Related provisions for GEN 1.1.2
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The FCA's approach to taking enforcement action under the PARs will reflect its general approach to enforcing the Act, as set out in EG 2. It will seek to exercise its enforcement powers in a manner that is transparent, proportionate and responsive to the issue and consistent with its publicly stated policies. It will also seek to ensure fair treatment of subjects under investigation when exercising its enforcement powers.
Part 1 of Schedule 7 to the PARs applies many of the provisions of the Act in relation to the FCA’s investigation and information-gathering powers to the FCA’s functions under the PARs. The effect of this is to apply the same procedures under the Act for appointing investigators and requiring information when investigating any breaches of the PARs.
For example, the FCA will, if appropriate, notify the subject of the investigation that it has appointed investigators to carry out an investigation and the reasons for the appointment. The FCA's policy in regulatory investigations under the PARs is to use powers to compel information, in the same way as it would in the course of an investigation under the Act.
Paragraph 1 of Schedule 7 to the PARs applies the procedural provisions of Part 9 of the Act (with some modifications), in respect of matters that can be referred to the Tribunal, and Paragraph 4 of Schedule 7 to the PARs applies Part 26 of the Act to warning notices and decision notices given under the PARs.
(1) Section 60(2A) of the Act (Applications for approval) says that, if a firm is applying for approval from the FCA or the PRA for a person to perform a designated senior management function, the regulator to which the application is being made must require the application to contain, or be accompanied by, a statement setting out the aspects of the affairs of the firm which it is intended that the person will be responsible for managing in performing the function. (2) That statement
Under section 62A of the Act, a firm must provide the FCA with a revised statement of responsibilities if there has been any significant change in the responsibilities of an FCA-approved SMF manager. More precisely:(1) if a firm has made an application (which was granted) to the FCA for approval for a person to perform an FCA-designated senior management function; (2) the application contained, or was accompanied by, a statement of responsibilities; and(3) since the granting of
(1) A firm must provide a revised statement of responsibilities under section 62A of the Act under cover of Form J (SUP 10C Annex 5D).(2) A firm must not use Form J where the revisions are to be made as part of arrangements involving an application:(a) for approval for the FCA-approved SMF manager concerned to perform another designated senior management function for the same firm; or(b) to vary (under section 63ZA of the Act (Variation of senior manager’s approval at request
(1) SUP 10C.11.13D means that, at any time, a firm should have a single document for an SMF manager that:(a) contains statements of responsibilities for all designated senior management functions for which that SMF manager has approval; and(b) where relevant, contains statements of responsibilities for all designated senior management functions for which the firm is applying for approval.(2) The document in (1) should cover PRA-designated senior management functions as well as
(1) A complete set of current statement of responsibilities means all statements of responsibilities that the firm has provided to the FCA or PRA as revised under section 62A of the Act.(2) A statement of responsibilities is not current if the person in question no longer performs any of the controlled function to which it relates.
(1) A statement of responsibilities (including its attachment sheet for additional information) should:(a) be complete by itself;(b) not refer to documents not forming part of it; and(c) only contain material about the matters that this chapter, the corresponding PRA requirements and the Act say should be included in it.(2) For example, if it is necessary to include relevant material from the firm's report and accounts, the statement of responsibilities should not attach the whole
(1) The FCA may request a firm to include specific responsibility for a regulatory outcome in the statement of responsibilities of the relevant SMF managers. (2) For example, where the FCA asks a firm to take remediation action following an internal or supervisory review or a report under section 166 of the Act (Reports by skilled persons) and considers it appropriate for an SMF manager to take responsibility for that action, it may ask the firm to add an additional, customised,
(1) 8The resources of A must be appropriate in relation to the regulated activities that A carries on or seeks to carry on.(2) The matters which are relevant in determining whether A has appropriate resources include-(a) the nature and scale of the business carried on, or to be carried on, by A;(b) the risks to the continuity of the services provided by, or to be provided by, A; and(c) A’s membership of a group and any effect which that membership may have.(3) Except in a case
(1) The non-financial resources of B must be appropriate in relation to the regulated activities that B carries on or seeks to carry on, having regard to the operational objectives of the FCA.(2) The matters which are relevant in determining whether the condition in sub-paragraph (1) is met include-(a) the nature and scale of the business carried on, or to be carried on, by B;(b) the risks to the continuity of the services provided by, or to be provided by, B;(c) B’s a member
8Paragraph 3C of Schedule 6 to the Act sets out the appropriate non-financial resources threshold condition which is relevant to the discharge by the FCA of its functions under the Act in relation to firms carrying on, or seeking to carry on, regulated activities which include a PRA-regulated activity.
8The guidance in COND 2.4 should be read as applying to both paragraph 2D of Schedule 6 of the Act and, as far as relevant to the discharge by the FCA of its functions in respect of firms carrying on, or seeking to carry on, a PRA-regulated activity under the Act, paragraph 3C of Schedule 6 of the Act.
8Firms carrying on, or seeking to carry on, a PRA-regulated activity, should note that the PRA is responsible for assessing their financial resources. Paragraphs 4D and 5D of Schedule 6 to the Act contain the threshold conditions relating to financial resources which are relevant to the discharge by the PRA of its functions under the Act in relation to firms carrying on, or seeking to carry on, a PRA-regulated activity (in addition to additional non-financial resources threshold
(1) [deleted]88(2) In this context, the FCA will interpret the term 'appropriate88' as meaning sufficient in terms of quantity, quality and availability, and 'resources' as including all financial resources (though only in the case of firms not carrying on, or seeking to carry on, a PRA-regulated activity)8, non-financial resources and means of managing its resources; for example, capital, provisions against liabilities, holdings of or access to cash and other liquid assets, human
(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
15The guidance in COND 2.5 should be read as applying to both paragraph 2E of Schedule 6 to the Act and, as far as relevant to the discharge by the FCA of its functions under the Act in respect of firms carrying on, or seeking to carry on, a PRA-regulated activity, paragraph 3D of Schedule 6 of the Act.
15Firms carrying on, or seeking to carry on, a PRA-regulated activity, should note that the PRA is also responsible for assessing suitability under its own threshold conditions. Paragraphs 4E and 5E of Schedule 6 to the Act set out the suitability threshold conditions which are relevant to the discharge by the PRA of its functions under the Act in relation to firms carrying on, or seeking to carry on, a PRA-regulated activity. For the avoidance of doubt, this guidance does not
(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
(1) The emphasis of the threshold conditions set out in paragraphs 2E and 3D of Schedule 6 of the Act15 is on the suitability of the firm itself. The suitability of each person who performs a controlled function will be assessed by the FCA and/or the PRA, as appropriate,15 under the approved persons regime (in relation to an FCA-approved person, 16see SUP 10A (FCA Approved Persons), SUP 10C (FCA senior management regime for approved persons in relevant authorised persons)16 and
(1) [deleted]1515(2) Examples of the kind of general considerations to which the FCA may have regard when assessing whether a firm will satisfy, and continue to satisfy, the threshold conditions set out in paragraphs 2E and 3D of Schedule 6 to the Act include, but are not limited to, whether the firm:1515(a) conducts, or will conduct, its business with integrity and in compliance with proper standards;(b) has, or will have, a competent and prudent management; and(c) can demonstrate
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
Where an ROIE1 includes in its report made under section 295(1) of the Act (Notification: overseas investment exchanges and overseas clearing houses) a statement in compliance with section 295(2)(a) of the Act that an event has occurred in the period covered by that report which is likely to affect the FCA's1 assessment of whether it is satisfied as to the requirements set out in section 292(3) (Overseas investment exchanges and overseas clearing houses), it must include particulars
An ROIE1 must include in its report submitted in compliance with section 295(1) of the Act:1(1) particulars of any changes to: (a) its memorandum and articles of association or any similar or analogous documents; (b) its regulatory provisions; (c) its chairman or president, or chief executive (or equivalent);(2) particulars of any disciplinary action (or any similar or analogous action) taken against it by any supervisory authority in its home territory, whether or not that action
An ROIE1 must include in the first report submitted under section 295(1) of the Act after the recognition order in relation to that ROIE1 is made: 11(1) particulars of any events of the kind described in section 295(2) of the Act which occurred; (2) particulars of any change specified in REC 6.7.4 R (1) or disciplinary action specified in REC 6.7.4 R (2) which occurred; and(3) any annual report and accounts which covered a period ending; after the application for recognition
Where an ROIE1 proposes to change: (1) its address in the United Kingdom for the service of notices or other documents required or authorised to be served on it under the Act; or(2) the address of its head office;it must give notice to the FCA1 and inform it of the new address at least 14 days before the change is effected.1
(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) A person (other than a firm with only a limited permission)15must satisfy the conditions in section 39(1) of the Act to become an appointed representative. These are that:(a) the person must not be an authorised person, that is, he must not have permission under the Act to carry on any regulated activity in his own right (section 39(1) of the Act); (b) the person must have entered into a contract with an authorised person, referred to in the Act as the 'principal', which:(i)
(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
(1) 15A firm must satisfy the conditions in section 39(1C) of the Act to become an appointed representative. These are that:(a) the firm must have only a limited permission (section 39(1C)(a) of the Act);(b) the firm must have entered into a contract with another authorised person, referred to in the Act as the 'principal', which:(i) permits or requires him to carry on business of a description prescribed in the Appointed Representatives Regulations (section 39(1C)(b)(i) of the
As long as the conditions in section 39 of the Act are satisfied, any person, other than an authorised person (unless he has only a limited permission)15, may become an appointed representative, including a body corporate, a partnership or an individual in business on his own account. However, an appointed representative cannot be an authorised person under the Act unless he has only a limited permission. A person15 cannot be exempt for some regulated activities and authorised
(1) The Appointed Representatives Regulations are made by the Treasury under sections 39(1)18, (1C) and (1E)15 of the Act. These regulations describe, among other things, the business for which an appointed representative may be exempt or to which sections 20(1) and (1A) and 23(1A) of the Act may not apply15, which is business which comprises any of:(a) dealing in investments as agent (article 21 of the Regulated Activities Order) where the transaction relates to a pure protection
(1) An introducer is an individual appointed by a firm or by an appointed representative of such a firm to carry out, in the course of designated investment business, either or both of the following activities:4(a) effecting introductions; (b) distributing non-real time financial promotions.(2) An introducer is not an exempt person under section 39 of the Act (unless he is also an introducer appointed representative) and hence cannot benefit from the exemption to carry on regulated
1When considering whether to cancel a sponsor's approval on its own initiative, the FCA will take into account all relevant factors, including, but not limited to, the following: (1) the competence of the sponsor;
(2) the adequacy of the sponsor's systems and controls;
(3) the sponsor's history of compliance with the listing rules;
(4) the nature, seriousness and duration of the suspected failure of the sponsor to meet (at
1When considering whether to cancel a primary information provider’s approval on its own initiative, the FCA will take into account all relevant factors, including, but not limited to, the following: (1) the competence of the primary information provider; (2) the adequacy of the primary information provider’s systems and controls;
(3) the primary information provider’s history of compliance with DTR 8; (4) the nature, seriousness and duration of the suspected
Arrangement is defined in section 59(10) of the Act as any kind of arrangement for the performance of a function which is entered into by a firm or any of its contractors with another person and includes the appointment of a person to an office, his becoming a partner, or his employment (whether under a contract of service or otherwise). For the provisions in this chapter relating to outsourcing, see SUP 10A.13.5 G and SUP 10A.13.6 G.
If, however, a firm is a member of a group, and the arrangements for the performance of an FCA controlled function of the firm are made by, for instance, the holding company, the person performing the function will only require approval if there is an arrangement (under section 59(1)) or a contract (under section 59(2)) between the firm and holding company permitting this. This need not be a written contract but could arise, for example, by conduct, custom and practice.
1The CCA Order does not require the FCA to publish procedures about its approach towards applications to the court for an injunction or restitution order. However, the FCA will normally follow its equivalent decision-making procedures for similar decisions under the Act as set out in EG 10 and EG 11.
1The CCA Order applies the procedural provisions of Part 9 of the Act, as modified by the CCA Order, in respect of matters that can be referred to the Tribunal. Referrals to the Tribunal in respect of decision notices given under sections 67 (pursuant to article 3(3) of the CCA Order) and 208 (pursuant to article 3(7) of the CCA Order) of the Act are treated as disciplinary referrals for the purpose of section 133 of the Act.
As the provision of credit data on companies is not a regulated activity under the Act, the Regulations create a separate monitoring and enforcement regime but apply, or make provision corresponding to, certain aspects of the Act. The FCA's approach to taking enforcement action under the Regulations will reflect its general approach to enforcing the Act, as set out in EG 2. It will seek to exercise its enforcement powers in a manner that is transparent, proportionate and responsive
Regulation 23 of the Small and Medium Sized Business (Finance Platforms) Regulations applies many of the provisions of the Act in relation to the FCA’s investigation and information-gathering powers in respect of designated banks and designated finance platforms. The effect of this is to apply the same procedures under the Act for appointing investigators and requiring information when investigating any breaches of the Small and Medium Sized Business (Finance Platforms) Regulations.
For example, the FCA will notify the subject of the investigation that it has appointed investigators to carry out an investigation and the reasons for the appointment. The FCA's policy in regulatory investigations under the Regulations is to use powers to compel information, in the same way as it would in the course of an investigation under the Act.
Regulation 43 of the Small and Medium Sized Business (Finance Platforms) Regulations applies to the procedural provisions of Part 9 of the Act, in respect of matters that can be referred to the Tribunal, and regulation 41 of the Small and Medium Sized Business (Finance Platforms) Regulations applies to Part 26 of the Act to warning and decision notices given under the Small and Medium Sized Business (Finance Platforms) Regulations.
As with cases under the Act, the FCA may settle or mediate appropriate cases involving breaches of the Small and Medium Sized Business (Finance Platforms) Regulations to assist it to exercise its functions. DEPP 5, DEPP 6.7 and EG 5 set out information on the FCA’s settlement process and the settlement discount scheme.
Section 234 of the Act (Industry Funding) enables the FCA to require the payment to it or to FOS Ltd, by firms or any class of firm, of specified amounts (or amounts calculated in a specified way) to cover the costs of: (1) the establishment of 1the Financial Ombudsman Service; and (2) its operation in relation to the Compulsory Jurisdiction.
Section 235(1) states that a collective investment scheme means any arrangements with respect to property of any description. The purpose or effect of the arrangements must be to enable the persons taking part in them to participate in or receive profits or income arising from the acquisition, holding, management or disposal of the property or sums paid out of such profits or income. The participants must not have day-to-day control over the management of the property (section
Analysing a typical corporate structure in terms of the definition of a collective investment scheme, money will be paid to the body corporate in exchange for shares or securities issued by it. The body corporate becomes the beneficial owner of that money in exchange for rights against the legal entity that is the body corporate. The body corporate then has its own duties and rights that are distinct from those of the holders of its shares or securities. Such arrangements will,
Where a body corporate does come within the definition of a collective investment scheme in section 235(1) to (3), the only relevant issue is to determine whether or not it is excluded. As PERG 9.2.2 G (Introduction) explains, the exclusions are in the Schedule to the Financial Services and Markets Act 2000 (Collective Investment Schemes) Order 2001 (SI 2001/1062) (Arrangements not amounting to a collective investment scheme). If a body corporate satisfies any of the exclusions
In the FCA's view, the question of what constitutes a single scheme in line with section 235(4) of the Act does not arise in relation to a body corporate. This is simply because the body corporate is itself a collective investment scheme (and so is a single scheme). Section 235(4) contemplates a 'separate' pooling of parts of the property that is subject to the arrangements referred to in section 235(1). But to analyse a body corporate in this way requires looking through its
7Under section 60A(1) of the Act, before a relevant authorised person may make an application for the FCA's approval of a designated senior management function, the relevant authorised person8 must be satisfied that the person for whom the application is made is a fit and proper person to perform that function.8
7Under sections 60A and 63F 7of the Act, in assessing whether a person is a fit and proper person to perform an FCA designated senior management function or an FCA specified significant-harm function, 7a relevant authorised person must have particular regard to whether that person:77(1) has obtained a qualification; or(2) has undergone, or is undergoing, training; or(3) possesses a level of competence; or(4) has the personal characteristics;required by general rules made by the
The Act does not prescribe the matters which the FCA7 should take into account when determining fitness and propriety. However, section 61(2) states that the FCA7 may have regard (among other things) to whether the candidate or approved person:777(1) has obtained a qualification; or(2) has undergone, or is undergoing, training; or(3) possesses a level of competence; or(4) has the personal characteristics;required by general rules made by the FCA.7
(1) Section 258A(1) and (2) and section 261Z(1) and (2)1 (Winding up or merger of master UCITS) of the Act, in implementation of article 60 of the UCITS Directive, provide1 that where a master UCITS is wound up, for whatever reason, the FCA is to direct the manager and trustee of any AUT or the authorised contractual scheme manager and depositary of any ACS1 which is a feeder UCITS of the master UCITS to wind up the scheme, unless one of the following conditions is satisfied:1(a)
Where the authorised fund manager of a UCITS scheme that is a feeder UCITS is notified that its master UCITS is to be wound up, it must submit to the FCA the following:(1) where the authorised fund manager of the feeder UCITS intends to invest at least 85% in value of the scheme property in units of another master UCITS:(a) its application for approval under section 283A of the Act for that investment;(b) where applicable, its notice under section 251 (Alteration of schemes and
Where the authorised fund manager of a UCITS scheme that is a feeder UCITS is notified that the master UCITS is to merge with another UCITS scheme or EEA UCITS scheme or divide into two or more such schemes, it must submit to the FCA the following:(1) where the authorised fund manager of the feeder UCITS intends it to continue to be a feeder UCITS of the same master UCITS:(a) its application under section 283A of the Act, for approval;(b) where applicable, a notice under section
Where:(1) the FCA approves an application under sections 283A (Master-feeder structures), 252A or 261S1 (Proposal to convert to a non-feeder UCITS) of the Act or regulation 22A of the OEIC Regulations that arises as a result of the winding-up, merger or division of the master UCITS (other than an application pursuant to COLL 11.6.5R (1)); and1(2) the authorised fund manager of the feeder UCITS holds or receives cash in accordance with COLL 11.6.9R (4) or as a result of a winding-up;the
Where the authorised fund manager of a feeder UCITS gives notice to the FCA under section 251 or section 261Q1 of the Act or regulation 21 of the OEIC Regulations that it intends to wind up the scheme, it must inform:(1) the unitholders of the feeder UCITS; and(2) where notice is given under COLL 11.6.5R (4) (Application for approval by a feeder UCITS where a master UCITS merges or divides), the authorised fund manager of the master UCITS;of its intention without undue delay.[Note:
In determining whether a firm has complied with:5(1) any provision in or under the Act such as any Principle or other rule; or5(2) any provision in Part 3 of the MCD Order; or5(3) any qualifying EU provision specified, or of a description specified, for the purpose of section 39(4) of the Act by the Treasury by order,5anything that an appointed representative has done or omitted to do as respects the business for which the firm has accepted responsibility will be treated as having
Within the legal constraints that apply, the FCA1 may pass on to a skilled person any information which it considers relevant to the skilled person's function. A skilled person, being a primary recipient under section 348 of the Act (Restrictions on disclosure of confidential information by Authority etc.), is bound by the confidentiality provisions in Part XXIII of the Act (Public record, disclosure of information and cooperation) as regards confidential information received1
The limitations in the following sections of the Act are relevant to this chapter:(1) section 175(5) (Information and documents: supplemental provisions) under which a person may be required under Part XI of the Act (Information Gathering and Investigations) to disclose information or produce a document subject to banking confidentiality (with exceptions); and (2) section 413 (Protected items), under which no person may be required to produce, disclose or allow the inspection
2In respect of the appointment of a skilled person under section 166A (Appointment of skilled person to collect and update information) of the Act, a contractual or other requirement imposed on a person to keep any information confidential will not apply if:(1) the information is or may be relevant to anything required to be done as part of the skilled person's appointment under section 166A (Appointment of skilled person to collect and update information) of the Act;(2) a firm
2A firm may provide information that would otherwise be subject to a contractual or other requirement to keep it in confidence if it is provided for the purposes of anything required to be done in respect of the skilled person's collection or updating of information under section 166A (Appointment of skilled person to collect and update information) of the Act.
The FCA4 uses various methods of information gathering on its own initiative which require the cooperation of firms:55(1) Visits may be made by representatives or appointees of the FCA4. These visits may be made on a regular basis, on a sample basis, for special purposes such as theme visits (looking at a particular issue across a range of firms), or when the FCA4 has a particular reason for visiting a firm. Appointees of the FCA4 may include persons who are not FCA4 staff, but
In complying with Principle 11, the FCA4 considers that a firm should, in relation to the discharge by the FCA4 of its functions under the Act:(1) make itself readily available for meetings with representatives or appointees of the FCA4 as reasonably requested;(2) give representatives or appointees of the FCA4 reasonable access to any records, files, tapes or computer systems, which are within the firm's possession or control, and provide any facilities which the representatives
(1) A firm must permit representatives of the FCA4 or persons appointed for the purpose by the FCA4 to have access, with or without notice, during reasonable business hours to any of its business premises in relation to the discharge of the FCA's4 functions under the Act or its obligations under the short selling regulation3.(2) A firm must take reasonable steps to ensure that its agents, suppliers under material outsourcing arrangements and appointed representatives permit
7In complying with Principle 11, the FCA considers that a firm should cooperate with it in providing information for other regulators. Sections 169 (Investigations etc. in support of overseas regulator) of the Act gives the FCA certain statutory powers to obtain information and appoint investigators for overseas regulators if required (see DEPP 7 and EG 3).
24Under section 55H(3) of the Act (Variation by FCA at request of authorised person), if an FCA-authorised person applies to the FCA, the FCA may cancel its Part 4A permission. Cancellation applies to a firm's entire Part 4A permission, that is to every activity and every specified investment and not to the individual elements such as specified investments. Changes to the individual elements of a permission would require a variation.
Under section 39824 of the Act (Misleading the FCA or PRA: residual cases),24 it is an offence, in purported compliance with a requirement imposed by or under the Act (including the directions in SUP 6.4.5 D), for a person to knowingly or recklessly give the regulator24 information that is false or misleading. If necessary, a firm should take appropriate professional advice when supplying information required by the regulator(s).24 An insurer, for example, may ask an actuary to
(1) A firm which is applying for cancellation of Part 4A permission and which is not otherwise authorised by, or under, the Act should, at the same time:15(a) comply with:15(i) SUP 10A.14.8R (for a firm that is not a relevant authorised person);15(ii) SUP 10C.14.5R (for a relevant authorised person); or15(iii) the corresponding PRA requirements; and15(b) notify the appropriate regulator of persons ceasing to perform controlled functions specified by that regulator.15(2) These
If an application for cancellation of a firm'sPart 4A permission has been granted and a firm's status as an authorised person has been withdrawn (see SUP 6.5) it will remain subject to certain investigative and enforcement powers as a former authorised person. These include:2424(1) information gathering and investigation powers in Part XI of the Act (Investigation gathering and investigations) (seeEG 3 (Use of information gathering and investigation powers)6);6(2) powers to apply
However, the following powers may not be used24 against former authorised persons:24(1) powers to take disciplinary action against firms by publishing statements of misconduct under section 205 of the Act (Public censure) or imposing financial penalties under section 206(1) of the Act (Financial penalties); and(2) the power to require firms to make restitution under section 384 of the Act (Power of FCA or PRA24 to require restitution).24
(1) Under section 55V(1)24of the Act (Determination of applications), the relevant regulator24 has six months to consider a completed application.2424(2) If the relevant regulator24 receives an application which is incomplete, that is, where information or a document required as part of the application is not provided, section 55V(2) of the Act requires the relevant regulator24 to determine the incomplete application within 12 months of the initial receipt of the application.2424(3)
The FCA3 will usually consider revoking a recognition order if:3(1) the recognised body is failing or has failed to satisfy 2one or more of the recognised body requirements1and that failure has or will have serious consequences; or2(2) it would not be possible for the recognised body to comply with a direction under section 296 of the Act (FCA's3 power to give directions) or (for RAPs) regulation 3 of the RAP regulations;2 or 3(3) for some other reason, it would not be appropriate
The FCA3 would be likely to consider the conditions in REC 4.7.3 G (2) or REC 4.7.3 G (3) to be triggered1in the following circumstances:31(1) the recognised body appears not to have the resources or management to be able to organise its affairs so as to satisfy one or more of the recognised body requirements; or212(2) the recognised body does not appear to be willing to satisfy one or more of the recognised body requirements; or212(3) the recognised body is failing or has failed
In addition to the relevant 1factors set out in REC 4.7.4 G, the FCA3 will usually consider that it would not be able to secure an ROIE's3 compliance with the recognition requirements or other obligations in or under the Act by means of a direction under section 296 of the Act, if it appears to the FCA3 that the ROIE3 is prevented by any change in the legal framework or supervisory arrangements to which it is subject in its home territory from complying with the recognition 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
The Regulated Activities Order contains exclusions. Exclusions may exist in relation to both the element of investment and the element of activity. Each should therefore be checked carefully. The exclusions that relate to specified investments are considered in PERG 2.6, together with the outline of the specified investments. The exclusions that relate to activities are considered separately from the outline of activities (see PERG 2.8 and PERG 2.9).
It remains the Government's responsibility to ensure the proper implementation of MiFID2. Certain2persons subject to the requirements of MiFID2 must be brought within the scope of regulation under the Act. A core element of MiFID is the concept of investment firm.2 An investment firm is any person whose regular occupation or2 business is2 the provision of one or more2investment services to third parties or the performance of one or more investment activities on a professional
For persons who are MiFID2investment firms, the activities that must be caught by the Regulated Activities Order are those that are caught by MiFID2. To achieve this result, some of the exclusions in the Order (that will apply to persons who are not caught by MiFID2) have been made unavailable to MiFID2investment firms when they provide or perform investment services and activities. A "MiFID investment firm", for these purposes, includes credit institutions to which MiFID applies
The Insurance Mediation Directive has in part been implemented through various amendments to the Regulated Activities Order. These include article 4(4A) (Specified activities: general) which precludes a person who, for remuneration, takes up or pursues insurance mediation or reinsurance mediation in relation to a risk or commitment situated in an EEA State from making use of certain exclusions. In other cases, some of the exclusions provided in relation to particular regulated
(1) 7When deciding whether a person is a MiFID investment firm or a third country investment firm for the purposes of PERG 2.5.8G(1), it is necessary to take into account the services that that person is providing in relation to the product concerned.(2) For example, say that a UKperson does business in an option product to which PERG 2.5.7G applies. When deciding whether that product is a regulated option, it is not necessary for that person already to be:(a) a MiFID investment