Related provisions for SUP 18.3.5

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EG 13.4.2RP
1In determining whether it is appropriate to seek an insolvency order on this basis, the FCA will consider the facts of each case including, where relevant: (1) whether the company or partnership has taken or is taking steps to deal with its insolvency, including petitioning for its own administration, placing itself in voluntary winding up or proposing to enter into a company voluntary arrangement, and the effectiveness of those steps; (2) whether any consumer or other creditor
APER 1.1A.4GRP
[deleted]641
SYSC 4.4.6GRP

Frequently asked questions about allocation of functions in SYSC 4.4.5 R

Question

Answer

1

Does an individual to whom a function is allocated under SYSC 4.4.5 R need to be an approved person13?

8

Yes. They13 will be performing the limited scope function13.

However, the limited scope function does not apply to an EEA SMCR firm (except claims management firms) or an authorised professional firm that is a core SMCR firm.1313

171717178

2

If the allocation is to more than one individual, can they perform the functions, or aspects of the functions, separately?

If the functions are allocated to joint chief executives under SYSC 4.4.5 R, column 2, they are expected to act jointly. If the functions are allocated to an individual under SYSC 4.4.5 R, column 2, in addition to individuals under SYSC 4.4.5 R, column 3, the former may normally be expected to perform a leading role in relation to the functions that reflects his position. Otherwise, yes.

3

What is meant by "appropriately allocate" in this context?

The allocation of functions should be compatible with delivering compliance with Principle 3, SYSC 4.4.3 R and SYSC 4.1.1 R. The FCA13 considers that allocation to one or two individuals is likely to be appropriate for most firms.

4

If a committee of management governs a firm or group, can the functions be allocated to every member of that committee?

Yes, as long as the allocation remains appropriate (see Question 3). If the firm also has an individual as chief executive, then the functions must be allocated to that individual as well under SYSC 4.4.5 R, column 2 (see Question 7).

5

Does the definition of chief executive include the possessor of equivalent responsibilities with another title, such as a managing director or managing partner?

Yes.

6

Is it possible for a firm to have more than one individual as its chief executive?

Although unusual, some firms may wish the responsibility of a chief executive to be held jointly by more than one individual. In that case, each of them will be a chief executive and the functions must be allocated to all of them under SYSC 4.4.5 R, column 2 (see also Questions 2 and 7).

7

If a firm has an individual as chief executive, must the functions be allocated to that individual?

Normally, yes, under SYSC 4.4.5 R, column 2.

But if the firm is a body corporate and a member of a group, the functions may, instead of being allocated to the firm'schief executive, be allocated to a director or senior manager from the group responsible for the overall management of the group or of a relevant group division, so long as this is appropriate (see Question 3). Such individuals may nevertheless require approval under section 59 (see Question 1).

If the firm chooses to allocate the functions to a director or senior manager responsible for the overall management of a relevant group division, the FCA13 would expect that individual to be of a seniority equivalent to or greater than a chief executive of the firm for the allocation to be appropriate.

See also Question 14.

8

If a firm has a chief executive, can the functions be allocated to other individuals in addition to the chief executive?

Yes. SYSC 4.4.5 R, column 3, permits a firm to allocate the functions, additionally, to the firm's (or where applicable the group's) directors and senior managers as long as this is appropriate (see Question 3).

9

What if a firm does not have a chief executive?

Normally, the functions must be allocated to one or more individuals selected from the firm's (or where applicable the group's) directors and senior managers under SYSC 4.4.5 R, column 3.

But if the firm:

(1) is a body corporate and a member of a group; and

(2) the group has a director or senior manager responsible for the overall management of the group or of a relevant group division;

then the functions must be allocated to that individual (together, optionally, with individuals from column 3 if appropriate) under SYSC 4.4.5 R, column 2.

10

What do you mean by "group division within which some or all of the firm's regulated activities fall"?

A "division" in this context should be interpreted by reference to geographical operations, product lines or any other method by which the group's business is divided.

If the firm's regulated activities fall within more than one division and the firm does not wish to allocate the functions to its chief executive, the allocation must, under SYSC 4.4.5 R, be to:

(1) a director or senior manager responsible for the overall management of the group; or (2) a director or senior manager responsible for the overall management of one of those divisions;

together, optionally, with individuals from column 3 if appropriate. (See also Questions 7 and 9.)

11

How does the requirement to allocate the functions in SYSC 4.4.5 R apply to an overseas SMCR firm13 which is not an EEA SMCR firm13?

The firm must appropriately allocate those functions to one or more individuals, in accordance with SYSC 4.4.5 R, but:

(1) The responsibilities that must be apportioned and the systems and controls that must be overseen are those relating to activities carried on from a UK establishment with certain exceptions (see SYSC 1 Annex 1 2.15R13).

(2) The chief executive of an overseas firm is the person responsible for the conduct of the firm's business within the United Kingdom (see the definition of "chief executive"). This might, for example, be the manager of the firm'sUK establishment, or it might be the chief executive of the firm as a whole, if he has that responsibility.

13(3) SYSC 4.4 does not apply to such a firm if it does not have a branch in the United Kingdom.

12

How does the requirement to allocate the functions in SYSC 4.4.5 R apply to an EEA SMCR firm other than a claims management firm13?

(1) Such a firm is not required to allocate the function of dealing with apportionment in SYSC 4.4.5R (1).

(2) Such a firm is required to allocate the function of oversight in SYSC 4.4.5R (2). 15

(3) Such a firm need not allocate the function of oversight to its chief executive; it must allocate it to one or more directors and senior managers of the firm or the firm'sgroup under SYSC 4.4.5 R, row (2).

(4) SYSC 4.4 does not apply to an EEA PTV firm if it does not have a branch in the United Kingdom15.

See also Question 1.15

1313

13

What about a firm that is a partnership or a limited liability partnership?

The FCA13 envisages that most if not all partners or members will be either directors or senior managers, but this will depend on the constitution of the partnership (particularly in the case of a limited partnership) or limited liability partnership. A partnership or limited liability partnership may also have a chief executive (see Question 5). A limited liability partnership is a body corporate and, if a member of a group, will fall within SYSC 4.4.5 R, row (1) or (2).

14

What if generally accepted principles of good corporate governance recommend that the chief executive should not be involved in an aspect of corporate governance?

The Note to SYSC 4.4.5 R provides that the chief executive or other executive director or senior manager need not be involved in such circumstances. For example, the UK Corporate Governance Code5 recommends that the board of a listed company should establish an audit committee of independent,9 non-executive directors to be responsible (among other things) for overseeing the effectiveness9 of the audit process and the objectivity and independence of the external auditor9. That aspect of the oversight function may therefore be allocated to the members of such a committee without involving the chief executive. Such individuals may require approval under section 59 in relation to that function (see Question 1).

5

15

[deleted]15

 13
SUP 16.18.3GRP
This section specifies the end dates for reporting periods for AIFMs and the reporting period for small AIFMs for the types of AIFM to whom this section applies. Although article 110 of the AIFMD level 2 regulations (Reporting to competent authorities) (as replicated in SUP 16.18.4UK5) applies certain reporting requirements directly to AIFMs, it does not specify the end dates for reporting periods for an AIFM and, for small AIFMs, it does not specify the reporting period. Therefore,
EG 19.36.16RP
1The Packaged Retail and Insurance-based Investment Products Regulations apply section 169 of the Act which requires the FCA to publish a statement of policy on the conduct of certain interviews in response to requests from overseas regulators. For the purposes of the Packaged Retail and Insurance-based Investment Products Regulations the FCA will follow the procedures described in DEPP 7.
DISP App 3.1.2GRP
At step 1, the3 aspects of complaint handling dealt with in this appendix are how the firm should:(1) assess a complaint in order to establish whether the firm's conduct of the sale failed to comply with the rules, or was otherwise in breach of the duty of care or any other requirement of the general law (taking into account relevant materials published by the FCA, other relevant regulators, the Financial Ombudsman Service and former schemes). In this appendix this is referred
LR 8.4.1RRP
LR 8.4.2 R to LR 8.4.4 G2 apply in relation to an application for admission of securities11 to premium listing65if an applicant does not have securities11 already admitted to premium listing ,68 the conditions in LR 6.1.1R(1), LR 6.1.1R(2), LR 21.2.5R(1), LR 21.2.5R(2), LR 21.6.13R(1) or LR 21.6.13R(2)11 do not apply and8, in connection with the application, the applicant is required to publish a document under article 1(4)(f) or (g) or (5)(e) or (f) of the Prospectus Regulation
EG App 3.1.1RP
3The FCA is the single statutory regulator for all financial business in the UK. Its strategic objective under the Financial Services and Markets Act 2000 (the 2000 Act) is to ensure that the relevant markets function well. The FCA's operational objectives are: securing an appropriate degree of protection for consumers;protecting and enhancing the integrity of the UK financial system; andpromoting effective competition in the interests of consumers in the markets.(Note: The 2000
COLL 11.6.2RRP
(1) The commencement of winding up of a UCITS scheme that is a master UCITS must take place no sooner than 3 months after a notification is made to its unitholders and the FCA3 informing it3 of the binding decision to wind up the master UCITS.(2) Paragraph (1) is without prejudice to any provision of the insolvency legislation in force in the United Kingdom regarding the compulsory liquidation of AUTs, ACSs1 or ICVCs.[Note: article 60(4) last sentence of the UCITS Directive]
REC 2.9.3GRP
In determining whether a UK recognised body has satisfactory arrangements for recording the transactions effected on its facilities,3 or cleared or to be cleared by another person3 by means of, its facilities, the FCA3 may have regard to:3(1) whether the UK recognised body has arrangements for creating, maintaining and safeguarding an audit trail of transactions for at least five years4; and(2) the type of information recorded and the extent to which the record includes4: (a)
DEPP 6.5A.3GRP
(1) The FCA2 may increase or decrease the amount of the financial penalty arrived at after Step 2, but not including any amount to be disgorged as set out in Step 1, to take into account factors which aggravate or mitigate the breach. Any such adjustments will be made by way of a percentage adjustment to the figure determined at Step 2.2(2) The following list of factors may have the effect of aggravating or mitigating the breach:(a) the conduct of the firm in bringing (or failing
EG 4.7.1RP
2The FCA's standard practice is generally to use statutory powers to require the production of documents, the provision of information or the answering of questions in interview. This is for reasons of fairness, transparency and efficiency. It will sometimes be appropriate to depart from this standard practice, for example: (1) For suspects or possible suspects in criminal or market abuse investigations, the FCA may prefer to question that person on a voluntary basis, possibly
SUP 3.2.1GRP
This chapter sets out rules and guidance on the role auditors play in the appropriate regulator's monitoring of firms' compliance with the requirements and standards under the regulatory system. In determining whether a firm satisfies the threshold conditions, the appropriate regulator has regard to whether the firm has appointed auditors with sufficient experience in the areas of business to be conducted by the firm. Auditors act as a source of information for the appropriate
DISP 1.1A.21GRP
Factors that may be relevant in the assessment of a MiFID complaint under DISP 1.1A.20R(2) include the following: (1) all the evidence available and the particular circumstances of the complaint;(2) similarities with other complaints received by the respondent; (3) relevant guidance published by the FCA, other relevant regulators, the Financial Ombudsman Service or former schemes; and (4) appropriate analysis of decisions by the Financial Ombudsman Service concerning similar
COBS 2.4.4RRP
(1) This rule applies if a firm (F1), in the course of performing MiFID or equivalent third country business, receives an instruction to provide3 an investment or ancillary service on behalf of a client (C) through another firm (F2), if F2 is:(a) a MiFID investment firm or a third country investment firm; or(b) an investment firm that is:(i) a firm5; and(ii) subject to equivalent relevant requirements.(2) F1 may rely upon:(a) any information about C transmitted to it by F2; and(b)
FEES 4.3.2GRP
(1) The amount payable by each firm will depend upon the category (or categories) of regulated activities or payment services7it is engaged in (fee-blocks)and whether it is issuing electronic money,10 and on the amount of business it conducts in each category (tariff base). The fee-blocks and tariffs are identified in FEES 4 Annex 1AR17 (and guidance on calculating certain of the tariffs is at FEES 4 Annex 12 G and 17FEES 4 Annex 13G15) 17while 27FEES 4 Annex 2AR sets 17 out
BIPRU 8.3.24GRP
[deleted]54444
DISP 2.6.4RRP
The Voluntary Jurisdiction covers only complaints about the activities of a VJ participant carried on from an establishment:519(1) in the United Kingdom; or(2) in the EEA or Gibraltar16 if the following conditions are met:(a) the activity is directed wholly or partly at the United Kingdom (or part of it);(b) contracts governing the activity are (or, in the case of a potential customer, would have been) made under the law of England and Wales, Scotland or Northern Ireland; and(c)
COLL 6.6B.24GRP
(1) (a) If a depositary performs part of its functions through a branch in an 4EEA State, this is not a delegation by the depositary of its functions to a third party.(b) This is because ‘third party’ in COLL 6.6B.22R means any party that is not part of the same legal entity as the depositary.(2) [deleted]4(3) (a) A depositary that performs part of its functions through a branch in an EEA State 4 should ensure that those arrangements do not impede the depositary’s ability to meet