Related provisions for PERG 7.7.5

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IFPRU 4.11.1GRP
The FCA considers that income-producing real estate (IPRE) is a particularly difficult asset class for which to build effective rating systems that are compliant with the requirements of the internal ratings based (IRB) approach.
IFPRU 4.11.5GRP
The FCA expects that an IPRE rating system will only be compliant if a firm is able to demonstrate the following in respect of its treatment of cash flows (except where the firm can demonstrate that this is not an appropriate risk driver):(1) the difference in deal ratings when tenant ratings are altered is intuitive;(2) the transformation of ratings into non-rent payment probability is intuitive. Even where tenants are rated by the firm the PD will not usually represent a direct
IFPRU 4.11.6GRP
The FCA expects that an IPRE rating system will only be compliant if a firm is able to demonstrate the following in respect of its treatment of interest-rate risk (IRR):(1) IRR is included as a relevant risk driver (unless the portfolio is exclusively hedged);(2) the way in which IRR is included in the deal rating is intuitive with respect to model philosophy. For example, a 'point in time' rating should consider the current interest rate and likely change over a one-year time
IFPRU 4.11.8GRP
The FCA expects that firms will not be compliant with the calibration requirements relating to use of a long-run default rate, unless it can demonstrate that:(1) the internal data series is the longest relevant and accurate data series, on a UK CRR2 compliant definition of default, that is available;(2) the determination of long-run default rate includes reference to an appropriate source of downturn data (this may require the use of external data);(3) the relevance of any external
IFPRU 4.11.9GRP
The FCA expects that a firm will only be compliant with the calibration requirements relating to model philosophy if it can demonstrate that:(1) the model philosophy is clearly articulated and justified. Justification should include analysis of the performance of assets, and the corresponding ratings assigned, over a change in economic conditions (ie, as long as period as possible); and(2) in addition to encapsulating this information in a coherent way in the calibration, the
IFPRU 4.11.12GRP
The FCA considers that, to meet the requirements referred to in IFPRU 4.11.1 G, it will be necessary for firms to demonstrate that a firm has a good understanding of PD models that are constructed theoretically and that the parameter estimates reflect a one-year PD. In addition, even if empirical data were not used to determine the PD estimate it should, where available, be used to back-test the estimates.
IFPRU 4.11.13GRP
The FCA expects that, as most models of this type will be able to produce one-year estimates of PD that correspond closely to point-in-time estimates, firms should conduct robust back-testing of such estimates by comparing them with realised default rates. Firms would need to demonstrate that the results of such back-testing meet pre-defined and stringent standards in order for the FCA to be satisfied that the IRB requirements are met.
IFPRU 4.11.14GRP
Because assumptions in the model build process are likely to materially impact the resulting PDs, the FCA would expect these choices to be clearly justified in the model documentation and to have been independently reviewed. To be satisfied that a firm is complying with article 176(1)(d) of the UK CRR2, the FCA expects a firm to support justification for all assumptions with analysis of the sensitivity of the model outputs to changes in the assumptions.
IFPRU 4.11.15GRP
Where the firm has fewer1than 20 defaults in their internal data set, the FCA expects it to be necessary for firms to perform a statistical low default portfolio calibration, as set out in the guidance in this section.1
IFPRU 4.11.16GRP
The FCA expects that a firm will be compliant with the validation requirements only where1it can demonstrate, in respect of discriminatory power, that:11(1) appropriate minimum standards that the rating system is expected to reach are defined, together with reasoning behind the adoption of such standards and that the factors considered when determining the tests are clearly documented;(2) an objective rank-ordering metric, measured using an appropriate time horizon (eg, using
IFPRU 4.11.17GRP
The FCA expects that a firm will be compliant with the validation requirements only where1it can demonstrate in respect of the calibration that:11(1) observed default rate versus PD is considered at grade level and across a range of economic environments (ie, as long as period as possible);(2) where the PD does not relate to a pure point-in-time estimate, either the PD or the observed default rate is transformed such that comparison between the two is meaningful. This transformation
IFPRU 4.11.18GRP
The FCA also expects that a firm will be compliant with the validation requirements only where1it can demonstrate that:11(1) appropriate stability metrics should be considered across a range of economic environments (ie, longest period possible including most recent data);(2) the tolerances for the degree of divergence, and associated actions for what should happen when they are not met, is pre-defined; and(3) subsections of portfolios by characteristics affecting risk profile,
IFPRU 4.11.19GRP
The FCA expects that a firm will1 be able to comply with certain other UK CRR2 requirements only where it can1demonstrate that:11(1) in relation to article 144(1)(e) of the UK CRR2, where more than one model is used, the rationale, and the associated boundary issues, is clearly articulated and justified and the criteria for assigning an asset to a rating model are objective and clear;(2) in relation to article 173(1)(c) of the UK CRR2, the firm has a process in place to ensure
DTR 8.5.1RRP
A primary information provider must submit to the FCA an annual report prepared by a reporting accountant qualified to act as auditor which states that the primary information provider has satisfied its continuing obligations in DTR 8.4 in the preceding 12 months.
DTR 8.5.3RRP
The annual report must be sent to the FCA within 3 months of the anniversary of the date of the primary information provider's approval as a primary information provider.
DTR 8.5.4RRP
(1) The FCA may require a primary information provider to provide specified information or specified documents to the FCA.(2) The primary information provider must as soon as practicable provide to the FCA any information or documents it has been required to provide under (1).(3) This rule applies only to information or documents reasonably required by the FCA in connection with the performance of its functions in relation to a primary information provider.
DTR 8.5.5GRP
The FCA may impose restrictions or limitations on the services a primary information provider can provide at any time following the grant of a primary information provider's approval.
DTR 8.5.6GRP
Situations when the FCA may impose restrictions or limitations on the services a primary information provider can provide include (but are not limited to) where it appears to the FCA that:(1) the primary information provider's ability to satisfy its obligations in DTR 8.4 would be likely to be compromised; or(2) the primary information provider is proposing to make changes to its systems and controls or operations which would be likely to prevent it from satisfying any of its
DTR 8.5.7GRP
The decision-making procedures that the FCA will follow when it uses its disciplinary powers in relation to a primary information provider are set out in DEPP.
DTR 8.5.8RRP
A request by a primary information provider for its approval as a primary information provider to be suspended must be in writing and must include:(1) the primary information provider's name;(2) a clear explanation of the background and reasons for the request;(3) the date on which the primary information provider requests the suspension to take effect; and(4) the name and contact details of the person at the primary information provider with whom the FCA should liaise in relation
DTR 8.5.10RRP
A request by a primary information provider for its approval as a primary information provider to be cancelled must be in writing and must include:(1) the primary information provider's name; (2) a clear explanation of the background and reasons for the request;(3) the date on which the primary information provider requests the cancellation to take effect; and(4) the name and contact details of the person at the primary information provider with whom the FCA should liaise in relation
DTR 8.5.12GRP
The FCA may impose restrictions or limitations on the services a primary information provider can provide or suspend a primary information provider's approval if the FCA considers it desirable to do so in order to advance one or more of its operational objectives.[Note: A statutory notice may be required under section 89V of the Act. Where this is the case, the procedure for giving a statutory notice is set out in DEPP.]
EG 19.36.1RP
1The Packaged Retail and Insurance-based Investment Products Regulations implemented2 the PRIIPs Regulation (before it was brought into UK law)2. The FCA has investigative and enforcement powers in relation to both criminal and civil breaches of the Packaged Retail and Insurance-based Investment Products Regulations, PRIIPs Regulation and any onshored regulation which was an EU regulation2 made under the PRIIPs Regulation. The PRIIPs Regulation imposes requirements on both authorised
EG 19.36.2RP
1The FCA’s approach to enforcing the Packaged Retail and Insurance-based Investment Products Regulations, whether the person is authorised or not, will mirror our general approach to enforcing the Act, as set out in EG 2. We will seek to exercise our enforcement powers in a manner that is transparent, proportionate, responsive to the issue, and consistent with our publicly stated policies. We will also seek to ensure fair treatment when exercising our enforcement powers. Finally,
EG 19.36.3RP
1The regulatory powers which the Packaged Retail and Insurance-based Investment Products Regulations provide to the FCA include:(1) the power to appoint investigators and require information;(2) powers of entry and inspection;(3) the power of public censure;(4) the power to impose financial penalties;(5) the power to impose a limitation, restriction or requirement; (6) the power to apply for an injunction or restitution order;(7) the power to require restitution; and(8) the power
EG 19.36.5RP
1The Packaged Retail and Insurance-based Investment Products Regulations, for the most part, mirror the FCA’s investigative, sanctioning and regulatory powers under the Act. The FCA has decided to adopt procedures and policies in relation to the use of those powers akin to those it has under the Act. Key features of the FCA’s approach are described below.
EG 19.36.7RP
1For example, the FCA will notify the subject of the investigation that we have appointed investigators to carry out an investigation under the Packaged Retail and Insurance-based Investment Products Regulations and the reasons for the appointment, unless notification is likely to prejudice the investigation or otherwise result in it being frustrated. The FCA expects to carry out a scoping visit early on in the enforcement process in most cases. The FCA’s policy in civil investigations
EG 19.36.9RP
1The Packaged Retail and Insurance-based Investment Products Regulations do not require the FCA to have published procedures for commencing criminal prosecutions. However, in these situations the FCA expects that it will normally follow its decision-making procedures for the equivalent decisions under the Act, as set out in EG 12.
EG 19.36.10RP
1The Packaged Retail and Insurance-based Investment Products Regulations do not require the FCA to have published procedures to apply to the court for an injunction or restitution order. However, the FCA will normally follow its decision-making procedure for the equivalent decisions under the Act, as set out in EG 10 and EG 11.
EG 19.36.11RP
1The Packaged Retail and Insurance-based Investment Products Regulations require the FCA to give third party rights as set out in section 393 of the Act and to give access to certain material as set out in section 394 of the Act.
EG 19.36.12RP
1Certain FCA decisions (for example making an order prohibiting a person from marketing a PRIIP; making an order requiring a person to suspend the marketing of a PRIIP) may be referred to the Tribunal by an aggrieved party.
EG 19.36.13RP
1When determining whether to take action to impose a penalty or to issue a public censure under the Packaged Retail and Insurance-based Investment Products Regulations the FCA will have regard to the relevant factors in DEPP 6.2 and DEPP 6.4. The FCA’s policy in relation to determining the level of financial penalty includes having regard, where relevant, to DEPP 6.5 to DEPP 6.5D.
EG 19.36.14RP
1As with cases under the Act, the FCA may settle or mediate appropriate cases involving civil breaches of the Packaged Retail and Insurance-based Investment Products Regulations to assist it exercise its functions under the Packaged Retail and Insurance-based Investment Products Regulations in the most efficient and economic way. [Note: See DEPP 5, DEPP 6.7 and EG 5 for further information on the settlement process and the settlement discount scheme.]
EG 19.36.15RP
1The FCA will apply the approach to publicity that is outlined in EG 6.
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.
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
LR 8.4.2RRP
A sponsor must not submit to the FCA an application on behalf of an applicant, in accordance with LR 3, unless it has come to a reasonable opinion, after having made due and careful enquiry, that:(1) the applicant has satisfied all requirements of the listing rules relevant to an application for admission to listing;(2) the applicant has satisfied all applicable requirements set out in the prospectus rules;12(3) the directors of the applicant have established procedures which
LR 8.4.3RRP
A sponsor must:(1) submit a completed Sponsor's Declaration on an Application for Listing to the FCA either:2(a) on the day the FCA is to consider the application for approval of the prospectus and prior to the time the prospectus is approved; or(b) at a time agreed with the FCA, if the FCA is not approving the prospectus13;1(2) submit a completed Shareholder Statement or Pricing Statement, as applicable, to the FCA by 9 a.m. on the day the FCA is to consider the application;(3)
LR 8.4.4GRP
Depending on the circumstances of the case, a sponsor providing services to an applicant on an application for admission to listing may have to confirm in writing to the FCA that the board of the applicant has allotted the securities11. [Note: see LR 3.3.4 R]55
LR 8.4.8RRP
A sponsor must not submit to the FCA an application on behalf of an applicant, in accordance with LR 3 (Listing applications), unless it has come to a reasonable opinion, after having made due and careful enquiry, that:(1) the applicant has satisfied all requirements of the listing rules relevant to an application for admission to listing;(2) the applicant has satisfied all applicable requirements set out in the prospectus rules12; and(3) the directors of the applicant have a
LR 8.4.9RRP
A sponsor must:(1) submit a completed Sponsor's Declaration on an Application for Listing to the FCA either:(a) on the day the FCA is to consider the application for approval of the prospectus and prior to the time the prospectus is approved; or11(b) at a time agreed with the FCA if theFCA did not approve the prospectus or12 or if it is determining whether a document is an equivalent document1;(2) submit a completed Shareholder Statement or Pricing Statement, as applicable,
LR 8.4.10GRP
Depending on the circumstances of the case, a sponsor providing services to an applicant on an application for admission to listing may have to confirm in writing to the FCA the number of securities11 to be allotted or admitted1. [Note: see LR 3.3.4 R8]15518
LR 8.4.11RRP
LR 8.4.12 R to LR 8.4.13 R apply in relation to transactions involving an issuer with 5 a premium listing411that is required to submit to the FCA for approval8:545(1) a class 1 circular; or48(2) a circular that proposes a reconstruction or a re-financing which does not constitute a class 1 transaction; or8(3) a circular for the proposed purchase of own shares:88(a) which does not constitute a class 1 circular; and(b) is required by LR 13.7.1R (2) to include a working capital
LR 8.4.12RRP
A sponsor must not submit to the FCA, on behalf of a listed company, a circular regarding a transaction set out in LR 8.4.11 R for approval8, unless the sponsor has come to a reasonable opinion, after having made due and careful enquiry, that:8(1) the listed company has satisfied all requirements of the listing rules relevant to the production of a class 1 circular or other circular;(2) the transaction will not have an adverse impact on the listed company's ability to comply with
LR 8.4.13RRP
A sponsor acting on a transaction falling within LR 8.4.11 R must:(1) submit a completed Sponsor's Declaration for the Production of a Circular to the FCA on the day the circular is to be approved by the FCA and prior to the time the circular is approved;(2) submit a completed Pricing Statement, if applicable, to the FCA by 9 a.m on the day the FCA is to consider the application; and(3) ensure that all matters known to it which, in its reasonable opinion, should be taken into
LR 8.4.14RRP
In relation to a proposed transfer under LR 5.4A, if a sponsor is appointed6 in accordance with LR 8.2.1A R, it6 must:6(1) submit a letter to the FCA setting out how the issuer satisfies each listing rule requirement relevant to the category of listing to which it wishes to transfer, by no later than when the first draft of the circular or announcement required under LR 5.4A is submitted;(2) submit a completed Sponsor’s Declaration for a Transfer of Listing7 to the FCA for the
LR 8.4.15RRP
A sponsor must not submit to the FCA on behalf of an issuer a final circular or announcement for approval or a Sponsor’s Declaration for a Transfer of Listing7, unless it has come to a reasonable opinion, after having made due and careful enquiry, that:7(1) the issuer satisfies all eligibility requirements of the listing rules that are relevant to the new category to which it is seeking to transfer;(2) the issuer has satisfied all requirements relevant to the production of the
LR 8.4.17RRP
6A sponsor acting on a reverse takeover where the issuer decides to make a disclosure announcement under LR 5.6.15 G must:(1) submit to the FCA under LR 5.6.17 R a completed Sponsor’s Declaration for a Reverse Takeover Announcement7;(2) not submit to the FCA the Sponsor’s Declaration for a Reverse Takeover Announcement7 unless it has come to a reasonable opinion, after having made due and careful enquiry, that it is reasonable for the issuer to provide the declarations described
SUP 15.8.1RRP
73A firm which manages the assets of an occupational pension scheme must notify the FCA20 as soon as reasonably practicable if it receives any request or instruction from a trustee which it:20(1) knows; or(2) on substantial grounds:(a) suspects; or(b) has cause reasonably to suspect;is at material variance with the trustee's duties.1
SUP 15.8.2RRP
If a firm begins or ceases to administer individual pension accounts, it must notify the FCA20 as soon as reasonably practicable that it has done so.5220
SUP 15.8.3RRP
(1) An insurer must notify the FCA20in respect of any firm (the "intermediary") as soon as reasonably practicable if:20(a) any amount of commission due from the intermediary to the insurer in accordance with an indemnity commission clawback arrangement remains outstanding for four months after the date when the insurer gave notice to the intermediary that the relevant premium had not been paid; or(b) any amount of commission due from the intermediary to the insurer as a result
SUP 15.8.4GRP
(1) 467In accordance with regulation 2317 of the Money Laundering Regulations, with effect from 26 June 201717 , a firm is required to notify the FCA:201111111120(a) before it begins or within 28 days of it beginning11; and(b) immediately11 after it ceases;11to operate a money service business or a trust or company service provider.1111(2) The notification referred to in (1) should be made in accordance with the requirements in SUP 15.7 (Form and method of notification)
SUP 15.8.5GRP
467A firm which is already operating a money service business or a trust or company service provider11 immediately before 26 June 201717 is required by the Money Laundering Regulations to notify the FCA20 of that fact within 30 days17 and should do so in the manner specified in SUP 15.8.4 G(2)17.1111112011
SUP 15.8.6RRP
If a UK UCITS management company intends to delegate to a third party any one or more of its functions for the more efficient conduct of its business, it must first inform the FCA20 in an appropriate manner.141420[Note: article 13(1)(a) of the UCITS Directive]14
SUP 15.8.8RRP
(1) 9If a firm begins or ceases to hold itself out as acting as a CTF provider, it must notify the FCA20 as soon as reasonably practicable that it has done so.20(2) A firm that acts as a CTF provider must provide theFCA,20 as soon as reasonably practicable, with details of:20(a) any third party administrator that it engages;(b) details of whether it intends to offer HMRC allocated CTFs12; and12(c) whether it intends to provide its own stakeholder CTF account.
SUP 15.8.9RRP
10A BIPRUfirm must report to the FCA15 immediately any case in which its counterparty in a repurchase agreement or reverse repurchase agreement or securities or commodities lending or borrowing transaction defaults on its obligations.2020
SUP 15.8.10RRP
16A tied MCD credit intermediary must notify the FCA, as soon as reasonably practicable, if it intends to cease acting on behalf of and under the full responsibility of any firm.
SUP 15.8.11RRP
16A MCD credit intermediary must notify the FCA, as soon as reasonably practicable, if it intends to start acting on behalf of and under the full responsibility of any firm.
SUP 15.8.12DRP
18Unless SUP 15.8.13D applies, a full credit institution must notify the FCA before it starts to provide an account information service or a payment initiation service.
SUP 15.8.13DRP
18A full credit institution which:(1) prior to 13 January 2018, started to provide a service which, if provided on or after 13 January 2018, would have constituted an account information service or a payment initiation service; and(2) continues to provide an account information service or a payment initiation service on 13 January 2018, must notify the FCA that it is providing account information services or payment initiation services by 10 February 2018.
IFPRU 6.3.2GRP
This section describes some of the standards that the FCA expects to be met for it to consider that a firm is compliant with the requirements in IFPRU 6.3.1 G.
IFPRU 6.3.6GRP
Data may be deemed insufficient if, for example, it contains missing data points, or data points which contain stale data. With regard to less liquid risk factors or positions, the FCA expects the firm to make a conservative assessment of those risks, using a combination of prudent valuation techniques and alternative VaR estimation techniques to ensure there is a sufficient cushion against risk over the close-out period, which takes account of the illiquidity of the risk factor
IFPRU 6.3.8GRP
(1) In determining whether it is appropriate for a firm to use empirical correlations within risk categories and across risk categories within a model, the FCA expects certain features to be observed in assessing whether such an approach is sound and implemented with integrity. In general, the FCA expects a firm to determine the aggregate VaR measure by adding the relevant VaR measure for each category, unless the firm's permission provides for a different method of aggregating
IFPRU 6.3.14GRP
Any overshooting initially counts for the purpose of the calculation of the plus factor, even if subsequently the FCA agrees to exclude it. Thus, where the firm experiences an overshooting and already has four or more overshootings for the previous 250 business days, changes to the multiplication factor arising from changes to the plus factor become effective at day n+3.
IFPRU 6.3.16GRP
The FCA, will review as part of a firm's VaR model permission application, the processes and documentation relating to the derivation of profit and loss used for back-testing. A firm's documentation should clearly set out the basis for cleaning profit and loss. To the extent that certain profit and loss elements are not updated every day (for example, certain reserve calculations) the documentation should clearly set out how such elements are included in the profit and loss s
IFPRU 6.3.17GRP
In accordance with article 363(3) of the UK CRR1 (Permission to use internal models), the FCA expects a firm to provide and discuss with us details of any significant planned changes to the VaR model before those changes are implemented. These details must include detailed information about the nature of the change, including an estimate of the impact on VaR numbers and the incremental risk charge.
IFPRU 6.3.18GRP
The use of overlapping intervals of 10-day holding periods for article 365 of the UK CRR1 (VaR and stressed VaR calculation) introduces an autocorrelation into the data that would not exist should truly independent 10-day periods be used. This may give rise to an under-estimation of the volatility and the VaR at the 99% confidence level. To obtain clarity on the materiality of the bias, a firm should measure the bias arising from the use of overlapping intervals for 10-day VaR
IFPRU 6.3.19GRP
Article 365 of the UK CRR1 requires a firm that uses an internal model for calculating its own funds requirement to calculate, at least weekly, a stressed VaR (sVaR) of their current portfolio. When the FCA considers a firm's application to use a sVaR internal model it would expect the features in IFPRU 6.3.20 G to IFPRU 6.3.24 G to be present prior to permission being granted, as indicative that the conditions for granting permission have been met.
IFPRU 6.3.20GRP
The firm should calculate the sVaR measure to be greater than or equal to the average of the 2nd and 3rd worst loss in a 12-month time series comprising of 250 observations. The FCA expects, as a minimum, that a corresponding linear weighting scheme should be applied if the firm uses a larger number of observations.
IFPRU 6.3.22GRP
The firm should consider whether the use of antithetic data in the calculation of the sVaR measure is appropriate to the firm's portfolio. A justification for using or not using antithetic data should be provided to the FCA.
IFPRU 6.3.25GRP
Article 372 of the UK CRR1 (Requirement to have an internal IRC model) requires a firm that use an internal model for calculating own funds requirements for specific risk of traded debt instruments to also have an internal incremental default and migration risk (IRC) model in place to capture the default and migration risk of its trading book positions that are incremental to the risks captured by its VaR model. When the FCA considers a firm's application to use an IRC internal
IFPRU 6.3.26GRP
The FCA expects the IRC model to capitalise pre-default basis risk. In this respect, the model should reflect that in periods of stress the basis could widen substantially. The firm should disclose to the FCA its material basis risks that are incremental to those already captured in existing market risk capital measures (VaR-based and others). This must take actual close-out periods during periods of illiquidity into account.
IFPRU 6.3.28GRP
To achieve a soundness standard comparable to those under the IRB approach, LGD estimates should reflect the economic cycle. Therefore, the FCA expects a firm to incorporate dependence of the recovery rate on the economic cycle into the IRC model. Should the firm use a conservative parameterisation to comply with the IRB standard of the use of downturn estimates, evidence of this should be submitted in quarterly reporting to the FCA, bearing in mind that for trading portfolios,
SUP 15.11.1GRP
1Under section 64A of the Act, the FCA may make rules about the conduct of approved persons and certain other 4persons who work for a firm4.
SUP 15.11.4GRP
Under section 64C of the Act, a firm must notify the FCA if it takes disciplinary action against certain people working for an SMCR firm5 and the reason for this action is a reason specified in rules made by the FCA (those rules are set out4 in SUP 15.11.6R)4. 4
SUP 15.11.6RRP
If a reason for taking disciplinary action as referred to in section 64C of the Act (Requirement for authorised persons to notify regulator of disciplinary action)5 is any action, failure to act or circumstance that amounts to a breach of COCON, then the SMCR firm5 is required to notify the FCA of the disciplinary action.4
SUP 15.11.6AGRP
4The effect of section 64C of the Act and SUP 15.11.6R is that the reporting obligation in section 64C of the Act and in this section: (1) only applies to SMCR firms; and5(2) only covers persons who are subject to COCON (who are called conduct rules staff in the FCA Handbook) rather than to the whole workforce of an SMCR firm.5
SUP 15.11.7GRP
A firm should make a separate notification about a person under section 64C of the Act where:(1) it has made a notification to the FCA about the5person pursuant to SUP 15.3.11R(1)(a) because of a breach of COCON2; and(2) it subsequently takes disciplinary action against the person for the action, failure to act, or circumstance, that amounted to a breach of COCON.
SUP 15.11.8GRP
If, after a firm has made a notification for a person (A) pursuant to section 64C of the Act,2 it becomes aware of facts or matters which cause it to change its view that A has breached COCON, or cause it to determine that A has breached a provision of COCON other than the provision to which the notification related, the firm should inform the FCA of those facts and matters and its revised conclusion in line with a firm’s obligation to comply with Principle 11, SUP 15.6.4R and,
SUP 15.11.9GRP
(1) If a firm takes disciplinary action as a result of a conduct breach (see SUP 15.11.6R) against an employee but the employee has appealed or plans to appeal, the firm should still report the disciplinary action under section 64C of the Act but should include the appeal in the notification.5(2) The firm should update the FCA on the outcome of any appeal.52
SUP 15.11.11GRP
In relation to any conduct rules staff, the FCA does not expect a firm to notify it pursuant to2section 64C of the Act if the2 breach of COCON occurred before the application of COCON to that firm.
SUP 15.11.12GRP
Where a firm is required to notify the FCA pursuant to2section 64C of the Act and that notification relates to an SMF manager, SUP 10C sets out how and when the notification must be made, and the relevant notification rules in SUP 10C apply.
SUP 15.11.13RRP
(1) A firm must make any notifications required pursuant to section 64C of the Act relating to conduct rules staff other than SMF managers4in accordance with SUP 15.11.13R to SUP 15.11.15R.3(2) That notification must be made annually.3(3) Each notification must:3(a) cover;63(i) 6(in the case of a firm falling within SYSC 23 Annex 1 6.7R (credit firms with limited permission)) its annual financial reporting period ending on its accounting reference date; or(ii) 6(for any other
SUP 15.11.14RRP
(1) A firm other than a credit union must make each notification pursuant to SUP 15.11.13R (notifications about section 64C of the Act relating to conduct rules staff other than SMF managers4) by submitting it online through the FCA’s website using the electronic system made available by the FCA for this purpose.3(2) A firm must use the version of Form H (named REP008 – Notification of Disciplinary Action) 4made available on the electronic system referred to in (1), which is based
SUP 15.11.14AGRP
(1) 3If the information technology systems used by the FCA fail and online submission is unavailable for 24 hours or more, the FCA will endeavour to publish a notice on its website confirming that:(a) online submission is unavailable; and(b) the alternative methods of submission in SUP 15.11.15R apply.(2) Where SUP 15.11.14R(3) applies to a firm, GEN 1.3.2R (Emergency) does not apply.
SUP 15.11.20GRP
Failing to disclose relevant information to the FCA may be a criminal offence under section 398 of the Act.
EG 19.30.2RP
1The MCDO requires that a firm acting as a lender, intermediary or carrying out advisory services in relation to CBTL from 21 March 2016 must be registered by the FCA to do so. It provides for the FCA to determine applications to be registered, as well as powers to suspend or revoke registration.
EG 19.30.3RP
1It also imposes obligations on registered firms to comply with conduct requirements set out in the Schedule to the MCDO, retain relevant information and to deal with the FCA in an open and co-operative manner. The FCA also has the power to give directions to a registered firm to secure compliance with the requirements set out in the Schedule. In addition, the FCA has investigation and sanctioning powers in relation to the framework.
EG 19.30.4RP
1The FCA's approach to taking enforcement action under the MCDO will mirror 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 when exercising its enforcement powers. Finally, it will aim to change the behaviour of the person who is the subject of its action,
EG 19.30.5RP
1The MCDO, for the most part, applies or mirrors the FCA's investigative and sanctioning powers under the Act. The FCA has adopted procedures and policies for the use of those powers that are akin to those it has under the Act. Key features of the FCA's approach are described below.
EG 19.30.6RP
1Article 23 of the MCDO applies many of the provisions of the Act in relation to the FCA’s investigation and information-gathering powers in respect of a registered firm. The effect of this is to apply the same procedures under the Act for appointing investigators and requiring information when investigating contraventions of the MCDO.
EG 19.30.7RP
1For example, the FCA will notify the subject of the investigation that it has appointed investigators to carry out an investigation under the MCDO and the reasons for the appointment, unless notification is likely to result in the investigation being frustrated. In most cases, the FCA expects to carry out a scoping visit early on in the enforcement process. The FCA's policy in regulatory investigations under the MCDO is to use powers to compel information, in the same way as
EG 19.30.8RP
1The RDC is the FCA’s decision maker for some decisions which require warning notices or decision notices to be given under the MCDO as set out in DEPP 2 Annex 1G. The RDC will make its decisions following the procedure set out in DEPP 3.2 or, where appropriate, DEPP 3.3, and DEPP 3.4 applies for urgent notices under article 16(1)(a).
EG 19.30.9RP
1For decisions made by executive procedures, the procedure to be followed will be those described in DEPP 4.
EG 19.30.10RP
1Article 18(3) applies sections 393 and 394 of the Act to warning notices and decision notices given under the MCDO and so require the FCA to give third party rights and to give access to material as set out under the Act. Article 24(1) applies the procedural provisions of Part 9 of the Act, in respect of matters that can be referred to the Tribunal, and article 24(2) applies Part 26 of the Act to warning and decision notices given under the MCDO.
EG 19.30.11RP
1 When determining whether to take action to impose a penalty or to issue a public censure under the MCDO, the FCA’s policy includes having regard to the relevant factors in DEPP 6.2 and DEPP 6.4. When determining the level of financial penalty, the FCA’s policy includes having regard to the relevant principles and factors in DEPP 6.5, DEPP 6.5A, DEPP 6.5D and DEPP 6.7.
EG 19.30.12RP
1As with cases under the Act, the FCA may settle or mediate appropriate cases involving breaches of the MCDO 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.
EG 19.30.13RP
1When determining whether to take action to impose a suspension under the MCDO, the FCA’s policy includes having regard to the relevant factors in DEPP 6A.2 and 6A.4. When determining the length of the period of suspension, the FCA’s policy includes having regard to the relevant principles and factors in DEPP 6A.3.
EG 19.30.14RP
1The FCA will apply the approach to publicity that is outlined in EG 6.
EG 19.29.1RP
1The Immigration Regulations (as amended by the Immigration Act 2014 (Current Accounts) (Excluded Accounts and Notification Requirements) Regulations 2016)2 give the FCA investigation and sanctioning powers in relation to the contravention of sections 40, 40A, 40B and 40G2 of the Immigration Act 2014 (as amended by the Immigration Act 2016)2 (the Immigration Act), as well as the contravention of requirements imposed by, or under, the Immigration Regulations.
EG 19.29.2RP
1The FCA's approach to taking enforcement action under the Immigration Regulations will mirror 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 when exercising its enforcement powers. Finally, it will aim to change the behaviour of the person who is
EG 19.29.3RP
1The Immigration Regulations, for the most part, mirror the FCA's investigative and sanctioning powers under the Act. The FCA has adopted procedures and policies for the use of those powers that are akin to those it has under the Act. Key features of the FCA's approach are described below.
EG 19.29.5RP
1The FCA will notify the subject of the investigation that it has appointed investigators to carry out an investigation under the Immigration Regulations and the reasons for the appointment, unless notification is likely to result in the investigation being frustrated. In most cases, the FCA expects to carry out a scoping visit early on in the enforcement process. The FCA's policy in civil investigations under the Immigration Regulations is to use powers to
EG 19.29.6RP
1The RDC is the FCA’s decision maker for decisions which require warning notices or decision notices to be given under the Immigration Regulations, as set out in DEPP 2 Annex 1G. The RDC will make its decisions following the procedure set out in DEPP 3.2 or, where appropriate, DEPP 3.3.
EG 19.29.7RP
1The Immigration Regulations do not require the FCA to publish procedures to commence criminal prosecutions. However, the FCA will normally follow its equivalent decision-making procedures for similar decisions under the Act, as set out in EG 12.
EG 19.29.8RP
1The Immigration Regulations apply sections 393 and 394 of the Act to warning notices and decision notices given under the Immigration Regulations and so require the FCA to give third party rights and to give access to material.
EG 19.29.10RP
1When determining whether to take action to impose a penalty or to issue a public censure under the Immigration Regulations, the FCA’s policy includes having regard to the relevant factors in DEPP 6.2 and DEPP 6.4. When determining the level of financial penalty, the FCA’s policy includes having regard to the relevant principles and factors in DEPP 6.5 to DEPP 6.5B, DEPP 6.5D and DEPP 6.7.
EG 19.29.11RP
1As with cases under the Act, the FCA may settle or mediate appropriate cases involving civil breaches of the Immigration 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.
EG 19.29.12RP
1When determining whether to take action to impose a suspension or restriction under the Immigration Regulations, the FCA's policy includes having regard to the relevant factors in DEPP 6A.2 and 6A.4. When determining the length of the period of suspension or restriction, the FCA's policy includes having regard to the relevant principles and factors in DEPP 6A.3.
EG 19.29.13RP
1The FCA will apply the approach to publicity that is outlined in EG 6.
FEES 4.4.1RRP
A firm (other than the Society or8 an MTF or OTF8 operator in relation to its MTF or OTF8 business5) must notify to the FCA (in its own capacity and, if applicable, in its capacity as collection agent for the PRA) the value (as at the valuation date specified in Part 5 of FEES 4 Annex 1AR6) of each element of business on which the periodic fee payable by the firm is to be calculated.15
FEES 4.4.2RRP
A firm (other than the Society) must send to the FCA (in its own capacity and, if applicable, in its capacity as collection agent for the PRA)15 in writing the information required under FEES 4.4.1 R as soon as reasonably practicable, and in any event within two months, after the date specified as the valuation date in Part 5 of FEES 4 Annex 1AR in relation to 9 fees payable to the FCA6 (or FEES 4.2.7B R where applicable) unless FEES 4.4.2AR applies9.15151527
FEES 4.4.4GRP
In most cases a firm will provide the information required by this section as part of its compliance with the provisions of SUP. To the extent that the FCA6 does not obtain sufficient, or sufficiently detailed, information it 6 may seek this by using the general information gathering powers (see SUP 2 (Information gathering by the FCA or PRA6 on its own initiative)).14141414141414
FEES 4.4.7DRP
3A fee-paying payment service provider and a fee-paying electronic money issuer4 must notify to the FCA the value (as at the valuation date specified in Part 4 of FEES 4 Annex 11) of each element of business on which the periodic fee (other than a flat fee)4 payable by the firm under 1 R4 is to be calculated, including any payment services carried on by its agents from an establishment in the United Kingdom. 4
FEES 4.4.8DRP
3A firm4 must send to the FCA in writing the information required under FEES 4.4.7 D as soon as reasonably practicable, and in any event within two months, after the date specified as the valuation date in Part 4 of FEES 4 Annex 11.
FEES 4.4.9DRP
3To the extent that a firm4 has provided the information required by FEES 4.4.7 D to the FCA as part of its compliance with another provision of the Handbook, it is deemed to have complied with the provisions of that direction.444
EG 19.28.1RP
1The Referral Fees Regulations give the FCA investigation and sanctioning powers in relation to the contravention of the rules against referral fees contained in sections 56 to 60 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (the LASPO Act), as well as the contravention of requirements imposed by, or under, the Referral Fees Regulations.
EG 19.28.2RP
1The FCA's approach to taking enforcement action under the Referral Fees Regulations will mirror 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 when exercising its enforcement powers. Finally, it will aim to change the behaviour of the person who
EG 19.28.3RP
1The Referral Fees Regulations, for the most part, mirror the FCA's investigative and sanctioning powers under the Act. The FCA has adopted procedures and policies for the use of those powers that are akin to those it has under the Act. Key features of the FCA's approach are described below.
EG 19.28.5RP
1The FCA will notify the subject of the investigation that it has appointed investigators to carry out an investigation under the Referral Fees Regulations and the reasons for the appointment, unless notification is likely to result in the investigation being frustrated. In most cases, the FCA expects to carry out a scoping visit early on in the enforcement process. The FCA's policy in civil investigations under the Referral Fees Regulations is to use powers
EG 19.28.6RP
1The RDC is the FCA's decision maker for decisions which require warning notices or decision notices to be given under the Referral Fees Regulations, as set out in DEPP 2 Annex 1G. The RDC will make its decisions following the procedure set out in DEPP 3.2 or, where appropriate, DEPP 3.3.
EG 19.28.7RP
1The Referral Fees Regulations do not require the FCA to publish procedures to commence criminal prosecutions. However, the FCA will normally follow its equivalent decision-making procedures for similar decisions under the Act, as set out in EG 12.
EG 19.28.8RP
1The Referral Fees Regulations do not require the FCA to publish procedures to apply 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.
EG 19.28.9RP
1The Referral Fees Regulations apply sections 393 and 394 of the Act to warning notices and decision notices given under the Referral Fees Regulations and so require the FCA to give third party rights and to give access to material.
EG 19.28.11RP
1When determining whether to take action to impose a penalty or to issue a public censure under the Referral Fees Regulations, the FCA's policy includes having regard to the relevant factors in DEPP 6.2 and DEPP 6.4. When determining the level of financial penalty, the FCA's policy includes having regard to the relevant principles and factors in DEPP 6.5 to 6.5B, DEPP 6.5D and DEPP 6.7.
EG 19.28.12RP
1As with cases under the Act, the FCA may settle or mediate appropriate cases involving civil breaches of the Referral Fees 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.
EG 19.28.13RP
1When determining whether to take action to impose a suspension or restriction under the Referral Fees Regulations, the FCA's policy includes having regard to the relevant factors in DEPP 6A.2 and 6A.4. When determining the length of the period of suspension or restriction, the FCA's policy includes having regard to the relevant principles and factors in DEPP 6A.3. However, the FCA does not have the power to suspend an authorised person’spermission under the Referral Fees Regulations.
EG 19.28.14RP
1The FCA will apply the approach to publicity that is outlined in EG 6.
PERG 6.7.2GRP
The disaster recovery provider sets up and maintains a range of IT and related facilities (PABX etc). The disaster recovery contracts so far considered by the FCA give the recipient, subject to certain conditions including an up front payment, priority access to all or a specified part of these facilities if a 'disaster' causes the failure of a similar business system on which the recipient relies. The provider sells access to the same facilities to a number of different recipients,
PERG 6.7.4GRP
However, the disaster recovery contracts considered by the FCA had two key features.(1) Priority access to facilities in the event of a disaster was expressed to be on a 'first come, first served' basis. The contracts provided expressly that if the facilities needed by recipient A were already in use, following an earlier invocation by recipient B, the provider's obligation to recipient A was reduced to no more than an obligation of 'best endeavours' to meet A's requirements.
PERG 6.7.5GRP
Based on these features, the FCA reached the conclusion, with which the other terms of the contracts were consistent (PERG 6.6.8 G (3)), that these disaster recovery contracts were not contracts of insurance.
PERG 6.7.6GRP
An important part of the conclusion in PERG 6.7.5 G was that, although the provider assumed a risk at the outset of the contract, looking at the contract as a whole and interpreting the common law in the context of the FCA objectives (see PERG 6.5.2 G and PERG 6.5.3 G) there was no relevant assumption of risk.(1) The presence or absence of an assumption of risk is an important part of the statutory rationale for the prudential regulation of insurance.(2) In Medical Defence Union
PERG 6.7.8GRP
Notwithstanding PERG 6.7.7 G, the FCA's view is that an obligation that is of the same nature as a seller's or supplier's usual obligations as regards the quality of the goods or services is unlikely to be an insurance obligation in substance.
PERG 6.7.9GRP
The FCA is unlikely to classify a contract containing a simple manufacturer's or retailer's warranty as a contract of insurance, if the FCA is satisfied that the warranty does no more that crystallise or recognise obligations that are of the same nature as a seller's or supplier's usual obligations as regards the quality of the goods or services.
PERG 6.7.11GRP
It follows from PERG 6.7.10 G that the FCA is unlikely to be satisfied that an obligation in a contract of sale or supply is of the same nature as the seller's or supplier's usual obligations as regards the quality of goods or services, if that obligation has one or more of the following features:(1) it is assumed by a person other than the seller or supplier (a 'third party'); or(2) it is significantly more extensive in content, scope or duration than a seller's usual obligations
PERG 6.7.12GRP
Other things being equal, the FCA is likely to classify a contract of sale containing a warranty that has one or more of the features in PERG 6.7.11 G as a contract of insurance. The features in PERG 6.7.11 G (1) and (2) typically distinguish a 'third party' warranty and an 'extended warranty' from a 'simple' manufacturer's or retailer's warranty.
PERG 6.7.13GRP
If a warranty is provided by a third party, the FCA will usually treat this as conclusive of the fact that there are different transactions and an assumption or transfer of risk. This conclusion would not usually depend on whether the provider is (or is not) a part of the same group of companies as the manufacturer or retailer. But it will be the third party (who assumes the risk) that is potentially effecting a contract of insurance.
PERG 6.7.14GRP
A manufacturer or retailer may undertake a warranty obligation to his customer in a separate contract with the customer, distinct from the contract of sale or supply of goods or services. The FCA will examine the separate contract to see if it is a contract of insurance. But the mere existence of a separate warranty contract is unlikely to be conclusive by itself.
PERG 6.7.15GRP
A manufacturer or retailer may undertake an obligation to ensure that the customer becomes a party to a separate contract of insurance in respect of the goods sold. This would include, for example, a contract for the sale of a freezer, with a simple warranty in relation to the quality of the freezer, but also providing insurance (underwritten by an insurer and in respect of which the customer is the policyholder) covering loss of frozen food if the freezer fails. The FCA is unlikely
PERG 6.7.16GRP
The FCA distinguishes the contract in PERG 6.7.15 G from a contract under which the manufacturer or retailer assumes the obligation to provide the customer with an indemnity against loss or damage if the freezer fails, but takes out insurance to cover the cost of having to provide the indemnity to the customer. The obligation to indemnify is of a different nature from the seller's or supplier's usual obligations as regards the quality of goods or services and is an insurance obligation.
PERG 6.7.17GRP
The following are examples of typical warranty schemes operated by motor dealers. Provided that, in each case, the FCA is satisfied that the obligations assumed by the dealer are not significantly more extensive in content, scope or duration that a dealer's usual obligations as to the quality of motor vehicles of that kind, the FCA would not usually classify the contracts embodying these transactions as contracts of insurance.(1) The dealer gives a verbal undertaking to the purchaser
PERG 6.7.19GRP
Some providers argued that these schemes amount to nothing more than a 'manufacturer's warranty' of their own work, within the scope of PERG 6.7.7 G (Example 3: manufacturers' and retailers' warranties). However, HM Revenue and Customs is expected to make a significant number of random checks of self-assessment forms, irrespective of the quality of the work done by the provider. These random checks are also covered by the schemes. The FCA concluded, therefore, that these schemes
PERG 6.7.21GRP
If, however, a contract of this kind were structured so that the recipient was charged at a commercial rate for any legal services in fact provided, the FCA's approach will be to treat the arrangement as non-insurance. This is principally because, by taking on obligations of this kind, the provider does not assume a relevant risk (see PERG 6.7.6 G). The position might be different if the solicitor carries the additional obligation to pay for alternative legal services to be provided
SUP 5.3.1GRP
The appointment of a skilled person to produce a report under section 166 of the Act (Reports by skilled persons) is one of the FCA's5 regulatory tools. The tool may be used:66(1) for diagnostic purposes, to identify, assess and measure risks; (2) for monitoring purposes, to track the development of identified risks, wherever these arise;(3) in the context of preventative action, to limit or reduce identified risks and so prevent them from crystallising or increasing; and (4)
SUP 5.3.2GRP
The decision by the FCA5 to require a report by a skilled person under section 166 of the Act5 (Reports by skilled persons) 6will normally be prompted by a specific requirement for information, analysis of information, assessment of a situation,4 expert advice or recommendations or by a decision to seek assurance in relation to a regulatory return4. It may4 be part of the risk mitigation programme applicable to a firm, or the result of an event or development relating or relevant
SUP 5.3.2AGRP
6The decision by the FCA5 to require the collection or updating of information by a skilled person under section 166A of the Act (Appointment of skilled person to collect and update information) will be prompted where the FCA5 considers there has been a breach of a requirement by a firm to collect, and keep up to date, information of a description specified in the FCA's5rules.
SUP 5.3.3GRP
When making the decision to require a report by a skilled person under section 166 (Reports by skilled persons) or the collection or updating of information by a skilled person under section 166A (Appointment of skilled person to collect and update information) of the Act, the FCA5 will have regard, on a case-by-case basis, to all relevant factors. Those are likely to include:66(1) circumstances relating to the firm;(2) alternative tools available, including other statutory powers;(3)
SUP 5.3.4GRP
The FCA5 will have regard to circumstances relating to the firm, for example:66(1) attitude of the firm: whether the firm is being cooperative;(2) history of similar issues: whether similar issues have arisen in the past and, if so, whether timely corrective action was taken;(3) quality of a firm's systems and records: whether the FCA5 has confidence that the firm has the ability to provide the required information;66(4) objectivity: whether the FCA5 has confidence in the firm's
SUP 5.3.5GRP
The FCA5 will have regard to alternative tools that may be available, including for example:66(1) obtaining what is required without using specific statutory powers (for example, by a visit by staff5 of the FCA5 or a request for information on an informal basis); 66(2) requiring information from firms and others, including authorising an agent to require information, under section 165 of the Act (Power6 to require information);6(3) appointing investigators to carry out general
SUP 5.3.6GRP
The FCA5 will have regard to legal and procedural considerations including:66(1) statutory powers: whether one of the other available statutory powers is more appropriate for the purpose than the power in section 166 (Reports by skilled persons) or section 166A (Appointment of skilled person to collect and update information) of the Act;66(2) subsequent proceedings: whether it is desirable to obtain an authoritative and independent report for use in any subsequent proceedings;
SUP 5.3.7GRP
The FCA5 will have regard to the objectives of its enquiries, and the relative effectiveness of its available powers to achieve those objectives. For example:66(1) historic information or evidence: if the objectives are limited to gathering historic information, or evidence for determining whether enforcement action may be appropriate, the FCA's5 information gathering and investigation powers under sections 165 (Power to require information), 167 (Appointment of investigator
SUP 5.3.8GRP
In accordance with its general policy the FCA5 will have regard to the question of cost, which is particularly pertinent in relation to skilled persons because:66(1) if the FCA5 uses the section 166 power (Reports by skilled persons) or the section 166A power (Appointment of skilled person to collect and update information), either 6the firm will appoint, and will have to pay for the services of, the skilled person, or the FCA5 will appoint, and will require under FEES 3.2.7
SUP 5.3.9GRP
In having regard to the cost implications of using the section 166 power (Reports by skilled persons) or the section 166A power (Appointment of skilled person to collect and update information) 6alternative options (such as visits) or other powers, the FCA5 will take into account relevant factors, including:66(1) whether the firm may derive some benefit from the work carried out and recommendations made by the skilled person, for instance a better understanding of its business
SUP 5.3.10GRP
The FCA5 will have regard to FCA5-related considerations including:6666(1) FCA5 expertise: whether the FCA5 has the necessary expertise; and6666(2) FCA5 resources: whether the resources required to produce a report or to make enquiries or to appoint a skilled person itself6 are available within the FCA5, or whether the exercise will be the best use of the FCA's5 resources at the time.666666
SUP 15.14.3DRP
A full credit institution to which regulation 105 of the Payment Services Regulations applies must notify the FCA if it refuses a request for access to payment account services from:(1) a person falling within paragraphs (1)(a) to (e) (excluding (1)(d)) of the Glossary definition of payment service provider; or(2) an applicant for authorisation or registration as such a payment service provider.
SUP 15.14.6DRP
Unless the FCA directs otherwise, a notification required by regulation 105(3) of the Payment Services Regulations and SUP 15.14.3D must be submitted by the full credit institution to the FCA: (1) in the form specified in SUP 15 Annex 9D; (2) by electronic means made available by the FCA; and(3) at the same time as it informs the person referred to in SUP 15.14.3D(1) or (2) of its refusal.
SUP 15.14.8GRP
The direction in SUP 15.14.6D will not apply if the FCA gives a different direction to a specific credit institution, in the light of the particular circumstances surrounding a refusal of access to payment account services, about how to notify the FCA. The FCA is likely to be minded to do so where a credit institution decides to withdraw access to a large number of persons falling within paragraphs (1)(a) to (e) (excluding (1)(d)) of the Glossary definition of payment service
SUP 15.14.9GRP
Credit institutions are reminded of the general notification requirements in SUP 15.3, including the obligation to notify the FCA as soon as they become aware of any matter (including a matter which may occur in the foreseeable future) which could affect their ability to continue to provide adequate services to their customers and which could result in serious detriment to a customer of the credit institution (SUP 15.3.1R(3)).
SUP 15.14.10DRP
An account servicing payment service provider to which regulation 71(8)(c) of the Payment Services Regulations applies must notify the FCA if it denies an account information service provider or a payment initiation service provider access to a payment account under regulation 71(7).
SUP 15.14.12DRP
A notification required by regulation 71(8)(c) of the Payment Services Regulations and SUP 15.14.10D must be submitted by the account servicing payment service provider to the FCA: (1) in the form specified in SUP 15 Annex 10(2) by electronic means made available by the FCA; and (3) immediately after the first occasion on which it denies the account information service provider or the payment initiation service provider in question access to a payment account.
SUP 15.14.14GRP
Where an account servicing payment service provider has already submitted a notification in accordance with regulation 71(8)(c) of the Payment Services Regulations and SUP 15.14.10D and continues to deny access to a payment account, it is not required to notify the FCA of a consecutive denial of access that happens after the original notification was sent if it: (1) is in respect of the same account information service provider or payment initiation service provider; and(2) arises
SUP 15.14.15DRP
An account servicing payment service provider that has previously submitted a notification in accordance with regulation 71(8)(c) of the Payment Services Regulations and SUP 15.14.10D must notify the FCA if it subsequently restores access to the payment account for the account information service provider or payment initiation service provider that was the subject of the original notification, unless it indicated in the first notification that it intended to immediately restore
SUP 15.14.16DRP
A notification required under SUP 15.14.15D must be submitted by the account servicing payment service provider to the FCA:(1) in the form specified in SUP 15 Annex 10; (2) by electronic means made available by the FCA; and (3) immediately after it restores access to the payment account(s) for the account information service provider or payment initiation service provider.
SUP 15.14.18GRP
Regulation 99(1) of the Payment Services Regulations provides that, if a payment service provider becomes aware of a major operational or security incident, the payment service provider must, without undue delay, notify the FCA. The purpose of this section is to direct the form and manner in which such notifications must made and the information they must contain, in exercise of the power in regulation 100(2) of the Payment Services Regulations.
SUP 15.14.19GRP
The EBA has issued Guidelines on incident reporting under the Payment Services Directive that specify the criteria a payment service provider should use to assess whether an operational or security incident is major and needs to be reported to the FCA. These Guidelines also specify the format for the notification and the procedures the payment service provider should follow.
SUP 15.14.21DRP
In particular, a notification required by regulation 99(1) of the Payment Services Regulations must be submitted by the payment service provider to the FCA:(1) within the timescales and at the frequencies specified in the EBA’s Guidelines on incident reporting under the Payment Services Directive (EBA/GL/2017/10)3;(2) in writing on the form specified in SUP 15 Annex 11D; and(3) by such electronic means as the FCA may specify.
SUP 15.14.23GRP
Where the electronic means of submission of notifications is known not to be available or operated at the time the incident is first detected, the notification should be sent to the FCA as soon as the electronic means of submission becomes available and operational again. Unless the FCA has informed a specific payment service provider that electronic means of submission are also available to it and operated at other times, the electronic means of submission are available and operated
SUP 15.14.26GRP
Payment service providers are reminded that regulation 142 of the Payment Services Regulations (Misleading the FCA or the Payment Systems Regulator) makes it an offence for a person to knowingly or recklessly provide the FCA with information which is false or misleading in a material particular in purported compliance with the directions given in this section or any other requirement imposed by or under the Payment Services Regulations.
SUP 15.14.28GRP
The Financial Services and Markets Act 2000 (Service of Notices) Regulations 2001 (SI 2001/1420) contain provisions relating to the service of documents on the FCA. They do not apply to notifications required under this section because of the specific directions given in this section.
SUP 5.4.1GRP
Where the FCA1 requires a report by a skilled person under section 166 of the Act1 (Reports by skilled persons), the FCA1 will send a notice in writing requiring the person in SUP 5.2.1 G to provide a report by a skilled person, or notifying the person in SUP 5.2.1 G in writing of the FCA's1 appointment of a skilled person to provide a report,2 on any matter if it is reasonably required in connection with the exercise of its functions conferred by or under the Act. The FCA1
SUP 5.4.1AGRP
2Where the FCA1 requires the updating or collection of information by a skilled person under section 166A of the Act (Appointment of skilled person to collect and update information), the FCA1 will send a notice in writing requiring the firm to appoint a skilled person, or notifying the firm of the FCA's1 appointment of a skilled person, to collect or update the relevant information.
SUP 5.4.2GRP
As part of the decision making process the FCA1 will normally contact the person in SUP 5.2.1 G or in SUP 5.2.2 G2 to discuss its needs before finalising its decision to require a report or the updating or collection of information by a skilled person. This will provide an opportunity for discussion about the appointment, whether an alternative means of obtaining the information would be better, what the scope of a report should be, who should be appointed, who should appoint,
SUP 5.4.3GRP
The FCA1 will give written notification to the person in SUP 5.2.1 G or SUP 5.2.2 G2 of the purpose of the report or collection or updating of information,2 its scope, the timetable for completion and any other relevant matters. The FCA1 will state the matters which the report is to contain, or the information which is to be collected or updated,2 as well as any requirements as to the report's format. For example, a report on controls may be required to address key risks, key
SUP 5.4.4GRP
The written notification in SUP 5.4.3 G may be preceded or followed by a discussion of the FCA's1 requirements and the reasons for them. This may involve the FCA1 the person in SUP 5.2.1 G or in SUP 5.2.2 G2 and the person who has been, or is expected to be, appointed as the skilled person. The FCA1 recognises that there will normally be value in holding discussions involving the skilled person at this stage. These discussions may include others if appropriate. 222222
SUP 5.4.5GRP
The FCA1 will wish to conduct the discussion with the firm, the skilled person1 and any others within a timescale appropriate to the circumstances of the case.22
SUP 5.4.7GRP
A skilled person must appear to the FCA1 to have the skills necessary to make a report on the matter concerned or collect or update the relevant information.2 A skilled person may be an accountant, lawyer, compliance consultant,2actuary or person with relevant business, technical or technological skills.22
SUP 5.4.8GRP
When considering whether to nominate, approve or appoint a skilled person to make a report or collect or update information, the FCA1 will have regard to the circumstances of the case, including whether the proposed skilled person appears to have:22(1) the skills necessary to make a report on the matter concerned or collect or update the relevant information;2(2) the ability to complete the report or collect or update the information within the time expected by the FCA1; 22(3)
SUP 5.4.9GRP
In appropriate circumstances, it may be cost effective for the FCA1 to nominate or approve the appointment of, or appoint itself,2 a skilled person who has previously acted for, or advised, the person in SUP 5.2.1 G or SUP 5.2.2 G.2 For example, the FCA1 may nominate or approve the appointment of, or appoint,2 the auditor of a person in SUP 5.2.1 G or SUP 5.2.2 G2 to prepare a report or collect or update the information2 taking into account, where relevant, the considerations
SUP 5.4.10GRP
Where the skilled person is appointed by the person in SUP 5.2.1 G or SUP 5.2.2 G, the FCA1 will normally require the skilled person to be appointed to report to the FCA1 through that person. In the normal course of events the FCA1 expects that the person in SUP 5.2.1 G or SUP 5.2.2 G2 will be given the opportunity to provide written comments on the report or the collection of the relevant information prior to its submission to the FCA1. 222222222
SUP 5.4.10AGRP
2Where the skilled person is to be appointed by the FCA1 itself, the skilled person will report directly to the FCA1.
SUP 5.4.11GRP
The FCA1 may enter into a dialogue with the skilled person, and is ready to discuss matters relevant to the report or the collection or updating of the relevant information2 with that person1, during the preparation of the report or the collection or updating of the relevant information.2 Such discussions may2 involve or be through the person in SUP 5.2.1 G or SUP 5.2.2 G.2222
SUP 5.4.12GRP
The FCA1 will normally specify a time limit within which it expects the skilled person to deliver the report or collect or update the relevant information. Where the skilled person is appointed by the person in SUP 5.2.1 G or SUP 5.2.2 G, the2skilled person should, in complying with its contractual duty under SUP 5.5.1 R, take reasonable steps to achieve delivery by that time. If the skilled person becomes aware that the report may not be delivered, or collection or updating
SUP 10A.14.1GRP
An FCA-approved person's job may change from time to time as a result, for instance, of a change in personal job responsibilities or a firm'sregulated activities. Where the changes will involve the person performing one or more FCA controlled functions different from those for which approval has already been granted, then an application must be made to the FCA for approval for the person to perform those FCA controlled functions. The firm must take reasonable care to ensure that
SUP 10A.14.2GRP
If:7(1) a firm is applying for approval for someone to perform a controlled function under this chapter; and 7(2) that person is also ceasing to perform FCA controlled functions or a PRA controlled function in relation to the same firm or in relation to a firm in the same group;7the firm should generally use Form E. Further details can be found in SUP 10A.14.4D.75555
SUP 10A.14.6GRP
If it is proposed that an FCA-approved person will no longer be performing an FCA controlled function under an arrangement entered into by the appointed representative of one principal7, but will be performing the same or a different FCA controlled function under an arrangement entered into by the appointed representative of a new principal7, the new principal7 will be required to make a fresh application for the performance of the FCA controlled function by that person. This
SUP 10A.14.7GRP
[deleted]5
SUP 10A.14.8RRP
(1) A firm must submit to the FCA a completed Form C (SUP 10C Annex 5R)5 no later than ten4 business days after an FCA-approved person ceases to perform an FCA controlled function.2(2) If:2(a) the firm is also making an application for approval for that approved person to perform a controlled function in relation to7 the same firm or to a firm in the same7group; and2(b) ceasing to perform the FCA controlled function in (1) has triggered a requirement to make that application for
SUP 10A.14.10RRP
(1) A firm must notify the FCA as soon as practicable after it becomes aware, or has information which reasonably suggests, that it will submit a qualified Form C in respect of an FCA-approved person.(2) Form C is qualified if the information it contains:(a) relates to the fact that the firm or the appointed representative7 has dismissed, or suspended, the FCA-approved person from its employment; or(b) relates to the resignation by the FCA-approved person while under investigation
SUP 10A.14.11GRP
Notification under SUP 10A.14.10 R may be made by telephone, email or fax and should be made, where possible, within one business day of the firm becoming aware of the information. If the firm does not submit Form C, it should inform the FCA in due course of the reason. This could be done using Form D, if appropriate.
SUP 10A.14.12GRP
A firm is responsible for notifying the FCA if any FCA-approved person has ceased to perform an FCA controlled function under an arrangement entered into by its appointed representative or former appointed representative.
SUP 10A.14.13GRP
A firm can submit Form C or Form E 6to the FCA in advance of the cessation date. When a person ceases the arrangement under which they perform4 an FCA controlled function, they4 will automatically cease to be an FCA-approved person in relation to that FCA controlled function. A person can only be an FCA-approved person in relation to a specific FCA controlled function. Therefore, a person is not an FCA-approved person during any period between ceasing to perform one FCA controlled
SUP 10A.14.15RRP
If an FCA-approved person's title, name or national insurance number changes, the authorised approved person employer7 must notify the FCA on Form D (SUP 10C Annex 6R)5 of that change within seven business days of the firm becoming aware of the matter.
SUP 10A.14.16GRP
The duty to notify in SUP 10A.14.15 R does not apply to changes to an FCA-approved person's private address.
SUP 10A.14.17RRP
If a firm becomes aware of information which would reasonably be material to the assessment of an FCA-approved person's, or a FCA candidate's, fitness and propriety (see FIT), it must inform the FCA on Form D, or (if it is more practical to do so and with the prior agreement of the FCA) by e-mail or fax, as soon as practicable.
SUP 10A.14.19GRP
Failing to disclose relevant information to the FCA may be a criminal offence under section 398 of the Act.
SUP 10A.14.21GRP
(1) If, in relation to a firm which has completed the relevant Form A (SUP 10C Annex 3D7), any of the details relating to arrangements and FCA controlled functions are to change, the firm must notify the FCA on Form D (SUP 10C Annex 6R5). (2) The notification under (1) must be made as soon as reasonably practicable after the firm becomes aware of the proposed change.(3) This also applies in relation to an FCA controlled function for which an application was made using Form E.(4)
SUP 10A.14.23GRP
An example of where a firm should use Form D is when an individual who is appointed by one appointed representative becomes employed by another appointed representative but continues to perform the customer function for the firm. The firm should notify the FCA by completing Section 1.07 of Form D.
SUP 16.3.8RRP
A written report must be delivered to the FCA28 by one of the methods listed in SUP 16.3.9 R.224949
SUP 16.3.9RRP

Method of submission of reports (see SUP 16.3.8 R)

228

Method of delivery

1.

Post or hand deliver33 to the published address of the FCA49 for submission of reports. If hand delivering mark the report for the attention of ‘Central Reporting’ and obtain a dated receipt.33

49

2.

[deleted]33

224949

3.

Electronic mail to the published e-mail address 33of the FCA's49 Central Reporting team.22

2249

4.22

Online submission via the appropriate systems accessible from the22FCA28 website

4949822
SUP 16.3.10GRP
  1. (1)

    The 33published address of the FCA49 for postal submission of reports is:

    49

    Central Reporting22

    The Financial Conduct49 Authority

    49

    PO BOX 35747

    London E14 5WP

  2. (2)

    The 33published address of the FCA49 for hand delivery of reports is:

    49
    1. (a)

      Central Reporting22

      The Financial Conduct Authority38

      4949

      12 Endeavour Square35

      London, E20 1JN35

      if the firm's usual supervisory contact at the FCA28 is based in London, or:

      4949
    2. (b)

      Central Reporting33

      The Financial Conduct Authority38

      4949

      Quayside House

      127 Fountainbridge

      Edinburgh EH3 8DJ

      if the firm's usual supervisory contact at the FCA49 is based in Edinburgh.2

      49
  3. (3)

    The current published email address 33for the FCA’s Central Reporting team is regulatory.reports@fca.org.uk. Please note that the 33Central Reporting team does not handle general correspondence between firms and the FCA, and will not respond to queries3338. Accordingly, firms should not make submissions to the Central Reporting team’s email address33 other than as directed in SUP 16.3.8R.

    2233494949332833494933
SUP 16.3.11RRP
A firm must submit reports required under this chapter to the FCA28 containing all the information required.4949
SUP 16.3.12GRP
SUP 15.6 refers to and contains requirements regarding the steps that firms must take to ensure that information provided to the FCA28 is accurate and complete. Those requirements apply to reports required to be submitted under this chapter.4949
SUP 16.3.13RRP
(1) A firm must submit a report required by this chapter in the frequency, and so as to be received by the FCA28 no later than the due date, specified for that report.4949(2) If the due date for submission of a report required by this chapter falls on a day which is not a business day, the report must be submitted so as to be received by the FCA28 no later than the first business day after the due date. 4949(3) If the due date for submission of a report required by this chapter
SUP 16.3.14AGRP
9Failure to submit a report in accordance with the rules in, or referred to in,12 this chapter or the provisions of relevant legislation12 may also lead to the imposition of a financial penalty and other disciplinary sanctions. A firm may be subject to reporting requirements under relevant legislation other than the Act, not referred to in this chapter. An example of this is reporting to the FCA28 by building societies under those parts of the Building Societies Act 1986 which
SUP 16.3.15GRP
The FCA28 may from time to time send reminders to firms when reports are overdue. Firms should not, however, assume that the FCA28 has received a report merely because they have not received a reminder.1494949
SUP 16.3.16GRP
The firm is responsible for ensuring delivery of the required report38 by the due date. If a report is received by the FCA28 after the due date and the firm believes its delivery arrangements were adequate, it may be required to provide proof of those arrangements. Examples of such proof would be:494949(1) "proof of posting" receipts from a UK post office or overseas equivalent which demonstrates that the report was posted early enough to allow delivery by the due date in accordance
SUP 16.3.17RRP
(1) A firm must notify the FCA28 if it changes its accounting reference date.4949(2) When a firm extends its accounting period, it must make the notification in (1) before the previous accounting reference date.(3) When a firm shortens its accounting period, it must make the notification in (1) before the new accounting reference date.4(4) SUP 16.10.4A R to SUP 16.10.4C G (Requirement to check the accuracy of standing data and to report changes to the FCA38) apply to any notification
SUP 16.3.18GRP
SUP 16.2.1 G emphasises the importance to the FCA28 of timely and accurate information. The extension of a firm's accounting period to more than 15 months may hinder the timely provision of relevant and important information to the FCA.38 This is because many due dates for reporting to the FCA28 are linked to firms'accounting reference dates. Indeed, for some categories of firm, the only reports required by the FCA28 have due dates for submission which are linked to the firm's
SUP 16.3.19GRP
If more than one firm in a group intends to change its accounting reference date at the same time, a single notification may be given to the FCA,38 as described in SUP 15.7.8 G.284949
SUP 16.3.22GRP
The Financial Services and Markets Act 2000 (Service of Notices) Regulations 2001 (SI 2001/1420) contain provisions relating to the service of documents on the FCA.38 They do not apply to reports required under SUP 1638, because of the specific rules in this section.284949
SUP 16.3.23GRP
When the FCA28 receives a report which contains confidential information and whose submission is required under this chapter, it is obliged under Part 23 of the Act38 (Public Record, Disclosure of Information and Co-operation) to treat that information as confidential. (See SUP 2.2.4G38) 4949494949
SUP 16.3.24GRP
SUP 2.3.12AG states that the FCA38 may pass to other regulators information which it has in its possession. Such information includes information contained in reports submitted under this chapter. The FCA’s disclosure of information to other regulators is subject to SUP 2.2.4G38 (Confidentiality of information). 49284928494949
IFPRU 4.3.3GRP
The FCA will, taking into account the nature, scale and complexity of a firm's activities, monitor that it does not solely or mechanistically rely on external credit ratings for assessing the creditworthiness of an entity or financial instrument.[Note: article 77(2) of CRD]
IFPRU 4.3.4GRP
Article 20(6) of the UK CRR2 states that, where the IRB approach is used on a unified basis by those entities which fall within the scope of article 20(6)2, the FCA is required to permit certain IRB requirements to be met on a collective basis by members of that group. In particular, the FCA considers that, where a firm is reliant upon a rating system or data provided by another member of its group, it will not meet the condition that it is using the IRB approach on a unified
IFPRU 4.3.5GRP
Prior to reliance being placed by a firm on a rating system or data provided by another member of the group, the FCA expects the proposed arrangements to have been explicitly considered, and found to be appropriate, by the governing body of the firm.
IFPRU 4.3.6GRP
If a firm uses a rating system or data provided by another group member, the FCA would expect the firm'sgoverning body to delegate those functions formally to the persons or bodies that are to carry them out.
IFPRU 4.3.7GRP
Where a firm seeks to demonstrate to the FCA that the effect of its non-compliance with the requirements of Part Three, Title II Chapter 3 of the UK CRR3 (Internal ratings based approach) is immaterial under article 146(b) of the UK CRR3 (Measures to be taken where the requirements cease to be met), the FCA expects the firm to have taken into account all instances of non-compliance with the requirements of the IRB approach and to have demonstrated that the overall effect of non-compliance
IFPRU 4.3.8GRP
(1) Where the firm's rating systems are used on a unified basis under article 20(6) of the UK CRR2, the FCA considers that the governance requirements in article 189 of the UK CRR2 can only be met if the subsidiaries have delegated to the governing body or designated committee of the UK parent institution, UK parent financial holding company or UK parent mixed financial holding company2 responsibility for approval of the firm's rating systems.(2) The FCA expects an appropriate
IFPRU 4.3.9GRP
The FCA expects a firm seeking to apply the Standardised Approach on a permanent basis to certain exposures to have a well-documented policy explaining the basis on which exposures are to be selected for permanent exemption from the IRB approach. This policy should be provided to the FCA when the firm applies for permission to use the IRB approach and maintained thereafter. Where a firm also wishes to undertake sequential implementation, the FCA expects the firm's roll-out plan
IFPRU 4.3.10GRP
(1) The FCA may permit the exemption of exposures to sovereigns and institutions under article 150(1)(a) and (b) of the UK CRR3 respectively only if the number of material counterparties is limited and it would be unduly burdensome to implement a rating system for such counterparties.(2) The FCA considers that the 'limited number of material counterparties' test is unlikely to be met if for the UK group total outstandings to 'higher risk' sovereigns and institutions exceed either
IFPRU 4.3.11GRP
Where a firm wishes permanently to apply the Standardised Approach to certain business units on the grounds that they are non-significant and/or certain exposure classes or types of exposures on the grounds that they are immaterial in terms of size and perceived risk profile, the FCA expects to permit a firm to make use of this exemption only to the extent that the risk-weighted exposure amount calculated under article 92(3)(a) and (f) of the UK CRR3 that are based on the Standardised
IFPRU 4.3.12GRP
The following points set out the level at which the FCA expects the 15% test to be2 applied for a firm that is a member of a group:(1) if a firm is part of a group subject to consolidated supervision in the UK2 and for which the FCA is the consolidating supervisor, the calculations in (1) are carried out with respect to the wider group;(2) if a firm is part of a group subject to consolidated supervision in the UK2 and for which the FCA is not the consolidating supervisor the calculation
IFPRU 4.3.14GRP
Where a firm wishes to permanently apply the Standardised Approach to exposures to connected counterparties in accordance with article 150(1)(e) of the UK CRR3, the FCA would normally expect to grant permission to do so only if the firm had a policy that provided for the identification of connected counterparties exposures that would be permanently exempted from the IRB approach and also identified connected counterparty exposures (if any) that would not be permanently exempted
IFPRU 4.3.15GRP
In the event that a firm with IRB permission acquires a significant new business, it should discuss with the FCA whether sequential roll-out of the firm's IRB approach to these exposures would be appropriate. In addition, the FCA would expect to review any existing time period and conditions for sequential roll-out and determine whether these remain appropriate (see article 148 of the UK CRR3).
IFPRU 4.3.17GRP
The FCA expects a firm to ensure that all documentation relating to its rating systems (including any documentation referenced in this chapter or required by the UK CRR3 that relate to the IRB approach) is stored, arranged and indexed in such a way that it could make them all, or any subset thereof, available to the FCA immediately on demand or within a short time thereafter.
SUP 2.3.1GRP
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
SUP 2.3.2GRP
The FCA4 expects to request meetings or access to business premises during reasonable business hours. The FCA4 also normally expects to be able to give reasonable notice to a firm or connected person when it seeks information, documents, meetings or access to business premises. On rare occasions, however, the FCA4 may seek access to premises without notice. The prospect of unannounced visits is intended to encourage firms to comply with the requirements and standards under
SUP 2.3.3GRP
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
SUP 2.3.4GRP
In complying with Principle 11, the FCA4 considers that a firm should take reasonable steps to ensure that the following persons act in the manner set out in SUP 2.3.3 G: (1) its employees, agents and appointed representatives; and(2) any other members of its group, and their employees and agents.(See also, in respect of appointed representatives, SUP 12.5.3 G (2)).
SUP 2.3.5RRP
(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
SUP 2.3.6GRP
The FCA4 normally expects to give reasonable notice of a visit (See SUP 2.3.2 G).
SUP 2.3.7RRP
(1) A firm must take reasonable steps to ensure that each of its suppliers under material outsourcing arrangements deals in an open and cooperative way with the FCA in the discharge of its functions under the Act in relation to the firm.6(2) The requirement in (1) does not apply to a regulated benchmark administrator where the material outsourcing arrangements relate to the carrying on of the regulated activity of administering a benchmark.64
SUP 2.3.8GRP
The cooperation that a firm is expected to procure from such suppliers is similar to that expected of the firm, in the light of the guidance in SUP 2.3.3 G to SUP 2.3.4 G, but does not extend to matters outside the scope of the FCA's4 functions in relation to the firm. SUP 2.3.5 R (2) also requires a firm to take reasonable steps regarding access to the premises of such suppliers.
SUP 2.3.9GRP
When a firm appoints or renews the appointment of a supplier under a material outsourcing arrangement, it should satisfy itself that the terms of its contract with the supplier require the supplier to give the FCA4 access to its premises as described in SUP 2.3.5 R (2), and to cooperate with the FCA4 as described in SUP 2.3.7 R. The FCA4 does not consider that the 'reasonable steps' in SUP 2.3.7 R would require a firm to seek to change a contract, already in place either7 when
SUP 2.3.10GRP
The FCA4 will normally seek information from the firm in the first instance, but reserves the right to seek it from a supplier under a material outsourcing arrangement if the FCA4 considers it appropriate.
SUP 2.3.11GRP
The FCA4 may ask a firm to provide it with information at the request of or on behalf of other regulators to enable them to discharge their functions properly. Those regulators may include overseas regulators or the Takeover Panel. The FCA4 may also, without notifying a firm, pass on to those regulators information which it already has in its possession. The FCA's4 disclosure of information to other regulators is subject to the obligation described in SUP 2.2.4 G (Confidentiality
SUP 2.3.12AGRP
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).
REC 5.2.1GRP
An applicant for recognised body status needs to demonstrate to the FCA5 that it is able to meet the recognised body requirements31before a recognition order can be made. Once it has been recognised, a recognised body has to comply with the recognised body requirements31at all times. (Guidance on the recognised body requirements3 applicable to UK recognised bodies (and applicants) is given in REC 2 and REC 2A).35333
REC 5.2.1AGRP
In addition, under section 290A of the Act (Refusal of recognition on ground of excessive regulatory provision), the FCA5 must refuse to make a recognition order in relation to a body applying for recognition as a UK RIE if it appears to the FCA5 that an existing or proposed regulatory provision of the applicant in connection with the applicant's business as an investment exchange or the provision by the applicant of clearing facilitation services5 imposes, or will impose, an
REC 5.2.2GRP
(1) There is no standard application form. A prospective applicant should contact the Markets Division at the FCA5 at an early stage for advice on the preparation, scheduling and practical aspects of its application.5(2) It is very important, if an application is to be processed smoothly and in a reasonable time, that it is comprehensively prepared and based on a well-developed and clear proposal.
REC 5.2.3GRP
An application should:(1) be made in accordance with any directions the FCA5 may make under section 287 (Application by an investment exchange) of the Act6;533553(2) in the case of an application under section5 287 of the Act, 3be accompanied by the applicant's regulatory provisions and in the case of an application under section 287 of the Act information required pursuant to sub-sections 287(3)(c), (d) and (e) of the Act (see REC 5.2.3A G) 1(the material specifically prescribed
REC 5.2.5GRP
A prospective applicant who is an authorised person may wish to consult the FCA5 about the extent to which information which it has already supplied in connection with its status as an authorised person can be used to support an application to become a UK recognised body. 5
REC 5.2.5AGRP
[deleted]6355
REC 5.2.6GRP
Under section 289 of the Act (Applications: supplementary)6 the FCA5 may require the applicant to provide additional information, and may require the applicant to verify any information in any manner. In view of their likely importance for any application, the FCA5 will normally wish to arrange for its own inspection of an applicant's information technology systems.355
REC 5.2.6AGRP
1In the case of an application to become a UK RIE6 under subsection 290(1B) of the Act6, the application must be determined by the FCA5 before the end of the period of six months beginning with the date on which it receives the completed application.335
REC 5.2.7GRP
At any time after making a formal application, the applicant may make amendments to its rules, guidance or any other part of its application submitted to the FCA.555
REC 5.2.8GRP
(1) The FCA5 will keep the applicant informed of the progress of the application.5(2) It may be necessary to ask the applicant to clarify or amplify some aspects of its proposals. The FCA5 may wish to discuss various aspects of the application and may invite the applicant to attend one or more meetings for that purpose. When requested to do so, the FCA5 will explain the nature of the information which it has asked an applicant to supply in connection with its application.55
REC 5.2.12GRP
Where the FCA5 considers that it is unlikely to make a recognition order it will discuss its concerns with the applicant as early as possible with a view to enabling the applicant to make changes to its rules or guidance, or other parts of the application (see REC 5.2.7 G). If the FCA5 decides that it will not make a recognition order, it will follow the procedure set out in section 298 of the Act (Directions and revocation: procedure) 6and described in more detail in REC 4.8
REC 5.2.14GRP

Information and supporting documentation (see REC 5.2.4 G).

(1)

Details of the applicant's constitution, structure and ownership, including its memorandum and articles of association (or similar or analogous documents ) and any agreements between the applicant, its owners or other persons relating to its constitution or governance (if not contained in the information listed in REC 5.2.3A G)1. 6

3

(2)

Details of all business to be conducted by the applicant, whether or not a regulated activity (if not contained in the information listed in REC 5.2.3A G)1.

(3)

Details of the facilities which the applicant plans to operate, including details of the trading platform6, settlement arrangements, clearing facilitation services5 and custody services which it plans to supply. 6

35443

(4)

Copies of the last three annual reports and accounts and, for the current financial year, quarterly management accounts.

(5)

Details of its business plan for the first three years of operation as a UK recognised body (if not contained in the information listed in REC 5.2.3A G)1.

(6)

A full organisation chart and a list of the posts to be held by key individuals (with details of the duties and responsibilities) and the names of the persons proposed for these appointments when these names are available (if not contained in the information listed in REC 5.2.3A G)1.

(7)

Details of its auditors, bankers, solicitors and any persons providing corporate finance advice or similar services (such as reporting accountants) to the applicant.

(8)

Details of any relevant functions to be outsourced or delegated, with copies of relevant agreements.

(9)

Details of information technology systems and of arrangements for their supply, management, maintenance and upgrading, and security.

(10)

Details of all plans to minimise disruption to operation of its facilities in the event of the failure of its information technology systems.

(11)

Details of internal systems for financial control, arrangements for risk management and insurance arrangements to cover operational and other risks.

(12)

Details of its arrangements for managing any counterparty risks.

5

(13)

Details of internal arrangements to safeguard confidential or privileged information and for handling conflicts of interest.

(14)

Details of arrangements for complying with the notification rules and other requirements to supply information to the FCA5.

5

(15)

Details of the arrangements to be made for monitoring and enforcing compliance with its rules and with its clearing, settlement and default arrangements.

(16)

A summary of the legal due diligence carried out in relation to ascertaining the enforceability of its rules (including default rules) and the results and conclusions reached.

5

(17)

Details of the procedures to be followed for declaring a member in default, and for taking action after that event to close out positions, protect the interests of other members and enforce its default rules.

(18)

Details of membership selection criteria, rules and procedures.6

3

(19)

Details of arrangements for recording transactions effected by, or cleared through, its facilities.

(20)

Details of arrangements for detecting financial crime and market abuse , including arrangements for complying with money laundering law.

(21)

Details of criteria, rules and arrangements for selecting specified investments to be admitted to trading on (or cleared by) an RIE and, where relevant, details of how information regarding specified investments will be disseminated to users of its facilities.

5

(22)

Details of arrangements for cooperating with the FCA5 and other appropriate authorities, including draft memoranda of understanding or letters.

5

(23)

Details of the procedures and arrangements for making and amending rules, including arrangements for consulting on rule changes.

(24)

Details of disciplinary and appeal procedures, and of the arrangements for investigating complaints.