Business areas and management functions |
Explanation |
(1) Payment services |
This means: (1) payment services; (2) issuing and administering other means of payment (for example, cheques and bankers' drafts); (3) issuing electronic money; and (4) current accounts. |
(2) Settlement |
This means clearing and settlement of any transactions described in rows (3) and (6) to (9) of this annex, in relation to the assets covered by (9). It also includes clearing and settlement of any transactions described in row (10). |
(3) Investment management |
This has the same meaning as managing investments with the following adjustments: (a) it covers all types of assets; and (b) the exclusions in the Regulated Activities Order do not apply. It also covers fund management. |
(4) Financial or investment advice |
This includes advising on investments. |
(5) Mortgage advice |
This has the same meaning as advising on regulated mortgage contracts but is expanded to cover land anywhere in the world and to cover security of any kind over land. |
(6) Corporate investments |
This means acquiring, holding, managing and disposing a firm's investments made for its own account. |
(7) Wholesale sales |
This means the selling of any investment to a person other than a retail customer. It does not include the activities in (1). |
(8) Retail sales |
This means the selling of any investment to a retail customer. It includes savings accounts. It does not include the activities in (1). |
(9) Trading for clients |
This means dealing in investments as agent and execution of orders on behalf of clients but the list of products includes money market instruments and foreign exchange. |
(10) Market making |
This has the same meaning as it does in MIFID (see the definition of market maker in article 4.1(8)). |
(11) Investment research |
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(12) Origination/syndication and underwriting |
Origination and syndication include: (1) entering into or acquiring (directly or indirectly) any commitment or investment with a view to transferring some or all of it to others, or with a view to others investing in the same transaction; (2) sub-participation; and (3) any transaction described in the Glossary definition of originator. Underwriting includes underwriting that is not on a firm commitment basis. A commitment or investment includes an economic interest in some or all of it. This activity also includes the provision of services relating to such transactions. |
(13) Retail lending decisions |
Deciding whether, and on what terms, to lend to retail customers. Lending includes granting credit, leasing and hire (including finance leasing). |
(14) Wholesale lending decisions |
Deciding whether, and on what terms, to lend to persons who are not retail customers. Lending includes granting credit, leasing and hire (including finance leasing). |
(15) Design and manufacturing of products intended for wholesale customers |
Wholesale customers mean persons who are not retail customers |
(16) Design and manufacture of products intended for retail customers |
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(17) Production and distribution of marketing materials and communications |
This includes financial promotions |
(18) Customer service |
This means dealing with clients after the point of sale, including queries and fulfilment of client requests |
(19) Customer complaints handling |
This includes the firm's compliance with DISP. It also includes: (1) any similar procedures relating to activities that do not come under the jurisdiction of the Financial Ombudsman Service; (2) activities that take place outside the UK; and (3) activities that are not subject to any ombudsman service. |
(20) Collection and recovering amounts owed to a firm by its customers Dealing with customers in arrears |
‘Customer’ means any person falling into any of the definitions of client in the Glossary so far as they apply to the FCA's Handbook. The definition is extended to cover all services provided by the firm and not just those that are provided in the course of carrying on a regulated activity or an ancillary service. |
(21) Middle office |
This means risk management and controls in relation to, and accounting for, transactions in securities or derivatives |
(22) The firm's information technology |
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(23) Business continuity planning |
This means the functions described in SYSC 4.1.6R and SYSC 4.1.7R |
(24) Human resources |
This includes recruitment, training and competence and performance monitoring |
(25) Incentive schemes for the firm's staff |
This is not limited to schemes based on sales. |
(26) Providing information in relation to a specified benchmark |
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Note (1): The purpose of this annex is explained in SYSC 4.5 (Management responsibilities maps for UK2 relevant authorised persons) and SYSC 4.7.37G. This annex is also referred to in SYSC 4.6 (Management responsibilities maps for non-UK relevant authorised persons) and SYSC 4.8 (Senior management responsibilities for third-country relevant authorised persons: allocation of responsibilities) (see SYSC 4.6.14 and SYSC 4.8.35).2 |
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Note (2): A firm does not have to use the split of activities in this annex for the purposes in Note (1). If a firm does decide to use it, it may adapt it to suit its management arrangements better. For example, a firm may find the split of activities into retail and wholesale activities unsuitable. If so, the firm might: (a) treat retail and wholesale activities together; or (b) use its own definition of retail and wholesale activities. |
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Related provisions for PERG 8.11.2
Multiple principal agreement
Matter |
Explanation |
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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. |
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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. |
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3. |
The arrangements for approving financial promotion. |
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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. |
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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. |