Related provisions for PRIN 3.1.5

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To access the FCA Handbook Archive choose a date between 1 January 2001 and 31 December 2004 (From field only).

CASS 5.6.5RRP
A primary pooling event occurs:(1) on the failure of the firm; or(2) on the vesting of assets in a trustee in accordance with an 'assets requirement' imposed under 55P(1)(b) or (c) (as the case may be) of the Act; or(3) on the coming into force of a requirement for all client money held by the firm; or(4) when the firm notifies, or is in breach of its duty to notify, the FCA, in accordance with CASS 5.5.77 R1, that it is unable correctly to identify and allocate in its records
CONC 3.1.2GRP
Under section 39(3) of the Act, a firm is responsible for financial promotionscommunicated by its appointed representatives when acting as such.
DTR 1C.2.1RRP
(1) The FCA may dispense with, or modify, a requirement in DTR 8 in such cases and by reference to such circumstances as it considers appropriate (subject to the Act).(2) A dispensation or modification may be either unconditional or subject to specified conditions.(3) If a primary information provider or a person that is applying for approval as a primary information provider has applied for, or been granted, a dispensation or modification, it must notify the FCA immediately it
CREDS 10.1.3GRP

Module

Relevance to Credit Unions

The Principles for Businesses (PRIN)

The Principles for Businesses (PRIN) set out 3high-level requirements 3imposed by the FCA3. They provide a general statement of regulatory requirements. The Principles apply to all12credit unions. In applying the Principles to credit unions, the FCA3 will be mindful of proportionality. In practice, the implications are likely to vary according to the size and complexity 3of the credit union.

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Senior Management Arrangements, Systems and Controls (SYSC)

SYSC 1,3SYSC 4 to 10 and SYSC 213 apply to all credit unions in respect of the carrying on of their regulated activities and unregulated activities in a prudential context. SYSC 23 (Senior managers and certification regime: Introduction and classification), SYSC 24 (Senior managers and certification regime: Allocation of prescribed responsibilities), SYSC 25 (Senior managers and certification regime: Management responsibilities maps and handover procedures and material), SYSC 26 (Senior managers and certification regime: Overall and local responsibility), SYSC 27 (Senior managers and certification regime: Certification regime)7 and SYSC 18 apply to all credit unions in respect of both their regulated activities and their unregulated activities.

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3Code of Conduct (COCON)

This contains rules and guidance that are directly applicable to a credit union’sSMF managers, certification employees and (from 2017) other conduct rules staff. There is also guidance for credit unions on giving their staff training about COCON.

Threshold Conditions (COND)

In order to become authorised under the Act all firms must meet the threshold conditions. The threshold conditions must be met on a continuing basis by credit unions. Failure to meet one of the conditions is sufficient grounds for the exercise by the FCA3 of its powers.

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The Fit and Proper test for Employees and Senior Personnel7 (FIT)

The purpose of FIT is to set out and describe the criteria that a firm should3 consider when assessing the fitness and propriety of a person (1)3 in respect of whom an application is being made for approval to undertake a controlled function under the senior managers7 regime, (2)3 who has already been approved, (3) who is a certification employee or (4) whom a firm is considering appointing to be a certification employee3.

It also sets out and describes criteria that the FCA will consider when assessing the fitness and propriety of a candidate for a controlled function position and that it may consider when assessing the continuing fitness and propriety of approved persons.3

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General Provisions (GEN)

GEN contains rules and guidance on general matters, including interpreting the Handbook, statutory status disclosure, the FCA's3 logo and insurance against financial penalties.

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Fees manual (FEES)

This manual sets out the fees applying to credit unions.

3Prudential sourcebook for Mortgage and Home Finance Firms, and Insurance Intermediaries (MIPRU)

MIPRU applies to any credit union carrying out insurance distribution activity5 or home finance mediation activity, or using these services. In particular, it sets out requirements for allocation of responsibility for the credit union’sinsurance distribution activity5 (MIPRU 2), for the use of home finance intermediaries (MIPRU 5) and for professional indemnity insurance (MIPRU 3).

Conduct of Business sourcebook (COBS)

A credit union which acts as a CTF provider or provides a cash-deposit ISA will need to be aware of the relevant requirements in COBS. COBS 4.6 (Past, simulated past and future performance), COBS 4.7.1 R (Direct offer financial promotions), COBS 4.10 (Systems and controls and approving and communicating financial promotions), COBS 13 (Preparing product information) and COBS 14 (Providing product information to clients) apply with respect to accepting deposits as set out in those provisions, COBS 4.1 and BCOBS. A credit union that communicates with clients, including in a financial promotion, in relation to the promotion of deferred shares and credit union subordinated debt will need to be aware of the requirements of COBS 4.2 (Fair, clear and not misleading communications) and COBS 4.5 (Communicating with retail clients).4

3Insurance: Conduct of Business sourcebook (ICOBS)

ICOBS applies to any credit union carrying on non-investment insurance distribution5 activities, such as arranging or advising on general insurance contracts to be taken out by members. But ICOBS does not apply to a credit union taking out an insurance policy5 for itself, such as a policy5 against default by members on their loans where the credit union is the beneficiary of the policy5, since in this circumstance the credit union would not be acting as an insurance intermediary, but would itself be the customer. Credit unions are reminded that they are subject to the requirements of the appropriate legislation, including the Credit Unions Act 1979, relating to activities a credit union may carry on.

3Mortgages and Home Finance: Conduct of Business sourcebook (MCOB)

MCOB applies to any credit union that engages in any home finance activity. MCOB rules cover advising and selling standards, responsible lending (including affordability assessment), charges, and the fair treatment of customers in payment difficulties.

Banking: Conduct of Business sourcebook (BCOBS)

BCOBS sets out rules and guidance for credit unions on how they should conduct their business with their customers. In particular there are rules and guidance relating to communications with banking customers3and financial promotions (BCOBS 2), distance communications (BCOBS 3), information to be communicated to banking customers3(BCOBS 4), post sale requirements (BCOBS 5), and cancellation (BCOBS 6). 3The rules in BCOBS 3.1 that relate to distance contracts may apply 3to a credit union. This is because the Distance Marketing Directive3applies where there is "an organised distance sales or service-provision scheme run by the supplier" (Article 2(a)), i.e. if the credit union routinely sells any of its services by post, telephone, fax or the internet3.

Supervision manual (SUP)

The following provisions of SUP are relevant to credit unions: 13SUP 1A13 (The FCA’s 3 approach to supervision), SUP 2 (Information gathering by the FCA or PRA 3 on its own initiative), SUP 3.1 to SUP 3.8 (Auditors), SUP 5 (Skilled persons), SUP 6 (Applications to vary or cancel Part 4A12permission), SUP 7 (Individual requirements), SUP 8 (Waiver and modification of rules), SUP 9 (Individual guidance), 13SUP 10C (FCA senior managers7 regime for approved persons in SMCR firms7), SUP 11 (Controllers and Close links), SUP 15 (Notifications to the FCA or PRA 3) and SUP 16 (Reporting Requirements).

Credit unions are reminded that they are subject to the requirements of the Act and SUP 11 on close links, and are bound to notify the FCA3 of changes. It may be unlikely, in practice, that credit unions will develop such relationships. It is possible, however, that a person may acquire close links with a 3credit union3 within the meaning of the Act by reason of holding the prescribed proportion of deferred shares in the credit union.

In relation to SUP 16, credit unions are exempted from the requirement to submit annual reports of 3close links.

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3Consumer Credit sourcebook (CONC)

CONC contains rules that apply to firms carrying on credit-related regulated activities. PERG 2.7.19IG provides guidance on relevant exemptions. Most credit union lending is therefore outside the scope of CONC. However, subject to the constraints in the Credit Unions Act 1979 or the Credit Unions (Northern Ireland) Order 1985 (as relevant), credit unions may undertake credit-related regulated activities to which CONC does apply if the activity is carried out by way of business. This could include lending under a borrower-lender-supplier agreement, or debt adjusting or debt counselling where the credit union is not the lender. A credit union carrying on such activities should consider whether it requires permission to do so. Further information can be found on the FCA’s website.

Decision, Procedure and Penalties manual (DEPP)

DEPP is relevant to credit unions because it sets out:

(1) the FCA's12 decision-making procedure for giving statutory notices. These are warning notices, decision notices and supervisory notices (DEPP 1.2 to DEPP 5); and

(2) the FCA's12 policy with respect to the imposition and amount of penalties under the Act (see DEPP 6).

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Dispute Resolution: Complaints (DISP)

DISP sets out rules and guidance in relation to treating complainants fairly and the Financial Ombudsman Service.

Compensation (COMP)

COMP sets out rules relating to the scheme for compensating consumers when authorised firms are unable, or likely to be unable, to satisfy claims against them.12

6General guidance on Benchmark Administration, Contribution and Use (BENCH)

BENCH provides guidance about which parts of the Handbook are relevant to a firm when carrying out benchmark activities and when using a benchmark. It also provides guidance about the benchmarks regulation.

The Enforcement Guide (EG)

The Enforcement Guide (EG) describes the FCA's12 approach to exercising the main enforcement powers given to it by the Act and by other legislation.2

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Financial Crime Guide: A firm’s guide to countering financial crime risks (FCG) and Financial Crime Thematic Reviews (FCTR)8

FCG and FCTR provide8guidance on steps that a firm can take to reduce the risk that it might be used to further financial crime.

SUP 13.5.5GRP
A notice of intention3 (other than one to establish a branch or provide services in another EEA state under the auction regulation)7 may include activities within the scope of the relevant Single Market Directive which are not regulated activities (paragraphs 19(3) and 20(2) of Part III of Schedule 3 to the Act), although in the case of a MiFID investment firm a notice of intention may only include ancillary services which are to be carried on with one or more investment services
DEPP 6.7.6GRP
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
CASS 1.4.5GRP
(1) Although CASS does not apply directly to a firm's appointed representatives, a firm will always be responsible for the acts and omissions of its appointed representatives in carrying on business for which the firm has accepted responsibility (section 39(3) of the Act). In determining whether a firm has complied with any provision of CASS, anything done or omitted by a firm's1appointed representative (when acting as such) will be treated as having been done or omitted by the
SUP 10C.1.5GRP
(1) 2SUP 10C.1.4R reflects the provisions of section 59(8) of the Act and, where relevant, the Treaty.(2) It preserves the principle of Home State prudential regulation. (3) For an EEA SMCR firm5, the effect is to reserve to the Home State regulator the assessment of fitness and propriety of a person performing a function in the exercise of an EEA right. A member of the governing body, or the notified3UKbranchmanager, of an EEA SMCR firm5, acting in that capacity, will not, therefore,
MAR 1.4.4GRP
Disclosure of inside information which is required or permitted by Part 6 rules (or any similar regulatory obligation) may5not amount to unlawful disclosure5 .
APER 2.1A.3RRP

1Statements of Principle issued under section 64A(1)(a) of the Act

Statement of Principle 1

An approved person must act with integrity in carrying out his accountable functions.

Statement of Principle 2

An approved person must act with due skill, care and diligence in carrying out his accountable functions.

Statement of Principle 3

An approved person must observe proper standards of market conduct in carrying out his accountable functions.

Statement of Principle 4

An approved person must deal with the FCA, the PRA and other regulators in an open and cooperative way and must disclose appropriately any information of which the FCA or the PRA would reasonably expect notice.

Statement of Principle 5

An approved person performing an accountable higher management function1 must take reasonable steps to ensure that the business of the firm for which they are 1responsible in their 1accountable function is organised so that it can be controlled effectively.

Statement of Principle 6

An approved person performing an accountable higher management function1 must exercise due skill, care and diligence in managing the business of the firm for which they are1 responsible in their 1accountable function.

Statement of Principle 7

An approved person performing an accountable higher management function1 must take reasonable steps to ensure that the business of the firm for which they are 1responsible in their 1accountable function complies with the relevant requirements and standards of the regulatory system.

SUP 12.7.3AGRP
Where a notification is linked to an application for approval under section 59 of the Act (Approval for particular arrangements), see SUP 10A.13.7 G21.121
PERG 8.29.7GRP

1Typical recommendations and whether they will be regulated as advising on investments (except P2P agreements)3 under article 53(1)3 of the Regulated Activities Order. This table belongs to PERG 8.29.1 G to PERG 8.29.6 G.2

Recommendation

Regulated under article 53(1)3 or not?

I recommend that you take out the ABC investment.

Yes. This is advice which steers the client in the direction of a particular investment which the client could buy.

I recommend that you do not take out the ABC investment.

Yes. This is advice which steers the client away from a particular investment which the client could have bought.

I recommend that you take out either the ABC investment or the DEF investment.

Yes. This is advice which steers the client in the direction of more than one particular investment which the client could buy.

I recommend that you sell your ABC investment.

Yes. This is advice which steers the client in the direction of a particular investment which the client could sell.

I recommend that you do not sell your ABC investment.

Yes. This is advice which steers the client away from a particular investment which the client could have sold.

I recommend that you transfer ownership of your ABC investment to your spouse.

Advising the client to gift an investment to another person will not be advice because it does not involve advice on buying, selling, subscribing for or underwriting an investment.

I recommend that you increase the regular payments you are making to your GHI fund*.

Yes. This is advice which steers the client in the direction of acquiring further units in a particular fund.

I recommend that you decrease the regular payments you are making to your GHI fund*.

Yes. This is advice which steers the client in the direction of acquiring further units in a particular fund but advises against the client buying as many as he intended.

I recommend that you keep making the same regular payments to your GHI fund*.

Yes. This is advice which steers the client in the direction of acquiring further units in a particular fund.

I recommend that you stop making the regular payments you are making to the GHI fund*.

Yes. This is advice which steers the client away from buying units in a particular fund which the client could have bought.

I recommend that you pay a lump sum into your GHI fund*.

Yes. This is advice which steers the client in the direction of acquiring further units in a particular fund.

I recommend that you do not pay a lump sum into your GHI fund*.

Yes. This is advice which steers the client away from buying units in a particular fund which the client could have bought.

I recommend that you move part of your investment in the JKL investment from fund X into fund Y*.

Yes. This is advice which steers the client in the direction of selling units in a particular fund and buying units in another specific fund. Where the two funds are sub-funds of the same main fund it is still advice. The terms ‘bought’ and ‘sold’ are given a wide meaning and include any acquisition or disposal for valuable consideration.

I recommend that you move all of your investment in JKL investment from fund X into fund Y*.

Yes, for the same reason.

4I recommend that you keep your investment in fund X*.

Yes. This is advice because it is advice to hold on to an investment and advice not to sell it.

I recommend that you move your MNO investment from platform X and re-register it on platform Y.

This is unlikely to be advice because normally it will not involve buying and selling the investment held on the platform.

A client decides of his own accord to increase, decrease or temporarily suspend his regular payments or the payments are increased automatically into an investment without advice being given.

No. No advice is being given.

The firm is providing discretionary management services under a mandate and makes changes to a client'sinvestment without providing advice.

No. No advice is being given.

Dividends are re-invested into an investment without advice being given.

No. No advice is being given.

* The same answer would apply where the fund is a life policy as rights under a contract of insurance are regulated investments under the Act. The position under a personal pension scheme is similar, as explained in more detail in PERG 12.3.

SUP 16.2.1GRP
(1) In order to discharge its functions under the Act, the FCA1 needs timely and accurate information about firms. The provision of this information on a regular basis enables the FCA1 to build up over time a picture of firms' circumstances and behaviour.777(2) Principle 11 requires a firm to deal with its regulators in an open and cooperative way, and to disclose to the FCA1 appropriately anything relating to the firm of which the FCA1 would reasonably expect notice. The reporting
REC 4.4.2GRP
The Act does not provide a mechanism for appeals to the FCA2 from decisions by recognised bodies in relation to complaints. However, the FCA2 is required by section 299 of the Act (Complaints about recognised bodies) to have arrangements to investigate complaints (called relevant complaints in the Act) which it considers relevant to the question of whether a recognised body should remain recognised as such. This section describes aspects of the FCA's2 arrangements for investigating
SYSC 4.7.7RRP

[deleted] [Editor’s note: The text of this provision has been moved to SYSC 24.2.6R]6

LR 9.2.6RRP
A listed company that is not already required to comply with the obligations referred to under article 17 of the Market Abuse Regulation12 must comply with those obligations12 as if it were an issuer for the purposes of the disclosure requirements12 and transparency rules subject to article 22 of the Market Abuse Regulation12.1
SUP 16.1.4GRP
(1) This chapter contains requirements to report to the FCA37 on a regular basis. These requirements include reports relating to a firm's financial condition, and to its compliance with other rules and requirements which apply to the firm. Where the relevant requirements are set out in another section of the Handbook, this chapter contains cross references. An example of this is financial reporting for insurers and friendly societies.6666(2) Where such requirements already apply
EG App 2.1.9RP
2The following are indicators of whether action by the FCA or one of the other agencies is more appropriate. They are not listed in any particular order or ranked according to priority. No single feature of the case should be considered in isolation, but rather the whole case should be considered in the round.(a) 2 Tending towards action by the FCAWhere the suspected conduct in question gives rise to concerns regarding market confidence or protection of consumers of services regulated