Related provisions for PERG 8.14.34

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CASS 7.11.52ERP
(1) Taking reasonable steps in CASS 7.11.50 R (3) includes following this course of conduct:(a) determining, as far as reasonably possible, the correct contact details for the relevant client;(b) writing to the client at the last known address either by post or by electronic mail to inform it of the firm's intention to no longer treat the client money balance as client money and to pay the sums concerned to charity if the firm does not receive instructions from the client within
CASS 7.11.54RRP
(1) Where a firm wishes to release a balance allocated to an individual client under CASS 7.11.50 R it must comply with either (a) or (b) and, in either case, (2):(a) the firm must unconditionally undertake to pay to the client concerned a sum equal to the balance paid away to charity in the event of the client seeking to claim the balance in future; or(b) the firm must ensure that an unconditional undertaking in the terms set out in (a) is made by a member of its group and there
CASS 7.11.55RRP
(1) If a firm pays away client money under CASS 7.11.50 R (4) it must make and retain, or where the firm already has such records, retain: (a) records of all balances released from client bank accounts under CASS 7.11.50 R (including details of the amounts and the identity of the client to whom the money was allocated); (b) all relevant documentation (including charity receipts); and(c) details of the communications the firm had or attempted to make with the client concerned pursuant
CASS 6.2.11ERP
(1) 6Taking reasonable steps in CASS 6.2.10R (4) includes following this course of conduct:(a) determining, as far as reasonably possible, the correct contact details for the relevant client;(b) writing to the client at the last known address either by post or by electronic mail to inform it: (i) of the name of the firm with which the client first deposited the safe custody asset in question; (ii) of the firm's intention to pay the safe custody asset to charity under CASS 6.2.10
CASS 6.2.14RRP
6Where a firm divests itself of a client'ssafe custody asset under CASS 6.2.10 R, it must comply with either (1)(a) or (1)(b) and, in either case, (2).(1) (a) The firm must unconditionally undertake to pay to the client concerned a sum equal to the value of the safe custody asset at the time it was liquidated or paid away in the event of the client seeking to claim the safe custody asset in future.(b) The firm must ensure that an unconditional undertaking in the terms set out
CASS 6.2.15RRP
(1) 6If a firm pays away a client's unclaimed safe custody assets to charity or liquidates a client's unclaimed safe custody assets and pays the proceeds to charity under CASS 6.2.10 R it must make and retain, or where the firm already has such records, retain:(a) records of all safe custody assets divested under CASS 6.2.10 R (including details of the value of each asset at that time and the identity of the client to whom the asset was allocated); (b) all relevant documentation
CASS 7A.2.4RRP
If a primary pooling event occurs, then4:(1) (a) in respect of a sub-pool,4 the following is treated as a single notional pool of client money for the beneficiaries of that pool:45(i) any client money held in a client bank account of the firm relating to that sub-pool; and5(ii) any client money held in a client transaction account of the firm relating to that sub-pool, except for client money held in a client transaction account at an authorised central counterparty3 or a clearing
CASS 7A.2.4AGRP
(1) 1Under EMIR, where a firm that is a clearing member4 of an authorised central counterparty defaults, the authorised central counterparty may:4(a) portclient positions where possible; and(b) after the completion of the default management process:(i) return any balance due directly to those clients for whom the positions are held, if they are known to the authorised central counterparty; or(ii) remit any balance to the firm for the account of its clients if the clients are
CASS 7A.2.5RRP
(-2) (a) Subject to paragraph (-2)(b), each client’s entitlement to client money in a notional pool is calculated with reference to the client money requirement as shown by an internal client money reconciliation carried out in accordance with CASS 7.15.15R(4)(a) (Internal client money reconciliations) as at the primary pooling event.7(b) If, as at the primary pooling event, the firm had entered in to one or more cleared margined transactions through the use of a client transaction
CASS 7A.2.5AGRP
(1) (a) 7The effect of CASS 7A.2.5R(-2)(b) is that the client equity balance for the relevant cleared margined transaction is with reference to the eventual close out or ‘hindsight’ value of the transaction, instead of being a notional balance as at the primary pooling event under CASS 7.16.28R.(b) CASS 7A.2.5R(-2)(b) applies in respect of cleared margined transactions that a firm had entered into for any client, including for indirect clients where the firm is itself a client
CASS 7.19.1GRP
(1) 1Under CASS 7.17.2R(2)2, a firm acts as trustee for all client money received or held by it for the benefit of the clients for whom that client money is held, according to their respective interests in it.(2) A firm that is also a clearing member of an authorised central counterparty may wish to segregate client money specifically for the benefit of a group of clients who have chosen to clear positions through a net margined omnibus client account maintained by the firm with
EG 16.2.5RP
1When it decides whether to exercise its power to disapply an exemption from the general prohibition in relation to a member, the FCA will take into account all relevant circumstances which may include, but are not limited to, the following factors: (1) Disciplinary or other action taken by the relevant designated professional body, where that action relates to the fitness and propriety of the member concerned: where the FCA considers that its concerns in relation to the fitness
CASS 5.1.4ARRP
(1) 3A firm will, subject to (3), be deemed to comply with CASS 5.3 to CASS 5.6 if it receives or holds client money and it either:2(a) in relation to a service charge, complies with the requirement to segregate such money in accordance with section 42 of the Landlord and Tenant Act 1987 ("the 1987 Act"); or2(b) in relation to money which is clients' money for the purpose of the Royal Institution of Chartered Surveyors' Rules of Conduct ("RICS rules") in force as at 14 January
CASS 7A.3.8ARRP
3If a secondary pooling event occurs as a result of the failure of an authorised central counterparty: (1) any money held in a client transaction account that is an individual client account at the failedauthorised central counterparty is not pooled by the firm with any of its other client money;(2) any money held in a client transaction account that is an omnibus client account at the failedauthorised central counterparty is not pooled by the firm with any of its other client
EG 16.4.2RP
1A disapplication order in relation to exempt regulated activities made against a member will be relevant should that member subsequently apply for authorisation under the Act. Whether or not such an application for authorisation is successful will depend on many factors, including the FCA's grounds for making the disapplication order. For example, if the order for disapplication of the exemption was made on the grounds of a breach of rules made under section 332(1) of the Act,
REC 3.23.1RRP
Where a UK RIE2 decides to put a member into default, it must immediately give notice of that event, and give the following information to the FCA2, at the same time as that decision is communicated to that member or to any other member (or group or class of them) of that body: 22(1) the name of the member and (where relevant) the class of membership; (2) the reasons for that decision; and(3) the names of any other exchange,1clearing house or auction platform 1on which, to the
SYSC 7.1.18RRP
(1) 13A CRR firm that is significant must establish a risk committee composed of members of the management body who do not perform any executive function in the firm. Members of the risk committee must have appropriate knowledge, skills and expertise to fully understand and monitor the risk strategy and the risk appetite of the firm.(2) The risk committee must advise the management body on the institution’s overall current and future risk appetite and assist the management body
PRIN 1.2.6GRP
If the person with or for whom the firm is carrying on an activity is acting through an agent, the ability of the firm to treat the agent as its client under COBS 2.4.3 R3 (Agent as client) will not be available. For example, if a general insurer is effecting a general insurance contract through a general insurance broker who is acting as agent for a disclosed policyholder, the policyholder will be a client of the firm and the firm must comply with the Principles accordingly.
COCON 1.1.10RRP
(1) This rule applies to members of a firm’sconduct rules staff apart from conduct rules staff in COCON 1.1.9R. 6522(2) Subject to (3), COCON only applies to the conduct of persons to whom this rule applies (as set out in (1)) if that conduct:6(a) 6is performed from an establishment maintained in the United Kingdom by:(i) (for a relevant authorised person) that person’semployer; or(ii) (for a Solvency II firm or a small non-directive insurer8) the firm in relation to whom that
REC 2.5.1UKRP

Schedule to the Recognition Requirements Regulations, paragraphs 3 – 3H4

Paragraph 3 – Systems and controls4

(1)

The [UK RIE] must ensure that the systems and controls, including procedures and arrangements,4 used in the performance of its functions and the functions of the trading venues it operates are adequate, effective4 and appropriate for the scale and nature of its business.

(2)

Sub-paragraph (1) applies in particular to systems and controls concerning -

(a)

the transmission of information;

(b)

the assessment, mitigation and management of risks to the performance of the [UK RIE'srelevant functions];

(c)

the effecting and monitoring of transactions on the [UK RIE];

(ca)

the technical operation of the [UK RIE], including contingency arrangements for disruption to its facilities;

(d)

the operation of the arrangements mentioned in paragraph 4(2)(d); and

(e)

(where relevant) the safeguarding and administration of assets belonging to users of the [UK RIE's] facilities.

4(f)

the resilience of its trading systems;

4[Note:MiFID RTS 7 contains requirements on the resilience of trading systems operated by trading venues that enable algorithmic trading]

4(g)

the ability to have sufficient capacity to deal with peak order and message volumes;

4[Note:MiFID RTS 7 contains requirements on the adequacy of capacity of trading systems operated by trading venues that enable algorithmic trading]

4(h)

the ability to ensure orderly trading under conditions of severe market stress;

4(i)

the effectiveness of business continuity arrangements to ensure the continuity of the [UK RIE’s] services if there is any failure of its trading systems including the testing of the [UK RIE’s] systems and controls;

4(j)

the ability to reject orders that exceed predetermined volume or price thresholds or which are clearly erroneous;

4(k)

the ability to ensure algorithmic trading systems cannot create or contribute to disorderly trading conditions on trading venues operated by the [UK RIE];

4(l)

the ability to ensure disorderly trading conditions which arise from the use of algorithmic trading systems, including systems to limit the ratio of unexecuted orders to transactions that may be entered into the [UK RIE’s] trading system by a member or participant are capable of being managed;

[Note:MiFID RTS 9 contains requirements on the ratio of unexecuted orders to transactions to be taken into account by a trading venue that operates electronic continuous auction order book, quote-driven or hybrid trading systems]

4(m)

the ability to ensure the flow of orders is able to be slowed down if there is a risk of system capacity being reached;

4(n)

the ability to limit and enforce the minimum tick size which may be executed on its trading venues; and

4(o)

the requirement for members and participants to carry out appropriate testing of algorithms.

4[Note:MiFID RTS 7 contains requirements on the appropriate testing of algorithms to ensure that trading systems, when they enable algorithmic trading, cannot create or contribute to disorderly trading conditions]

4(3)

For the purposes of sub-paragraph 2(c), the [UK RIE] must -

4(a)

establish and maintain effective arrangements and procedures including the necessary resource for the regular monitoring of the compliance by members or participants with its rules; and

4(b)

monitor orders sent including cancellations and the transactions undertaken by its members or participants under its systems in order to identify infringements of those rules, disorderly trading conditions or conduct that may indicate behavior that is prohibited under the market abuse regulation or system disruptions in relation to a financial instrument.

4(4)

For the purpose of sub-paragraph (2)(o) the [UK RIE] must provide environments to facilitate such testing.

4(5)

The [UK RIE] must be adequately equipped to manage the risks to which it is exposed, to implement appropriate arrangements and systems to identify all significant risks to its operation, and to put in place effective measures to mitigate those risks.

4Paragraph 3A – Market making arrangements

4(1)

The [UK RIE] must -

4(a)

have written agreements with all investment firms pursuing a market making strategy on trading venues operated by it (“market making agreements”);

4(b)

have schemes, appropriate to the nature and scale of a trading venue, to ensure that a sufficient number of investment firms enter into such agreements which require them to post firm quotes at competitive prices with the result of providing liquidity to the market on a regular and predictable basis;

4(c)

monitor and enforce compliance with the market making agreements;

4(d)

inform the FCA of the content of its market making agreements; and

4(e)

provide the FCA with any information it requests which is necessary for the FCA to satisfy itself that the market making agreements comply with paragraphs (c) and (d) of this sub-paragraph and sub-paragraph 2.

4(2)

A market making agreement must specify-

4(a)

the obligations of the investment firm in relation to the provision of liquidity;

4(b)

where applicable, any obligations arising from the participation in a scheme mentioned in sub-paragraph (1)(b);

4(c)

any incentives in terms of rebates or otherwise offered by the [UK RIE] to the investment firm in order for it to provide liquidity to the market on a regular and predictable basis; and

4(d)

where applicable, any other rights accruing to the investment firm as a result of participation in the scheme referred to in sub-paragraph (1)(b).

4(3)

For the purposes of this paragraph, an investment firm pursues a market making strategy if -

4(a)

the firm is a member or participant of one or more trading venues;

4(b)

the firm’s strategy, when dealing on own account, involves posting firm, simultaneous two-way quotes of comparable size at competitive prices relating to one or more financial instruments on a single trading venue, across different trading venues; and

4(c)

the result is providing liquidity on a regular and frequent basis to the overall market.

4Paragraph 3B – Halting trading

4(1)

The [UK RIE] must be able to -

4(a)

temporarily halt or constrain trading on any trading venue operated by it if there is a significant price movement in a financial instrument on such a trading venue or a related trading venue during a short period; and

4(b)

in exceptional cases be able to cancel, vary, or correct any transaction.

4(2)

For the purposes of sub-paragraph (1), the [UK RIE] must ensure that the parameters for halting trading are appropriately calibrated in a way which takes into account -

4(a)

the liquidity of different asset classes and subclasses;

4(b)

the nature of the trading venue market model; and

4(c)

the types of users,

4to ensure the parameters are sufficient to avoid significant disruptions to the orderliness of trading.

4(3)

The [UK RIE] must report the parameters mentioned in sub-paragraph (2) and any material changes to those parameters to the FCA in a format to be specified by the FCA.

4(4)

If a trading venue operated by the [UK RIE] is material in terms of liquidity of the trading of a financial instrument and it halts trading in an EEA State in that instrument it must have systems and procedures in place to ensure that it notifies the FCA.

4[Note:MiFID RTS 12 contains requirements for when a regulated market is material in terms of liquidity in a financial instrument for purposes of trading halt notifications]

4Paragraph 3C – Direct electronic access

4Where the [UK RIE] permits direct electronic access to a trading venue it operates, it must -

4(1)

(a)

ensure that a member of, or participant in that trading venue is only permitted to provide direct electronic access to the venue if the member or participant -

4(i)

is an investment firm, as defined by Article 4.1.1 of the markets in financial instruments directive (definitions), authorised in accordance with the directive;

4(ii)

is a credit institution authrised in accordance with the capital requirements directive;

4(iii)

comes within Article 2.1(a), (e), (i), or (j) of the markets in financial instruments directive (exemptions) and has a Part 4A permission relating to investment services and activities;

4(iv)

is a third country firm providing the direct electronic access in the course of exercising rights under Article 46.1 (general provisions) or 47.3 (equivalence decision) of the markets in financial instruments regulation;

4(v)

is a third country firm and the provision of the direct electronic access by that firm is subject to the exclusion in Article 72 of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001; or

4(vi)

is a third country firm which does not come within paragraph (iv) or (v) and is otherwise permitted to provide the direct electronic access under the Act;

4(b)

ensure that appropriate criteria are set and applied for the suitability of persons to whom direct electronic access services may be provided;

4(c)

ensure that a member of, or participant in, the trading venue retains responsibility for adherence to the requirements of the markets in financial instruments directive in respect of orders and trades executed using the direct electronic access service;

4(d)

set appropriate standards regarding risk controls and thresholds on trading through direct electronic access;

4(e)

be able to distinguish and if necessary stop orders or trading on that trading venue by a person using direct electronic access separately from -

4(i)

other orders; or

4(ii)

trading by the member or participant providing the direct electronic access; and

4(f)

have arrangements in place to suspend or terminate the provision to a client of direct electronic access to that trading venue by a member of, or participant in, the trading venue in the case of non-compliance with this paragraph.

4[Note:MiFID RTS 7 contains requirements on direct electronic access permitted through a trading venue’s systems]

4Paragraph 3D – Co-location services

4(1)

The [UK RIE’s] rules on colocation services must be transparent, fair and nondiscriminatory.

4[Note:MiFID RTS 10 contains requirements to ensure co-location services are transparent, fair and non-discriminatory]

4Paragraph 3E – Fee structures

4(1)

The [UK RIE’s] fee structure, for all fees it charges including execution fees and ancillary fees and rebates it grants, must -

4(a)

be transparent, fair and non-discriminatory;

4[Note:MiFID RTS 10 contains requirements to ensure fee structures are transparent, fair and non-discriminatory]

4(b)

not create incentives to place, modify or cancel orders, or execute transactions, in a way which contributes to disorderly trading conditions or market abuse; and

4[Note:MiFID RTS 10 contains requirements concerning prohibited fee structures]

4(c)

impose market making obligations in individual shares or suitable baskets of shares for any rebates that are granted.

4(2)

Nothing in sub-paragraph (1) prevents the [UK RIE] from -

4(a)

adjusting its fees for cancelled orders according to the length of time for which the order was maintained;

4(b)

calibrating its fees to each financial instrument to which they apply;

4(c)

imposing a higher fee -

4(i)

for placing an order which is cancelled than an order which is executed;

4(ii)

on participants placing a high ratio of cancelled orders to executed orders; or

4(iii)

on a person operating a high-frequency algorithmic trading technique,

4in order to reflect the additional burden on system capacity.

4Paragraph 3F – Algorithmic trading

4(1)

The [UK RIE] must require members of and participants in trading venues operated by it to flag orders generated by algorithmic trading in order for it to be able to identify the -

4(a)

the different algorithms used for the creation of orders; and

4(b)

the persons initiating those orders.

4Paragraph 3G – Tick size regimes

4(1)

The [UK RIE] must adopt tick size regimes in respect of trading venues operated by it in -

4(a)

shares, depositary receipts, exchange-traded funds, certificates and other similar financial instruments traded on each trading venue; and

4[Note:MiFID RTS 11 contains requirements on the tick size regime for shares, depositary receipts, exchange traded funds and certificates5]

4(b)

any financial instrument for which regulatory technical standards are adopted by the European Commission pursuant to Article 49.3 or 4 of the markets in financial instruments directive which is traded on that trading venue.

[Note:MiFID RTS 11]

4 (2)

The tick size regime must -

4(a)

be calibrated to reflect the liquidity profile of the financial instrument in different markets and the average bid-ask spread taking into account desirability of enabling reasonably stable prices without unduly constraining further narrowing of spreads; and

4(b)

adapt the tick size for each financial instrument appropriately.

4(3)

The tick size regime must comply with any regulatory technical standards adopted by the European Commission pursuant to Article 49.3 or 4 of the markets in financial instruments directive.

4[Note:MiFID RTS 11]

4Paragraph 3H – Syncronisation of business clocks

4(1)

The [UK RIE] must synchronise the business clocks it uses to record the date and time of any reportable event in accordance with regulatory technical standards adopted by the European Commission pursuant to Article 50 of the markets in financial instruments directive.

4[Note:MiFID RTS 25]