Related provisions for LR 11.1.1B
341 - 360 of 1033 items.
(1) A firm must monitor the transactions made by clients using the service to identify:
(a) infringements of the rules of the trading venue; or
(b) disorderly trading conditions; or
(c) conduct which may involve market abuse and which is to be reported to the FCA.(2) A firm must have a binding written agreement with each client which:
(a) details the essential rights and obligations of both parties arising from the provision of the service; and
(b) states that the firm is responsible
A firm must provide the following, at the FCA’s request, within 14 days from receipt of the request:
(1) a description of the systems mentioned in MAR 7A.4.2R(1);
(2) evidence that those systems have been applied; and
(3) information stored in accordance with MAR 7A.4.6R.[Note: article 17(5) of MiFID]
1Where the FCA believes that a company or partnership to which sections 359(1) and 367(1) of the Act applies is, or is likely to become, unable to pay its debts, the FCA will consider whether it is appropriate to seek an administration order or a compulsory winding up order from the court. The FCA's approach will be in two stages: the first is to consider whether it is appropriate to seek any insolvency order; the second is to consider which insolvency order will meet, or is likely
1In determining whether it is appropriate to seek an insolvency order on this basis, the FCA will consider the facts of each case including, where relevant: (1) whether the company or partnership has taken or is taking steps to deal with its insolvency, including petitioning for its own administration, placing itself in voluntary winding up or proposing to enter into a company voluntary arrangement, and the effectiveness of those steps; (2) whether any consumer or other creditor
1After the FCA has determined that it is appropriate to seek an insolvency order, and there is no moratorium in place under Schedule A1 to the Insolvency Act 1986 (as amended by the Insolvency Act 2000) (hereafter referred to in this chapter as 'the 1986 Act'), it will consider whether this order should be an administration order or a compulsory winding up order.
1DEPP 6A sets out the FCA's2 statement of policy with respect to:423323(1) 4the imposition of suspensions or restrictions under sections 88A, 143W8 and 206A of the Act, and the period for which those suspensions or restrictions are to have effect, as required by sections 88C(1), 89S(1) and 210(1) of the Act;4(2) 4the imposition of suspensions, conditions or limitations under section 66 of the Act, the period for which suspensions or conditions are to have effect, and the period
The power to impose a suspension, restriction, condition,4 limitation or disciplinary prohibition4 is a disciplinary measure which the FCA2 may use in addition to, or instead of, imposing a financial penalty
or issuing a public censure.
The principal purpose of imposing such a measure3 is to promote
high standards of regulatory and/or market conduct by deterring persons who have committed breaches from
committing further breaches,
helping to deter other persons from
committing
The powers to impose a suspension, restriction, condition or limitation3 in relation
to authorised persons and approved persons, to impose a restriction on non-authorised parent undertakings of FCA investment firms, members of the management body and employees of non-authorised parent undertakings who are knowingly concerned in contravention of FCA rules8 and to impose a disciplinary prohibition in relation to individuals,4 are disciplinary measures;2 where the FCA2 considers
3The FCA expects to impose a limitation in two situations. The FCA may impose a limitation where it considers it appropriate for an approval to cease to have effect:(1) after a certain period, unless the approved person demonstrates during the period of limitation that it is appropriate for them to be reapproved without the limitation;(2) after a short period, without giving the approved person the opportunity to demonstrate that they should be re-approved.The imposition of a
Principle 4 requires a firm to maintain adequate financial resources. GENPRU 2 sets out provisions that deal specifically with the adequacy of that part of a firm's financial resources that consists of capital resources. The adequacy of a firm'scapital resources needs to be assessed both by that firm and the appropriate regulator. Through its rules, the FCA14 sets minimum capital resources requirements for firms. It also reviews a firm's own assessment of its capital needs,
For the purposes of GENPRU 2.1.9 R, a firm should have systems in place to enable it to be certain whether it has adequate capital resources to comply with14 the main BIPRU firm Pillar 1 rules14 at all times. This does not necessarily mean that a firm needs to measure the precise amount of its capital resources and its CRR on a daily basis. A firm should, however, be able to demonstrate the adequacy of its capital resources at any particular time if asked to do so by the FCA1
The FCA5 expects to maintain a close working relationship with certain
types of firm and expects that
routine supervisory matters arising can be resolved during the normal course
of this relationship by, for example, issuing individual guidance where
appropriate (see SUP 9.3). However,
where the FCA deems it appropriate,
it will exercise its own-initiative powers:55(1) in
circumstances where it considers it appropriate for the firm to
be subject to a formal requirement,
breach
The FCA 5 may also5 seek to exercise its own-initiative
powers in certain situations,5 including
the following:55(1) If
the FCA5 determines
that a firm's management, business
or internal controls give rise
to material risks that are not fully addressed by existing requirements,
the FCA5may
seek to use its own-initiative
powers.555(2) If
a firm becomes or is to become
involved with new products or selling practices which present risks not adequately
addressed by existing requirements,
Pursuant
to sections 55L, 55N, 55O, 55P and 55Q of the Act,
within the scope of its functions and powers, the FCA5may seek to impose requirements which
include but are not restricted to:55(1) requiring
a firm to submit regular reports
covering, for example, trading results, management accounts, customer complaints, connected party transactions;(2) where
appropriate, 5requiring a firm to
maintain prudential limits, for example on large exposures,
foreign currency exposures or
liquidity
The FCA5 will seek to give a firm reasonable
notice of an intent to vary its permission or impose a requirement5 and, except when exercising its additional own-initiative variation power,6 to agree with the firm an
appropriate timescale. However, if the FCA5 considers
that a delay may create a risk to any of the FCA's statutory objectives5,3 the FCA5 may need to act immediately using its powers under section 55J and/or 55L5 of the Act5 with
immediate effect.5535555
Table: To whom does COCON apply? 9
9Persons to whom COCON applies |
Comments9 |
(1) An SMF manager.9 |
|
(2) An employee (“P”) of an SMCR firm12 who:9 (a) performs the function of an SMF manager;9 (b) is not an approved person to perform the function in question; and9 (c) is required to be an approved person at the time P performs that function.9 |
|
(3) An employee of an SMCR firm12 who would be performing an FCA-designated senior management function12 but for SUP 10C.3.13R (The 12-week rule). 9 |
|
(4) A certification employee of an SMCR firm12.9 |
This applies even if the certification employee has not been notified that COCON applies to them or notified of the rules that apply to them.9 |
(5) An employee of an SMCR firm who would be performing an FCA certification function but for SYSC 27.5.1R (Emergency appointments) or SYSC 27.5.3R (Temporary12 UK role). 9 12 |
|
(6) Any employee of an SMCR firm12 not coming within another row of this table, except one listed in column (2) of this row (6) of this table12. 9 |
(A)12 This row (6)12 does not apply to an employee of an SMCR firm12 who only performs functions falling within the scope of the following roles:9 (a) receptionists; (b) switchboard operators; (c) post room staff; (d) reprographics/print room staff; (e) property/facilities management; (f) events management; (g) security guards; (h) invoice processing; (i) audio visual technicians; (j) vending machine staff; (k) medical staff; (l) archive records management; (m) drivers; (n) corporate social responsibility staff; (o) taking part in following activities of the firm:14 14 (i) the firm’s activities as a data controller; or 14(ii) the firm’s activities of data processing; as defined in the data protection legislation, but subject to Note (1) of this table14;data protection legislation;10 (p) cleaners; (q) catering staff; (r) personal assistant or secretary; (s) information technology support (ie, helpdesk); and (t) human resources administrators /processors. 121417 |
(7) [deleted]12 9 |
9 |
(8) A board director of: a UK SMCR firm.12 9999 |
9 |
| 9 | |
14Note (1): A function is only within paragraph (o) of column (2) (Comments) of row (6) of this table if the function does not require the employee concerned to exercise a significant amount of discretion or judgment. |
|
The FCA interprets the phrase ‘dealing with’ in COCON 1.1.10R as including having contact with customers and extending beyond ‘dealing’ as used in the phrase ‘dealing in investments’. ‘Dealing in’ is used in Schedule 2 to the Act to describe, in general terms, the regulated activities which are specified in Part II of the Regulated Activities Order.
6The FCA interprets the phrase ‘a client of the firm in the United Kingdom’ in COCON 1.1.10R as referring to:(1) for a client which is a body corporate, its office or branch in the United Kingdom; or(2) for a client who is an individual, a client who is in the United Kingdom at the time of the dealing.
The purpose of this section is to direct CBTL firms in relation to:the information that they must provide to the FCA on their CBTL business and their compliance with requirements imposed by Schedule 2 to the MCD Order; andthe time at which, and the manner and form in which, they must provide that information.[Note: article 18(1)(c) of the MCD Order]
(1) A CBTL firm must submit a duly completed consumer buy-to-let return to the FCA.(2) The return referred to in (1) must be submitted:(a) in the format set out in SUP 16 Annex 39AD; guidance notes for the completion of the return are set out in SUP 16 Annex 39BG;(b) online through the appropriate systems accessible from the FCA’s website; and(c) within 30 business days following the end of the reporting period.(3) The reporting period is the four calendar quarters beginning on
1The FCA recognises that the use of its powers to disqualify auditors and actuaries will have serious consequences for the auditors or actuaries concerned and their clients; it will therefore exercise its power to impose a disqualification in a way that is proportionate to the particular breach of duty concerned. The FCA will consider the seriousness of the breach of duty when deciding whether to exercise its power to disqualify and the scope of any disqualification.
1Actuaries appointed by firms under rule 4.3.1 of the FCA's Supervision Manual are approved persons and as such will be subject to APER or COCON, as applicable2. When deciding whether to exercise its power to disqualify an actuary who is an approved person, the FCA will consider whether the particular breach of duty can be adequately addressed by the exercise of its disciplinary powers in relation to approved persons.
1In cases where the nature of the breach of duties imposed on the auditors and actuaries under the Act (and/or in the case of actuaries imposed by trust scheme
rules or contractual scheme rules) is such that the FCA has concerns about the fitness and propriety of an individual auditor or actuary, the FCA will consider whether it is appropriate to make a prohibition order instead of, or in addition to, disqualifying the individual.
A firm wishing to include a qualifying subordinated loan in its calculation of liquid capital must:(a) provide the FCA with a copy of the agreement not less than 10 business days before the loan is to be made; and(b) certify to the FCA that the loan agreement complies with the FCA'sprescribed subordinated loan agreement.
(1) 6A must be capable of being effectively supervised by the FCA having regard to all the circumstances including-(a) the nature (including the complexity) of the regulated activities that A carries on or seeks to carry on;(b) the complexity of any products that A provides or will provide in carrying on those activities;(c) the way in which A’s business is organised;(d) if A is a member of a group, whether membership of the group is likely to prevent the FCA’s effective supervision
(1) 6B must be capable of being effectively supervised by the FCA having regard to all the circumstances including-(a) the nature (including the complexity) of the regulated activities that B carries on or seeks to carry on;(b) the complexity of any products that B provides or will provide in carrying on those activities;(c) the way in which B’s business is organised;(d) if B is a member of a group, whether membership of the group is likely to prevent the FCA’s effective supervision
6The guidance in COND 2.3 should be read as applying to both paragraph 2C of Schedule 6 of the Act and, as far as relevant to the discharge by the FCA of its functions under the Act in respect of firms carrying on, or seeking to carry on, a PRA-regulated activity, paragraph 3B of Schedule 6 of the Act.
In assessing the threshold conditions set out in paragraphs 2C and 3B of Schedule 6 to the Act6, factors which the FCA6 will take into consideration include, among other things, whether: 6(1) it is likely that the FCA6 will receive adequate information from the firm, and those persons with whom the firm has close links, to enable it to determine whether the firm is complying with the requirements and standards under the regulatory system for which the FCA is responsible6 and to
So-called 'mortgage clubs' or 'wholesalers' essentially act as a distribution function for lenders, providing information to intermediaries about current deals available from a range of lenders. They provide information (often through an electronic sourcing system) in a way that helps intermediaries search the market effectively and, as such, do not deal directly with individual borrowers. If only engaged in these activities and without direct contact with individual borrowers,
So-called 'mortgage packaging companies' may undertake certain parts of the mortgage process for lenders on an outsourced basis, ensuring that a complete set of documentation is collated and sent to the lender. This might include receiving application forms from intermediaries, undertaking credit reference checks and instructing a valuer. Other activities might include a product placement service for other intermediaries who provide product advice or recommendations to their clients.
The term 'broker packagers' is typically used to describe intermediaries who either market their services directly to borrowers or who offer other intermediaries a complete mortgage outsourcing service. They are often involved in the sales and advice process, including helping the borrower complete application forms. In the FCA's view, broker packagers carrying on these types of activity in direct contact with the borrower are likely to be carrying on the regulated activities
1The CCA Order gives the FCA the power to enforce the CCA through the application of its investigation and sanctioning powers in the Act by reference to the contravention of CCA Requirements and criminal offences under the CCA. The FCA's investigation and sanctioning powers include the following: power to censure or fine an approved person, or impose a suspension or a restriction on their approval under section 66 of the Act, for being knowingly concerned in a contravention by
1The FCA's approach to taking enforcement action under the CCA Order 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, 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
13The FCA performs part of its supervision work by reviewing and analysing information about firms' records of compliance with the requirements and standards under the regulatory system. The type of report the FCA requires will vary, depending on the type of business a firm undertakes. This information helps the FCA to determine whether a firm is complying with the requirements applicable to its business, and what procedures it is operating to ensure its compliance.
(1) [deleted]101313(1A) The breach report from a depositary of an authorised fund to the FCA must include, for each authorised fund for which it is a depositary:10(a) details of all breaches of COLL or FUND, which came to the depositary’s attention or which were reported to the depositary by the authorised fund manager, during the previous month;10(b) details of any changes to the reported details of an existing breach, whether reported under SUP 16.6.8R(1A) or otherwise;10(c)
(1) 10A depositary must submit its breach report under SUP 16.6.8R(1A) using the form REP011 in SUP 16 Annex 12AR.(2) A depositary must submit its oversight report under SUP 16.6.8R(1B) using the form REP012 in SUP 16 Annex 12AR.(3) A depositary must submit the forms in SUP 16 Annex 12AR:(a) online through the appropriate systems accessible from the FCA’s website; or (b) if the appropriate systems are unavailable, via email to fundsupervision@fca.org.uk.
4The FCA may authorise the omission of information required by LR 13.3 to LR 13.6, LR 13.8 and LR 13 Annex 1, if it considers that disclosure of that information would be contrary to the public interest or seriously detrimental to the listed company, provided that that omission would not be likely to mislead the public with regard to facts and circumstances, knowledge of which is essential for the assessment of the matter covered by the circular.
4A request to the FCA to authorise the omission of specific information in a particular case must:(1) be made in writing by the listed company;(2) identify the specific information concerned and the specific reasons for the omission; and(3) state why in the listed company's opinion one or more grounds in LR 13.1.7 G apply.
Section 81 of the Act (supplementary listing particulars) requires
an issuer to submit supplementary listing particulars to the FCA for approval if at any time after listing particulars have been submitted
to the FCA and before the commencement of dealings
in the securities following
their admission to the official list:(1) there is a significant change affecting
any matter contained in those particulars the inclusion of which was required
by:(a) section 80 of the Act (general
An issuer must
ensure that after supplementary listing particulars are
approved by the FCA, the supplementary
listing particulars are filed and published as if the requirements
in PRR 3.2, article 21 of the Prospectus Regulation, the PR Regulation and the Prospectus RTS Regulation applied to them.5223
1If
final terms of the offer are not included in the listing
particulars:(1) the final terms must be provided
to investors and filed with the FCA, and made available to the public,
as if the relevant requirements in PRR 3.2, article 21 of the Prospectus Regulation, the PR Regulation and the Prospectus RTS Regulation4 applied
to them; and(2) the listing
particulars must disclose the criteria and/or the conditions
in accordance with which the above elements will be determined or,
(1) 1The FCA2will seek to deprive a firm of the financial benefit derived directly from the breach (which may include the profit made or loss avoided) where it is practicable to quantify this. The FCA2 will ordinarily also charge interest on the benefit.22(2) Where the success of a firm’s entire business model is dependent on breachingFCArules2 or other requirements of the regulatory system and the breach is at the core of the firm’s regulated activities, the FCA2 will seek to
(1) The FCA2 will determine a figure that reflects the seriousness of the breach. In many cases, the amount of revenue generated by a firm from a particular product line or business area is indicative of the harm or potential harm that its breach may cause, and in such cases the FCA2 will determine a figure which will be based on a percentage of the firm’s revenue from the relevant products or business areas. The FCA2 also believes that the amount of revenue generated by a firm
(1) The FCA2 may increase or decrease the amount of the financial penalty arrived at after Step 2, but not including any amount to be disgorged as set out in Step 1, to take into account factors which aggravate or mitigate the breach. Any such adjustments will be made by way of a percentage adjustment to the figure determined at Step 2.2(2) The following list of factors may have the effect of aggravating or mitigating the breach:(a) the conduct of the firm in bringing (or failing
(1) If the FCA2 considers the figure arrived at after Step 3 is insufficient to deter the firm who committed the breach, or others, from committing further or similar breaches then the FCA2 may increase the penalty. Circumstances where the FCA2 may do this include:222(a) where the FCA2 considers the absolute value of the penalty too small in relation to the breach to meet its objective of credible deterrence;2(b) where previous FCA2 action in respect of similar breaches has failed
The FCA2 and the firm on whom a penalty is to be imposed may seek to agree the amount of any financial penalty and other terms. In recognition of the benefits of such agreements, DEPP 6.7 provides that the amount of the financial penalty which might otherwise have been payable will be reduced to reflect the stage at which the FCA2 and the firm concerned reached an agreement. The settlement discount does not apply to the disgorgement of any benefit calculated at Step 1.22
The purpose of this section is to require firms to submit their annual report and accounts, and the annual report and accounts of their mixed activity holding companies, to the FCA online through the appropriate systems accessible from the FCA's website. This information is used in the monitoring of firms both individually and collectively.
A firm in the RAG in column (1) and which is a type of firm in column (2) must submit its annual report and accounts to the FCA annually on a single entity basis.
(1) |
(2) |
|
RAG |
Firm type |
|
1 |
||
A non-UK bank5. |
||
2.2 |
The Society |
|
3 |
||
All other firms subject to the following chapters in IPRU(INV): |
||
(1) |
Chapter 3 |
|
(2) |
Chapter 5 |
|
(3) |
[deleted]7 |
|
4 |
||
All other firms subject to the following chapters in IPRU(INV): |
||
(1) |
Chapter 3 |
|
(2) |
Chapter 5 |
|
(3) |
[deleted]7 |
|
(4)6 |
Chapter 12 |
|
5 |
All firms |
|
6 |
All firms other than firms subject to IPRU (INV) Chapter 13 6 3 |
|
7 |
||
8 |
All firms other than firms subject to IPRU (INV) Chapter 13 6 3 |
|
A firm in the RAG group in column (1), which is a type of firm in column (2) and whose ultimate parent is a mixed activity holding company must:
- (1)
submit the annual report and accounts of the mixed activity holding company to the FCA annually; and
- (2)
notify the FCA that it is covered by this reporting requirement by email using the email address specified in SUP 16.3.10 G (3), by its accounting reference date.
(1)
(2)
RAG
Firm type
1
3
4
7
1An administration order can be made only in relation to companies and partnerships and only where the court believes that making such an order will achieve one or more of the four purposes set out in section 8 of the 1986 Act. The FCA will apply for an administration order only where it considers that doing so will meet or is likely to meet one or more of these purposes.
1In addition, the FCA will consider, where relevant, factors including: (1) the extent to which the financial difficulties are, or are likely to be attributable to the management of the company or partnership, or to external factors, for example, market forces; (2) the extent to which it appears to the FCA that the company or partnership may, through an administrator, be able to trade its way out of its financial difficulties; (3) the extent to which the company or partnership
1The FCA will exercise its rights under sections 362, 371 and 374 of the Act to be heard on a third party's petition or in subsequent hearings only where it believes it has information that it considers relevant to the court's consideration of the petition or application. These circumstances may include: (1) where the FCA has relevant information which it believes may not otherwise be drawn to the court's attention; especially where the FCA has been asked to attend for a particular
1The making of an insolvency order operates to stay any proceedings already in place against the company,
partnership or individual, and prevents proceedings being commenced while the insolvency order is in place. Proceedings can continue or be commenced against those persons only with the court's permission. This may impact on the effectiveness of the FCA's use of its powers to seek injunctions and restitution orders from the court. The FCA will draw the court's
1The FCA is given power to receive the same information as creditors are entitled to receive in the winding up, administration, receivership or voluntary arrangement of an authorised person, of appointed representatives and of persons who have carried out a regulated activity while unauthorised. The FCA is also entitled to attend and make representation at any creditors' meeting or (where relevant) creditors' committee meeting taking place in those regimes. When it decides whether
Sections 250 and 261L11 of the Act and regulation 7 of the OEIC Regulations allow the FCA12 to waive the application of certain rules in COLL to:111210(1) a person, as respects a particular AUT, ACS11 or ICVC, on the application or with the consent of that person; and(2) an AUT, ACS11 or ICVC on the application or with the consent of the manager and trustee (in the case of an AUT), the authorised contractual scheme manager and depositary (in the case of an ACS)11 or the ICVC and