into a written agreement (a "multiple principal agreement") with every other principal the person may have; but this does not apply to the appointment of an introducer appointed representative nor does it require an agreement with another principal which has appointed a person as an introducer appointed representative.(2) A firm must not unreasonably decline to enter into a multiple principal
1
Multiple principal agreement
Matter |
Explanation |
|
1. |
Scope of appointment |
The scope of appointment given by each principal to the appointed representative. |
2. |
Complaints handling |
The identity of the principal which will be the point of contact for a complaint from a client (referred to as the "lead-principal" in SUP 12.4.5D G to SUP 12.4.5E G). |
An agreement that each principal will co-operate with each other principal in resolving a complaint from a client in relation to the appointed representative's conduct. |
||
The arrangements for complaints handling, including arrangements for resolving disputes between the principals in relation to their liability to a client in respect of a complaint and arrangements for dealing with referrals to the Financial Ombudsman Service. |
||
3. |
The arrangements for approving financial promotion. |
|
4. |
Control and monitoring |
The arrangements for the control and monitoring of the activities of the appointed representative (see in particular SUP 12.6.6 R (Regulated activities and investment services outside the scope of appointment) and SUP 12.6.7 G (Senior management responsibility for appointed representatives)). |
5. |
Approved person status |
The arrangements for making applications for approved person status (see SUP 10A and SUP 10C12 (Approved persons) and the corresponding PRA requirements).12 2323 |
6. |
Training and competence |
The arrangements for training and competence (see TC). |
7. |
Co-operation |
The arrangements for co-operation over any other issues which may arise from the multiple appointments, including issues which may damage the interests of clients dealing with the appointed representative and administrative issues. |
An agreement by each principal to take reasonable steps to ensure that it does not cause the appointed representative or any of its other principals to be in breach of their obligations to each other or under the regulatory system. |
||
8. |
Sharing information |
The arrangements for sharing information on matters relevant to the matters covered under the multiple principal agreement and each principal's obligations under SUP 12.6 (Continuing obligations of firms with appointed representatives). |
An agreement that each principal will notify each other principal of any information which is materially relevant to the multiple principal agreement. |
1One effect of the multiple principal agreement is to introduce a 'lead-principal' concept in relation to complaints handling for the benefit of the client. For example, where the client has been given advice by an appointed representative who has two principals, and the advice could have led to a transaction being arranged with either principal, the client will know that he may pursue his complaint with (but not necessarily against) one of the principals. Whether he later decides