Related provisions for SYSC 22.6.5

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SUP 12.5.6GRP
(1) If the appointed representative is appointed to give advice on investments to retail clients7 concerning packaged products, the firm should also satisfy itself that the contract requires compliance with the rules in COBS 6 or COBS 6.1ZA18 (Information about the firm, its services and remuneration).979(2) The contractual requirements in SUP 12.5.5 R should extend to:(a) the activities of the appointed representative, if the appointed representative is an individual; and3(b)
SUP 12.5.10RRP
12A firm must ensure that, if appointing an appointed representative to carry on MCD credit intermediation activity, its written contract requires the appointed representative to provide such evidence to the FCA as to the knowledge and competence of the staff of the appointed representative, as the FCA may require from time to time. [Note: article 9(4) of the MCD]
PERG 2.3.8GRP
5In practice, a person is only likely to fall outside the general prohibition on the grounds that he is not carrying on his own business if he is an employee or performing a role very similar to an employee.
PERG 2.3.9GRP
5Even though working for more than one firm is likely to mean that the person will not be able to rely on the grounds in PERG 2.3.6 G to escape the general prohibition (see PERG 2.3.7G (6)), that will not always be the case. In particular, say that a person is acting as an employee of one firm (Firm A) and as a self-employed agent of another firm (Firm B). In his capacity as an employee of Firm A, the person would not be carrying on his own business. Thus, the general prohibition
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
IPRU-INV 13.1.9RRP
The policy must incorporate terms which are appropriate and must make provision for cover in respect of any claim for loss or damage, for which the firm may be liable as a result of an act or omission by: (1) the firm; or (2) any person acting on behalf of the firm including employees, appointed representatives or its other agents.
IPRU-INV 13.1.17GRP
The cover provided by the policy should be wide enough to include the liability of the firm, its appointed representatives, its tied agents, employees and its agents for breaches under the regulatory systems or civil law. If the firm operates outside the United Kingdom then the policy should cover other regulatory requirements imposed under the laws of other countries in which the firm operates.
SYSC 10A.1.6RRP
A firm must take all reasonable steps to record telephone conversations, and keep a copy of electronic communications, that relate to the activities in financial instruments referred to in SYSC 10A.1.1R(2) (and that are not excluded by SYSC 10A.1.4R), and that are made with, sent from, or received on, equipment:(1) provided by the firm to an employee or contractor; or(2) the use of which by an employee or contractor has been accepted or permitted by the firm.[Note: article 16(7)
SYSC 10A.1.7RRP
A firm must take all reasonable steps to prevent an employee or contractor from making, sending, or receiving relevant telephone conversations and electronic communications on privately-owned equipment which the firm is unable to record or copy.[Note: article 16(7) of MiFID, eighth subparagraph]
DISP 1.10.2ARRP
(1) Twice a year a firm must provide the FCA with a complete report concerning complaints received from eligible complainants about matters relating to activities carried out by its employees when acting as retail investment advisers. The report must be set out in the format in DISP 1 Annex 1C R.104777(2) DISP 1 Annex 1C R requires (for the relevant reporting period) information about:10(a) the total number of complaints received by the firm about matters relating to activities
DISP 1.10.3GRP
For the purposes of DISP 1.10.2R, DISP 1.10.2-AR13, DISP 1.10.2AR, DISP 1.10.2BR and DISP 1.10.2CR,14 when completing the return, the firm should take into account the following matters.10618413(1) If a complaint could fall into more than one category, the complaint should be recorded in the category which the firm considers to form the main part of the complaint.10(2) Under DISP 1.10.2R(1)(b), DISP 1.10.2R(2)(b), DISP 1.10.2-AR, DISP 1.10.2BR(2) or DISP 1.10.2CR(2),14 a firm
SYSC 10.1.3RRP
A firm must take all appropriate9 steps to identify and to prevent or manage9 conflicts of interest between:3(1) the firm, including its managers, employees and appointed representatives (or where applicable, 2tied agents)2, or any person directly or indirectly linked to them by control, and a client of the firm; or2(2) one client of the firm and another client;that arise or may arise in the course of the firm providing any service referred to in SYSC 10.1.1R including those
SYSC 10.1.23RRP
6An AIFM must take all reasonable steps to identify conflicts of interest that arise, in the course of managing AIFs, between:(1) the AIFM, including its managers, employees or any person directly or indirectly linked to the AIFM by control, and an AIF managed by the AIFM or the investors in that AIF; or(2) an AIF or the investors in that AIF, and another AIF or the investors in that AIF; or(3) an AIF or the investors in that AIF, and another client of the AIFM; or(4) an AIF or
SUP 15.3.11RRP
(1) A firm must notify the FCA11 of:3535(a) a significant breach of a rule (which includes a Principle, a Statement of Principle or a COCONrule)20; or2020(aa) a significant breach of any requirement imposed by the CCA or by regulations or an order made under the CCA (except if the breach is an offence, in which case (c) applies), but any notification under (aa) is required to be made only to the FCA; or 14(b) a breach of any requirement imposed by the Act or by regulations
SUP 15.3.17RRP
A firm must notify the FCA11 immediately if one of the following events arises and the event is significant:3535(1) it becomes aware that an employee may have committed a fraud against one of its customers; or(2) it becomes aware that a person, whether or not employed by it, may have committed a fraud against it; or(3) it considers that any person, whether or not employed by it, is acting with intent to commit a fraud against it; or(4) it identifies irregularities in its accounting
SYSC 4.1.1BRRP
14A full-scope UK AIFM must, in particular:(1) have rules for personal transactions by its employees or for the holding or management of investments it invests on its own account;(2) ensure that each transaction involving the AIFs may be reconstructed according to its origin, the parties to it, its nature, and the time and place at which it was effected; and(3) ensure that the assets of the AIFs managed by the AIFM are invested in accordance with the instrument constituting the
SYSC 4.1.1ERRP
19A UK UCITS management company must have appropriate procedures for its employees to report potential or actual breaches of UK provisions which implemented25 the UCITS Directive internally through a specific, independent and autonomous channel.[Note: article 99d(5) of the UCITS Directive]
SYSC 6.1.1RRP
1A firm must establish, implement and maintain adequate policies and procedures sufficient to ensure compliance of the firm including its managers, employees and appointed representatives (or where applicable, tied agents)3 with its obligations under the regulatory system and for countering the risk that the firm might be used to further financial crime.2[Note: article 1616(2) of MiFID and article 12(1)(a) of the UCITS Directive]8242
REC 3.4.3GRP
(1) Members of the management body4 include the persons who, under the operational or managerial arrangements of the UK recognised body, are appointed to manage the departments responsible for carrying out its relevant functions, whether or not they are members of its governing body. A person appointed to carry out specific tasks, such as to conduct a particular investigation into a specific set of facts, would not usually be a member of the management body4.(2) A member of the
SUP 15.7.3GRP
The FCA4 is entitled to rely on any information it receives from a firm and to consider any notification received as being made by a person authorised by the firm to do so. A firm should therefore consider whether it needs to put procedures in place to ensure that only appropriate employees make notifications to the FCA4 on its behalf.7777
SUP 10A.15.4GRP
The obligations to supply information to1 the FCA under either SUP 10A.14.8R or SUP 10A.14.10R1 apply notwithstanding any agreement (for example a 'COT 3' Agreement settled by the Advisory, Conciliation and Arbitration Service (ACAS)) or any other arrangements entered into by a firm or its appointed representative4 and an employee upon termination of the employee's employment. A firm should not (and should ensure that its appointed representatives do not)4 enter into any such
CREDS 10.1.3GRP

Module

Relevance to Credit Unions

The Principles for Businesses (PRIN)

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

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Senior Management Arrangements, Systems and Controls (SYSC)

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

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3Code of Conduct (COCON)

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

Threshold Conditions (COND)

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

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

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

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

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General Provisions (GEN)

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

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Fees manual (FEES)

This manual sets out the fees applying to credit unions.

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

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

Conduct of Business sourcebook (COBS)

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

3Insurance: Conduct of Business sourcebook (ICOBS)

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

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

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

Banking: Conduct of Business sourcebook (BCOBS)

BCOBS sets out rules and guidance for credit unions on how they should conduct their business with their customers. In particular there are rules and guidance relating to communications with banking customers3and financial promotions (BCOBS 2), distance communications (BCOBS 3), information to be communicated to banking customers3(BCOBS 4), post sale requirements (BCOBS 5), and cancellation (BCOBS 6). 3The rules in BCOBS 3.1 that relate to distance contracts may apply 3to a credit union. This is because BCOBS 3 contains requirements which implemented9 the Distance Marketing Directive39where there is "an organised distance sales or service-provision scheme run by the supplier" (Article 2(a)) of the Distance Marketing Directive)9, i.e. if the credit union routinely sells any of its services by post, telephone, fax or the internet3.

Supervision manual (SUP)

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

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

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

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3Consumer Credit sourcebook (CONC)

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

Decision, Procedure and Penalties manual (DEPP)

DEPP is relevant to credit unions because it sets out:

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

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

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Dispute Resolution: Complaints (DISP)

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

Compensation (COMP)

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

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

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

The Enforcement Guide (EG)

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

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

FCG and FCTR provide8guidance on steps that a firm can take to reduce the risk that it might be used to further financial crime.
PERG 8.6.1GRP
The word ‘communicate’ is extended under section 21(13) of the Act and includes causing a communication to be made. This means that a person who causes the communication of a financial promotion by another person is also subject to the restriction in section 21. Article 6(d) of the Financial Promotion Order also states that the word ‘communicate’ has the same meaning when used in exemptions in the Order. Article 6(a) also states that the word ‘communication’ has the same meaning
EG App 2.1.9RP
2The following are indicators of whether action by the FCA or one of the other agencies is more appropriate. They are not listed in any particular order or ranked according to priority. No single feature of the case should be considered in isolation, but rather the whole case should be considered in the round.(a) 2 Tending towards action by the FCAWhere the suspected conduct in question gives rise to concerns regarding market confidence or protection of consumers of services regulated
SUP 10C.16.5GRP
(1) The obligations to supply information to:(a) the FCA under this chapter;(b) [deleted]1apply notwithstanding any:(c) agreement (for example a 'COT 3' Agreement settled by the Advisory, Conciliation and Arbitration Service (ACAS)); or(d) any other arrangements entered into by a firm and an employee upon termination of the employee’s employment.(2) A firm should not enter into any such arrangements or agreements that could conflict with its obligations under this chapter.
DISP 3.3.4RRP
The Ombudsman may dismiss a complaint413referred to the Financial Ombudsman Service before 9 July 2015 413without considering its merits if 413the Ombudsman413considers that:5(1) the complainant has not suffered (or is unlikely to suffer) financial loss, material distress or material inconvenience; or(2) the complaint is frivolous or vexatious; or(3) the complaint clearly does not have any reasonable prospect of success; or(4) the respondent has already made an offer of compensation
COND 2.5.6GRP
Examples of the kind of particular considerations to which the FCA may have regard when assessing whether a firm will satisfy, and continue to satisfy, this threshold condition include, but are not limited to, whether:1515(1) the firm has been open and co-operative in all its dealings with the FCA15and any other regulatory body (see Principle 11 (Relations with regulators)) and is ready, willing and organised to comply with the requirements and standards under the regulatory system
REC 2.16.4GRP
In determining whether a UK recognised body's arrangements for the investigation of complaints include appropriate arrangements for the complaint to be fairly and impartially investigated by an independent person (a "complaints investigator"), the FCA3 may have regard to:3(1) the arrangements made for appointing (and removing) a complaints investigator, including the terms and conditions of such an appointment and the provision for remuneration of a complaints investigator; (2)