Related provisions for PERG 1.2.4
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Business and internal control risks vary from firm to firm, according to the nature and complexity of the business. The FCA's assessment of these risks is reflected in how its rules apply to different categories of firm as well as in the use of its other regulatory tools. One of the tools the FCA has available is to give a firm individual guidance on the application of the requirements or standards under the regulatory system in the firm's particular circumstances.
The FCA6 may give individual guidance to a firm on its own initiative if it considers it appropriate to do so. For example:6(1) the FCA6 may consider that general guidance in the Handbook does not appropriately fit a firm's particular circumstances (which may be permanent or temporary) and therefore decide to give additional individual guidance to the firm;6(2) some of the FCA's6 requirements are expressed in general terms; however, there may be times when the FCA6 will wish to
(1) Regulation 15(8)(f) of the OEIC Regulations (Requirements for authorisation) requires independence between the depositary, the ICVC and the ICVC's directors, as does section 243(4) of the Act (Authorisation orders) for the trustee and manager of an AUT, and section 261D(4) of the Act (Authorisation orders) for the depositary and authorised fund manager of an ACS6. COLL 6.9.3 G to COLL 6.9.5 G give the6FCA's view of the meaning of independence of these relationships. An ICVC,
(1) Regulation 15(9) of the OEIC Regulations, and sections 243(8) and 261D(10)6 of the Act require that an authorised fund's name must not be undesirable or misleading. This section contains guidance on some specific matters the FCA will consider in determining whether the name of an authorised fund is undesirable or misleading. It is in addition to the requirements of regulation 19 of the OEIC Regulations (Prohibition on certain names).6(2) The FCA will take into account whether
The first activity (article 25A(1) and (2A)2) is referred to in this guidance as arranging (bringing about) regulated mortgage contracts. Various points arise:(1) It is not necessary for the potential borrower himself to be involved in making the arrangements.(2) This activity is carried on only if the arrangements bring about, or would bring about a regulated mortgage contract. This is because of the exclusion in article 26 (see PERG 4.5.4 G). As explained in PERG 4.5.4A G, this
In the FCA's view, the crucial element of the exclusion in article 27 is the inclusion of the word "merely". When a publisher, broadcaster or Internet website operator goes beyond what is necessary for him to provide his service of publishing, broadcasting or otherwise facilitating the issue of promotions, he may well bring himself within the scope of article 25A(2). Further detailed guidance relating to the scope of the exclusion in article 27 is contained in PERG 8.32.6 G to
A sponsor, or a 8person48applying for approval as a sponsor, will not satisfy LR 8.6.5R (2) unless it has:4888(1) 8submitted a sponsor declaration to the FCA:(a) for a person applying for approval as a sponsor, within three years of the date of its application; and(b) for a sponsor, within the previous three years; and(2) 8a sufficient number of employees with the skills , knowledge and expertise necessary for it to:(a) provide sponsor services in accordance with LR 8.3; (b)
4For each 8sponsor service requiring the submission of a document to the FCA or contact with the FCA, a sponsor must:8(1) at the time of submission or on first making contact with the FCA8notify the FCAof the name and contact details of a key 8contact within8 the sponsor for that matter8; and8888(2) ensure that its key8contact : 88(a) has8 sufficient knowledge about the listed company or applicant and the proposed matter8to be able to answer queries from the FCA about it; 888(b)
(1) 15This guidance is relevant to an SMCR firm17 required to
appoint a compliance officer under SYSC 6.1.4R or article 22(3) of the MiFID Org Regulation as applicable16.(2) Taking account of the nature, scale and complexity of its activities,
the firm should have appropriate procedures to ensure that the
removal or any other disciplinary sanctioning of the compliance
officer does not undermine the independence of the compliance
function.(3) In the FCA's view, it will be appropriate,
(1) This section applies in relation to dual-regulated firms Remuneration Code staff, except as set out in (3).(2) When establishing and applying the total remuneration policies for dual-regulated firms Remuneration Code staff, a firm must comply with this section in a way2 that is appropriate to its size, internal organisation and the nature, the scope and the complexity of its activities (the dual-regulated firms remuneration principles proportionality rule).(3) Paragraphs (1)
A firm must:(1) set specific criteria for the application of malus and clawback; and(2) ensure that the criteria for the application of malus and clawback in particular cover situations where the employee:(a) participated in, or was responsible for, conduct which resulted in significant losses to the firm; or(b) failed to meet appropriate standards of fitness and propriety.[Note: article 94(1)(n) of the CRD and Standards 6 and 9 of the FSB Compensation Standards][Note: The FSA
A person seeking to make a financial promotion to another person may wish to make enquiries of that person to establish whether he is certified. Unless another exemption applies or the financial promotion is approved by an authorised person, such enquiries will not be possible if the enquiry communication is an inducement or invitation to engage in investment activity. In the FCA's8 view, a communication which is merely an enquiry seeking to establish that a person holds a current
Table: Explanation of the sections of the Act mentioned in SUP 10C.14.22R4
1Section |
Summary of relevant parts |
Other Handbook material |
Comments |
Section 63(2A) (Duty to notify regulator of grounds for withdrawal of approval) |
At least once a year, each firm must, in relation to every SMF manager for whom an approval has been given on the application of that firm: (a) consider whether there are any grounds on which the FCA could withdraw the approval; and (b) if the firm is of the opinion that there are such grounds, notify the FCA of those grounds. |
FIT sets out guidance on the factors a firm should take into account when assessing the fitness and propriety of an approved person. |
|
Section 64C of the Act (Requirement for 4authorised persons to notify regulator of disciplinary action) |
If: (a) a firm takes disciplinary action in relation to an SMF manager; and (b) the reason, or one of the reasons, for taking that action is a reason specified in SUP 15.11.6R; |
SUP 15.11 (Notification of COCON breaches and disciplinary action) |
An example of when a notification should be made using Form C rather than Form D is when a firm is required to notify the FCA under section 64C of the Act that it has dismissed an SMF manager. |
3Publication will generally include placing the decision notice or final notice on the FCA website and this will often be accompanied by a press release. The FCA will also consider what information about the matter should be included on the Financial Services Register. Additional guidance on the FCA's approach to the publication of information on the Financial Services Register in certain specific types of cases is set out at the end of this chapter.
There is a general concern that the practice of companies issuing statements and giving briefings may involve a financial promotion. These arise sometimes as a result of requirements imposed by a listing authority or an exchange or market, PERG 8.4.14 G offers guidance on when such statements or briefings may amount to or involve an inducement to engage in investment activity. It indicates that whilst statements of fact alone will not be inducements, there may be circumstances
The reference to financial promotions which are permitted to be communicated relates, in the FCA's opinion, to something which is expressly permitted rather than simply not expressly prohibited. Article 67 itself does not specify any particular medium for communicating required or permitted material. So, it will be enough for the financial promotion to be part of a document which is itself required or permitted to be communicated (such as reports or financial statements). Market
In the FCA's view, the crucial element of the exclusion in article 27 is the inclusion of the word 'merely'. When a publisher, broadcaster or internet website operator goes beyond what is necessary for him1 to provide its1 service of publishing, broadcasting or otherwise facilitating the issue of promotions, it may well bring itself1 within the scope of article 25(2). Further detailed guidance relating to the scope of the exclusion in article 27 is contained in PERG 2.8.6G (2)
The effect of PERG 5.6.17G (4) is that some persons who, in making introductions, are making arrangements with a view to transactions in investments under article 25(2) of the Regulated Activities Order, cannot use the introducing exclusion. This is usually the case if1 the arrangements for making introductions relate to contracts of insurance (PERG 5.6.19 G has further guidance on when arrangements for introductions may be regarded as relating to contracts of insurance). However,
6CBTL firms are subject to a duty to deal with the FCA in an open and co-operative manner under article 18(1)(d) of the MCD Order. SUP 2.3 applies to CBTL firms in relation to complying with that duty as though:(1) a reference to firm included a reference to a CBTL firm;(2) a reference to the regulatory system were a reference to the provisions of the MCD Order, rules, directions and guidance applicable to CBTL firms;(3) a reference to Principle 11 were a reference to the duty
The purpose of SUP 2.3 is to amplify Principle 11 in the context of information gathering by the FCA on its own initiative in the discharge of its functions under the Act. SUP 2.3 therefore sets out, in guidance on Principle 11 and in rules, how the FCA expects firms to deal with the FCA in that context, including the steps that a firm should take with a view to ensuring that certain connected persons should also cooperate with the FCA.
Rights conferred on third parties (such as a firm'sclients) cannot be affected by guidance given by the FCA. Guidance on rules, the Act or other legislation represents the FCA view, and does not bind the courts, for example in relation to an action for damages brought by a private person for breach of a rule (section 138D of the Act (Actions for damages)) or in relation to enforceability of a contract if the general prohibition is breached (sections 26 and 27 of the Act (Enforceability