Related provisions for LR 10.1.5
241 - 260 of 1029 items.
(1) An insurer with a permission to effect or carry out life policies must submit to the FCA a persistency report in respect of life policies by 30 April each year in accordance with this section.11111118(2) A firm with permission to establish, operate or wind up a stakeholder pension scheme must submit to the FCA11:11(a) a data report on stakeholder pensions by 30 April each year using the form specified in SUP 16 Annex 6R.99(b) [deleted]99
(1) 9A firm may submit persistency and a data report for a 12 month period ending within 4 months of its accounting reference date if:(a) it has notified the FCA of this intention by email using the email address specified in SUP 16.3.10 G (3) no later than the firm'saccounting reference date; and(b) it either:(i) has an accounting reference date other than 31 December; or(ii) undertakes industrial assurance policy business.
1In this section, and in SUP 16 Annex 6R:9(1) '12 month report' means the part of a persistency report or data report reporting on life policies or stakeholder pensions effected in Y-2, '24 month report' means the part of a persistency report or data report reporting on life policies or stakeholder pensions effected in Y-3, and so on;(2) 'CC' means the number of life policies or stakeholder pensions which: (a) were effected during the period to which the calculation relates; and(b)
The following is a non-exhaustive list of examples of conduct that would be in breach of rule SC2.(1) Failing to take reasonable steps to implement (either personally or through a compliance department or other departments) adequate and appropriate systems of control to comply with the relevant requirements and standards of the regulatory system for the activities of the firm.(2) Failing to take reasonable steps to monitor (either personally or through a compliance department
The FCA recognises that a senior conduct rules staff member will have to exercise their own judgement in deciding how issues are dealt with and sometimes that judgement will, with the benefit of hindsight, be shown to have been wrong. The senior conduct rules staff member will not be in breach of rule SC3 in COCON 2.2.3R unless they fail to exercise due and reasonable consideration before they delegate the resolution of an issue or authority for dealing with a part of the business
Senior conduct rules staff members will not always manage the business on a day-to-day basis themselves. The extent to which they do so will depend on a number of factors, including the nature, scale and complexity of the business and their position within it. The larger and more complex the business, the greater the need for clear and effective delegation and reporting lines, which may involve documenting the scope of that delegation and the reporting lines in writing. The FCA
In determining whether or not the conduct of a senior conduct rules staff member complies with rule SC3 in COCON 2.2.3R, the factors which the FCA would expect to take into account include:(1) the competence, knowledge or seniority of the delegate; and (2) the past performance and record of the delegate.
For the purpose of rule SC4 in COCON 2.2.4R, regulators in addition to the FCA and the PRA are those which have recognised jurisdiction in relation to activities to which COCON applies and have a power to call for information from the relevant person in connection with their function or the business for which they are responsible. This may include an exchange or an overseas regulator.
(1) If a senior conduct rules staff member comes across a piece of information that is something of3 which they think the FCA or PRA could reasonably expect notice, they should determine whether that information falls within the scope of their responsibilities.5 For an SMF manager those responsibilities will be set out in that person’sstatement of responsibilities.52(2) If it does, then they should ensure that, if it is otherwise appropriate to do so, it is disclosed to the appropriate
In determining whether or not a person's conduct complies with rule SC4 in COCON 2.2.4R, the factors which the FCA would expect to take into account include:(1) whether it would be reasonable for the individual to assume that the information would be of material significance to the regulator concerned; (2) whether the information related to the individual themselves or to their firm; and(3) whether any decision not to report the matter was taken after reasonable enquiry and analysis
1The FCA will not normally make public the fact that it is or is not investigating a particular matter, or any of the findings or conclusions of an investigation except as described in other sections of this chapter. The following paragraphs deal with the exceptional circumstances in which the FCA may make a public announcement that it is or is not investigating a particular matter.
1Where the matter in question has occurred in the context of a takeover bid, and the following circumstances apply, the FCA may make a public announcement that it is not investigating, and does not propose to investigate, the matter. Those circumstances are where the FCA:(1) has not appointed, and does not propose to appoint, investigators; and (2) considers (following discussion with the Takeover Panel) that such an announcement is appropriate in the interests of preventing or
1Where it is investigating any matter, the FCA will, in exceptional circumstances, make a public announcement that it is doing so if it considers such an announcement is desirable to: (1) maintain public confidence in the financial system or the market; or (2) protect consumers or investors; or (3) prevent widespread malpractice; or (4) help the investigation itself, for example by bringing forward witnesses; or (5) maintain the smooth operation of the market. In deciding whether
1The exceptional circumstances referred to above may arise where the matters under investigation have become the subject of public concern, speculation or rumour. In this case it may be desirable for the FCA to make public the fact of its investigation in order to allay concern, or contain the speculation or rumour. Where the matter in question relates to a takeover bid, the FCA will discuss any announcement beforehand with the Takeover Panel. Any announcement will be subject
1The FCA will not normally publish details of the information found or conclusions reached during its investigations. In many cases, statutory restrictions on the disclosure of information obtained by the FCA in the course of exercising its functions are likely to prevent publication (see section 348 of the Act). In exceptional circumstances, and where it is not prevented from doing so, the FCA may publish details. Circumstances in which it may do so include those where the fact
Schedule to the Recognition Requirements Regulations, Paragraph 2
2(1) The [UK RIE] must be a fit and properpersonto perform the [ relevant functions ] of a [ UK RIE ]. |
(2) In considering whether this requirement is satisfied, the [FCA]4 may (without prejudice to the generality of regulation 6(1)) take into account all the circumstances, including the [UK RIE's] connection with any person. 4 |
2(3) The members of the management body5 must be of sufficiently good repute and possess sufficient knowledge, skill and experience to perform their duties5. |
2(4) The persons who are in a position to exercise significant influence over the management of the [UK RIE], whether directly or indirectly must be suitable. |
In determining whether a UK recognised body is a fit and proper person, the FCA4 may have regard to any relevant factor including, but not limited to:4(1) the commitment shown by the UK recognised body'smanagement body5 to satisfying the recognition requirements and to complying with other obligations in or under the Act;(2) its arrangements, policies and resources for fulfilling its obligations under the Act in relation to its activities as a UK recognised body;(3) the extent
In determining whether a UK recognised body is a fit and proper person, the FCA4 may have regard to its connections with:4(1) any undertaking in the same group;(2) any owner or part-owner of the UK recognised body;(3) any person who has the right to appoint or remove members of the management body5;(4) any person who is able in practice to appoint or remove members of the management body5;(5) any person in accordance with whose instructions the management body5 is accustomed to
In assessing whether its connection with any person could affect whether a UK recognised body is a fit and proper person, the FCA4 may have regard to:4(1) the reputation and standing of that other person, including his standing with any relevant UK or overseas regulator;(2) breaches of any law or regulation by that other person; (3) the roles of any of the UK recognised body's key individuals who have a position within organisations under the control or influence of that other
2In assessing whether the persons who effectively direct the business and operations of the UK RIE are of sufficiently good repute and sufficiently experienced to ensure the sound and prudent management and operation of the financial markets operated by 3it, the FCA4 may have regard to the repute and experience of the UK RIE'skey individuals.4
If a decision maker is asked to decide whether to give a decision notice or second supervisory notice, it will:(1) review the material before it;(2) consider any representations made (whether written, oral or both) and any comments by FCA1 staff or others in respect of those representations;1(3) decide whether to give the notice and the terms of any notice given.
If the FCA1 receives no response or representations within the period specified in a warning notice, the decision maker may regard as undisputed the allegations or matters in that notice and a decision notice will be given accordingly. A person who has received a decision notice and has not previously made any response or representations to the FCA1, may nevertheless refer the FCA's1 decision to the Tribunal.111
If the FCA1 receives no response or representations within the period specified in a first supervisory notice, the FCA1 will not give a second supervisory notice. The outcome depends on when the relevant action took or takes effect (as stated in the notice). If the action:11(1) took effect immediately, or on a specified date which has already passed, it continues to have effect (subject to any decision on a referral to the Tribunal); or(2) was to take effect on a specified date
Under section 388(3) of the Act, following the giving of a decision notice but before the FCA1 takes action to which the decision notice relates, the FCA1 may give the person concerned a further decision notice relating to different action concerning the same matter. Under section 388(4) of the Act, the FCA1 can only do this if the person receiving the further decision notice gives its consent. In these circumstances the following procedure will apply:111(1) FCA1staff will recommend
1The FCA's effective and proportionate use of its enforcement powers plays an important role in the pursuit of its statutory objectives, including its operational objectives of securing an appropriate degree of protection for consumers, protecting and enhancing the integrity of the UK financial system, and promoting effective competition in the interests of consumers. For example, using enforcement helps to contribute to the protection of consumers and to deter future contraventions
1There are a number of principles underlying the FCA's approach to the exercise of its enforcement powers: (1) The effectiveness of the regulatory regime depends to a significant extent on maintaining an open and co-operative relationship between the FCA and those it regulates.(2) The FCA 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.(3) The FCA will seek to
1Enforcement is only one of a number of regulatory tools available to the FCA. As a risk based regulator with limited resources, throughout its work the FCA prioritises its resources in the areas which pose the biggest threat to its statutory objectives. This applies as much to the enforcement tool as it does to any other tool available to it. The next section of this chapter summarises how in practice the FCA takes a risk based approach towards its use of the enforcement tool,
1Where a firm or other person has failed to comply with the requirements of the Act, the rules, or other relevant legislation, it may be appropriate to deal with this without the need for formal disciplinary or other enforcement action. The proactive supervision and monitoring of firms, and an open and cooperative relationship between firms and their supervisors, will, in some cases where a contravention has taken place, lead the FCA to decide against taking formal disciplinary
1The AIFM Remuneration Code (SYSC 19B) also applies to a BIPRU firm which is a full-scope UK AIFM (ie, a full-scope UK AIFM that is an AIFM investment firm subject to BIPRU). Such a full-scope UK AIFM that complies with SYSC 19B will also comply with SYSC 19C. In such cases, the FCA will not require the full-scope UK AIFM to demonstrate compliance with SYSC 19C.
(1) 2The UCITS Remuneration Code (SYSC 19E) also applies to a BIPRU firm that is a UK UCITS management company (that is, a UK UCITS management company that is a UCITS investment firm subject to BIPRU).(2) A BIPRU firm that is a UK UCITS management company will meet its obligations under SYSC 19C and SYSC 19E by complying with SYSC 19E. (3) Under (1) and (2), the FCA will not require the UK UCITS management company to demonstrate compliance with SYSC 19C.
(1) The BIPRU Remuneration Code does not contain specific notification requirements. However, general circumstances in which the FCA expects to be notified by firms of matters relating to their compliance with requirements under the regulatory system are set out in SUP 15.3 (General notification requirements). (2) In particular, in relation to remuneration matters, such circumstances should take into account unregulated activities as well as regulated activities and the activities
The FCA's policy on individual guidance is set out in SUP 9. Firms should particularly note the policy on what the FCA considers to be a reasonable request for guidance (see SUP 9.2.5 G). For example, where a firm is seeking guidance on a proposed remuneration structure, the FCA will expect the firm to provide a detailed analysis of how the structure complies with the BIPRU Remuneration Code, including the general requirement for remuneration policies, procedures and practices
17The fees for funds8 reflect the estimated costs to the FCA of assessing applications and notifications. The level of fees payable in respect of an application or a notification will vary depending upon the provision of the Act under which it is made. This fee is adjusted when the scheme concerned is an umbrella.8
A potential applicant for Part 4A permission1715has the opportunity to discuss its proposed application 15with the 9FCA before submitting it formally.2 If an applicant for Part 4A permission1715does so, the 9FCA will be able to use that dialogue to make an initial assessment of the fee categorisation and therefore indicate the authorisation fee that should be paid. 171717922171717179
Application fees for applications for and variations of Part 4A permission in respect of credit-related regulated activities are also set out in FEES 3 Annex 1AR and FEES 3 Annex 16R16. 9979[Note: PRA-authorised persons may also pay regulatory transaction fees to the PRA set out in Chapter 4 of the Fees Part of the PRA Rulebook.]
1The guidance in COND 2.7 should be read as applying to both paragraph 2F of Schedule 6 to 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 3E of Schedule 6 of the Act.
1The FCA's assessment of a firm's satisfaction of the3threshold conditions set out in paragraphs 2F and 3E of Schedule 6 to the Act will not necessarily be limited to a firm'sregulated activities if the FCA believes the firm's other business activities, if any, may impact on a firm'sregulated activities.
If either the firm or the appointed representative notifies the other that it proposes to terminate the contract of appointment or to amend it so that it no longer meets the requirements contained or referred to in SUP 12.5 (Contracts: required terms), the firm must:2(1) complete and submit to the FCA the form in SUP 12 Annex 5 R (Appointed representative termination form) in accordance with the instructions on the form and no more than ten business days after the date of the
(1) 4Subject to (2A), a5firm other than a credit union must submit any notification under SUP 12.8.1 R (1) in the form set out in SUP 12 Annex 5 R, online at www.fca.org.uk5 using the FCA'sonline notification and application system8.5566(2) A credit union must submit any notification under SUP 12.8.1 R (1) in the form set out in SUP 12 Annex 5 R and in the way set out in SUP 15.7.4 R to SUP 15.7.9 G (Form and method of notification).(2A) A firm must submit any notification under
4If the FCA's information technology systems fail and online submission is unavailable for 24 hours or more, the FCA will endeavour to publish a notice on its website confirming that online submission is unavailable and that the alternative methods of submission set out in SUP 12.8.1AR(3) and SUP 15.7.4 R to SUP 15.7.9 G (Form and method of notification) should be used.
In assessing whether to terminate a relationship with an appointed representative, a firm should have regard to the guidance in SUP 12.6.1-AG and 11be aware that the notification rules in SUP 15 require notification to be made immediately to the FCA if certain events occur. Examples include a matter having a serious regulatory impact or involving an offence or a breach of any requirement imposed by the Act or by regulations or orders made under the Act by the Treasury.
In the FCA view, this means that the reasonable investor must be satisfied that what he will get when he realises his investment is his proportionate share in the value of BC's underlying assets, less any dealing costs. In other words, that he is satisfied he will get net asset value. The investment condition focuses on the way the body corporate operates over time, and not by reference to particular issues of shares or securities (see PERG 9.6.3 G (The investment condition (section
For the 'satisfaction test' to be met, there must be objectively justifiable grounds on which the reasonable investor could form a view. He must be satisfied that the value of BC's property will be the basis of a calculation used for the whole, or substantially the whole, of his investment. The FCA considers that the circumstances, or combination of circumstances, in which a reasonable investor would be in a position to form this view include:(1) where the basis of net asset valuation
PERG 9.9.3 G (2)and PERG 9.9.3 G (3) refer to circumstances where the reasonable investor may be satisfied that he can realise his investment at net asset value because of arrangements made to ensure that the shares or securities trade at net asset value on a market. There may, for example, be cases of market dealing where the price of shares or securities will not depend on the market. An example is where BC or a third party undertakes to ensure that the market value reflects
However, where there is a market, the FCA does not consider that the test in section 236(3)(b) would be met if the price the investor receives for his investment is wholly dependent on the market rather than specifically on net asset value. In the FCA's view, typical market pricing mechanisms introduce too many uncertainties to be able to form a basis for calculating the value of an investment (linked to net asset value) of the kind contemplated by the satisfaction test. As a
The fact that the definition must be applied to BC as a whole (see PERG 9.6.3 G (The investment condition (section 236(3) of the Act): general)) is also relevant here. So, for example, in a take-over situation the fact that a bidder may be willing to provide an exit route for an investment at net asset value will be irrelevant within the context of the definition. This is so even if an investor invests in particular shares or securities in the knowledge or expectation or in anticipation
1The OEIC Regulations set out requirements relating to the way in which collective investment may be carried on by open-ended investment companies. Under the OEIC Regulations, the FCA has the power, amongst other things, to: revoke an open-ended investment company’s authorisation in several situations, including where the firm breaches relevant requirements or provides us with false or misleading information (regulation 23);give, vary and revoke certain directions, including that
1Factors that the FCA may take into account when it decides whether to use one or more of these powers include, but are not limited to, factors which are broadly similar to those in EG 14.1.1 in the context of AUTs or ACSs. However, the relevant conduct will be that of the ICVC, the director or directors of the ICVC and its depositary. Another difference is that the FCA is also able to take disciplinary action against the ICVC itself since the ICVC will be an authorised person.
1The FCA will give a company a warning notice if it proposes to revoke the company’s authorisation and a decision notice if the decision to revoke the company’s authorisation is subsequently taken. The decisions to give a warning notice or a decision notice will be taken under executive procedures2. A person who receives a decision notice under the OEIC Regulations may refer the matter to the Tribunal.
5A firm must:(1) appoint an individual as MLRO, with responsibility for oversight of its compliance with the FCA'srules on systems and controls against money laundering; and(2) ensure that its MLRO has a level of authority and independence within the firm and access to resources and information sufficient to enable him to carry out that responsibility.
(1) Depending on the nature, scale and complexity of its business, it may be appropriate for a firm to have a separate risk assessment function responsible for assessing the risks that the firm faces and advising the governing body and senior managers on them.(2) The organisation and responsibilities of a risk assessment function should be documented. The function should be adequately resourced and staffed by an appropriate number of competent staff who are sufficiently independent
9(1) Depending on the nature, scale and complexity of its business, it may be appropriate for a firm to delegate much of the task of monitoring the appropriateness and effectiveness of its systems and controls to an internal audit function. An internal audit function should have clear responsibilities and reporting lines to an audit committee or appropriate senior manager, be adequately resourced and staffed by competent individuals, be independent of the day-to-day activities
A firm, other than a Solvency II firm,15 should have in place appropriate arrangements, having regard to the nature, scale and complexity of its business, to ensure that it can continue to function and meet its regulatory obligations in the event of unforeseen interruption. These arrangements should be regularly updated and tested to ensure their effectiveness. Solvency II firms are subject to the business continuity requirements in PRA Rulebook: Solvency II firms: Conditions
The Principles are a general statement of the fundamental obligations of firms and the other persons to whom they apply14 under the regulatory system. 13 They derive their authority from the FCA’s11 rule-making powers as set out in the Act, including as applied by the Payment Services Regulations and the Electronic Money Regulations,14 and reflect the statutory objectives.35
Principles 3 (Management and control), 4 (Financial prudence) and (in so far as it relates to disclosing to the FCA11 ) 11 (Relations with regulators) take into account the activities of members of a firm's group. Compliance by another person to whom the Principles apply with Principles 3, 4 and 11 can also be affected by the activities of other persons who are members of their group.14 This does not mean that, for example, inadequacy of a group member's risk management systems
As set out in PRIN 3.3 (Where?), Principles 1 (Integrity), 2 (Skill, care and diligence) and 3 (Management and control) apply to world-wide activities in a prudential context. Principle 5 (Market conduct) applies to world-wide activities which might have a negative effect on confidence in the UK financial system8. In considering whether to take regulatory action under these Principles in relation to activities carried on outside the United Kingdom, the FCA11 will take into account
Breaching a Principle makes a firm or other person to whom the Principles apply14 liable to disciplinary sanctions. In determining whether a Principle has been breached it is necessary to look to the standard of conduct required by the Principle in question. Under each of the Principles the onus will be on the FCA11 to show that a firm or other person14 has been at fault in some way. What constitutes "fault" varies between different Principles. Under Principle 1 (Integrity),
The Principles are also relevant to the FCA's15 powers of information-gathering, to vary a firm'sPart 4A permission or authorisation or registration under the Payment Services Regulations or Electronic Money Regulations14, and of investigation and intervention, and provide a basis on which the FCA15 may apply to a court for an injunction or restitution order or require a firm or other person14 to make restitution. However, the Principles do not give rise to actions for damages
Persons subject to enforcement action may be prepared to agree the amount of any financial penalty, or the length of any period of suspension, restriction, condition,5 limitation or disciplinary prohibition5 (see DEPP 6A)4, and other conditions which the FCA seeks to impose by way of such action. These4 conditions might include, for example, the amount or mechanism for the payment of compensation to consumers. The FCA recognises the benefits of such agreements, as4 they offer
In appropriate cases the FCA's3 approach will be to negotiate with the person concerned to agree in principle the amount of a financial penalty having regard to the FCA's3statement of policy as set out in DEPP 6.5 to DEPP 6.5D and DEPP 6.6.1 (This starting figure will take no account of the existence of the settlement discount scheme described in this section.) Such amount ("A") will then be reduced by a percentage of A according to the scheme set out in DEPP 6.7.3G to DEPP 6.7.3CG6.
- (1)
Subject to DEPP 6.7.3G(4) a settlement discount is available only in cases where a settlement agreement (which may be a focused resolution agreement) is reached during the period from commencement of an investigation until the FCA has:6
33 - (2)
The communication of the FCA's3 assessment of the appropriate penalty for the purposes of DEPP 6.7.3G(1)(b)6 need not be in a prescribed form but will include an indication of the breaches alleged by the FCA3. It may include the provision of a draft warning notice.
33 - (3)
Subject to DEPP 6.7.3.G(4), in relation to any settlement agreement other than a focused resolution agreement the reduction in penalty will be as follows:6
- (4)
Where stage 1 has been started but no settlement agreement has been agreed before 1 March 2017:6
- (a)
if any agreement is reached to settle the case between the period from the end of stage 1 until the expiry of the period for making representations, or, if sooner, the date on which the representations are sent in response to the giving of a warning notice, there will be a reduction of 20% in the penalty; and6
- (b)
if any agreement is reached to settle the case between the expiry of the period of making representations, or, if sooner, the date on which representations are sent in response to the giving of a warning notice and the giving of a decision notice, there will be a reduction of 10% in the penalty.6
- (a)
(1) Any settlement agreement6 between the FCA3 and the person concerned will therefore need to include a statement as to the appropriate penalty discount in accordance with this procedure.3(2) In certain circumstances the person concerned may consider that it would have been possible to reach a settlement at an earlier stage in the action, and argue that it should be entitled to a greater percentage reduction in penalty than is suggested by the table at DEPP 6.7.3G (3). It may
2The settlement discount scheme which applies to the amount of a financial penalty, described in DEPP 6.7.2 G to DEPP 6.7.5 G, also applies to the length of the period of a suspension, restriction,5 condition or disciplinary prohibition (other than a permanent disciplinary prohibition)5, having regard to the FCA's3 statement of policy as set out in DEPP 6A.3. No settlement discount is available with respect to a permanent disciplinary prohibition.5 The settlement discount scheme
Firm details are13 used by the FCA10 :2020(1) to ensure that a firm is presented with the correct regulatory return when it seeks to report electronically;(2) in order to communicate with a firm;(3) as the basis for some sections of the Financial Services Register;20 and 20(4) in order to carry out thematic analysis across sectors and groups of firms.
(1) Within 6016business days of its accounting reference date, a firm must check the accuracy of its firm details13 through the relevant section of the FCA10 website.2020(2) [paragraph suspended by FSA 2004/79]5(3) If any firm details are13 incorrect, the firm must submit5 the corrected firm details13 to the FCA10 using:19520(a) the appropriate form set out in SUP 15 Ann 3 and in accordance with SUP 16.10.4AR; or19(b) 19where the relevant details relate to an appointed representative
(1) A firm must submit any corrected firm details under SUP 16.10.4R(3) using the appropriate online systems accessible through the FCA’s website.1688138202020779(2) [deleted]1681312202020(3) Where a firm is obliged to submit corrected firm details13 online under (1), if the FCA's20 information technology systems fail and online submission is unavailable for 24 hours or more, until such time as facilities for online submission are restored, a firm must submit its corrected firm
5If the FCA's20 information technology systems fail and online submission is unavailable for 24 hours or more, the FCA20 will endeavour to publish a notice on its website confirming that online submission is unavailable and that the alternative methods of submission set out in SUP 16.3.9 R20 should be used.202020
The firm details are made available to the firm when the firm logs into the appropriate section of the FCA’s website. The firm should check the firm details and send any corrections to the FCA.15 The FCA’s preferred method of receiving corrections to firm details is by the online forms available at the FCA’s website.1310202013102020102020131020202
1Guidance is not binding on those to whom the FCA'srules apply. Nor are the variety of materials (such as case studies showing good or bad practice, FCA speeches, and generic letters written by the FCA to Chief Executives in particular sectors) published to support the rules and guidance in the Handbook. Rather, such materials are intended to illustrate ways (but not the only ways) in which a person can comply with the relevant rules.
1DEPP 6.2.1G(4) explains that the FCA will not take action against someone where we consider that they have acted in accordance with what we have said. However, guidance does not set out the minimum standard of conduct needed to comply with a rule, nor is there any presumption that departing from guidance indicates a breach of a rule. If a firm has complied with the Principles and other rules, then it does not matter whether it has also complied with other material the FCA has
1Guidance and supporting materials are, however, potentially relevant to an enforcement case and a decision maker may take them into account in considering the matter. Examples of the ways in which the FCA may seek to use guidance and supporting materials in an enforcement context include: (1) To help assess whether it could reasonably have been understood or predicted at the time that the conduct in question fell below the standards required by the Principles.(2) To explain the
4A firm should have regard to the urgency and significance of a matter and, if appropriate, should also notify its usual supervisory contact at the FCA by telephone or by other prompt means of communication, before submitting a written application. Oral notifications should be given directly to the firm’s usual supervisory contact at the FCA. An oral notification left with another person or on a voicemail or other automatic messaging service is unlikely to have been given appropriately.
(1) 3(a) An authorised fund manager of a UCITS scheme 6 must use a risk management process enabling it to monitor and measure at any time the risk of the scheme's positions and their contribution to the overall risk profile of the scheme.3(b) In particular, an authorised fund manager of a UCITS scheme 6 must not solely or mechanistically rely on credit ratings issued by credit rating agencies, as defined in article 3(1)(b) of Regulation (EC) No 1060/2009 of the European Parliament
5An authorised fund manager 6 subject to COLL 6.12.3R(2) must notify the FCA of the information specified in points (a) and (b) of that rule:(1) annually, within 30 business days of 31 October, with information that is accurate as of 31 October of that year;(2) using the form in COLL 6 Annex 2R; and(3) by submitting it:(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.
(1) 5In addition, an authorised fund manager 6 subject to COLL 6.12.3R(2) should submit a notification to the FCA if there has been a significant change to the fund’s risk profile since its last report, by sending the form in COLL 6 Annex 2R, completed as applicable, to fundsupervision@fca.org.uk.(2) A significant change to the fund’s risk profile could include, but is not limited to:(a) the first use of derivatives for investment purposes, if derivatives have previously been
(1) An authorised fund manager of a UCITS scheme 6 must assess, monitor and periodically review:(a) the adequacy and effectiveness of the risk management policy and of the arrangements, processes and techniques referred to in COLL 6.12.5 R;(b) the level of compliance by the authorised fund manager 6 with the risk management policy and with those arrangements, processes and techniques referred to in COLL 6.12.5 R; and(c) the adequacy and effectiveness of measures taken to address
Authorised fund managers6 are advised that when they applied for authorisation from the FCA under the Act, their ability to comply with the requirements in COLL 6.12.7 R would have been assessed by the FCA as an aspect of their fitness and properness in determining whether the threshold conditions set out in Schedule 6 (Threshold conditions) of the Act were met. Firms are further advised that their compliance with these requirements is subject to review by the FCA on an ongoing
(1) The winding up of an ICVC may be carried out under this section instead of by the court provided the ICVC is solvent and the steps required under regulation 21 the OEIC Regulations (The Authority's approval for certain changes in respect of a company) are fulfilled. This section lays down the procedures to be followed and the obligations of the ACD and any other directors of the ICVC. (2) The termination of a sub-fund may be carried out4 under this section, instead of by the
This table belongs to COLL 7.3.1 G (4) (Explanation of COLL 7.3)3
3Summary of the main steps in winding up a solvent ICVC or terminating a sub-fund3 under FCArules, assuming FCA approval. Notes: N = Notice to be given to the FCA under regulation 21 of OEIC Regulations E = commencement of winding up or termination W/U = winding up FAP = final accounting period (COLL 7.3.8 R(4)) |
|||
Step number |
Explanation |
When |
COLL rule (unless stated otherwise) |
1 |
Commence preparation of solvency statement |
N-28 days |
7.3.5 (2) |
2 |
Send audited solvency statement to the FCA with copy to depositary |
By N + 21 days |
7.3.5 (4) and (5) |
3 |
Receive the FCA approval |
N + one month |
Regulation 21 of OEIC Regulations |
4 |
Normal business ceases; notify unitholders3 3 |
E |
7.3.6 |
5 |
Realise proceeds, wind up, instruct depositary accordingly |
ASAP after E |
7.3.7 |
6 |
Prepare final account or termination account & have account audited |
On completion of W/U or termination |
7.3.8 |
7 |
Send final account or termination account and auditor's report to the FCA & unitholders |
3 | 7.3.8(6) |
8 |
Request FCA to revoke relevant authorisation order or update its records4 |
On completion of W/U or termination4 |
7.3.7(9) |
(1) An ICVC must not be wound up except:44(a) under this section; or4(b) as an unregistered company under Part V of the Insolvency Act 1986.4(1A) 4A sub-fund must not:(a) be terminated except under this section; or(b) wound up except under Part V of the Insolvency Act 1986 (as modified by regulation 33C of the OEIC Regulations) as an unregistered company.(2) An ICVC must not be wound up or a sub-fund terminated4 under this section if there is a vacancy in the position of ACD.
(1) Before notice is given to the FCA under regulation 21 of the OEIC Regulations of the proposals referred to in COLL 7.3.4 R (3), the directors must make a full enquiry into the ICVC's or, in the case of termination of a sub-fund, the sub-fund's4 affairs, business and property4 to determine whether the ICVC or the sub-fund4 will be able to meet all its liabilities. (2) The ACD must then, based on the results of this enquiry, prepare a statement either: (a) confirming that the
(1) [deleted]44(2) The ACD must, as soon as practicable after winding up or termination has commenced, cause the scheme property to be realised and the liabilities of the ICVC or the sub-fund to be met out of the proceeds.(3) The ACD must instruct the depositary how such proceeds (until utilised to meet liabilities or make distributions to unitholders) must be held and those instructions must be prepared with a view to the prudent protection of creditors and unitholders against
(1) Once the ICVC's affairs are wound up or termination of the sub-fund has been completed (including distribution or provision for distribution in accordance with COLL 7.3.7 R (5)),3 the ACD must prepare an account of the winding up or termination showing: 3(a) how it has been conducted; and(b) how the scheme property has been disposed of. (2) The account in (1) must be, if there is: (a) more than one director, approved by the board of directors and be signed on their behalf
(1) If: (a) during the course, or as a result, of the enquiry referred to in COLL 7.3.5 R (1) (Solvency statement), the directors become of the opinion that it will not be possible to provide the confirmation referred to in (2)(a) of that rule; or(b) after winding up or termination has commenced, the ACD becomes of the opinion that the ICVC or the sub-fund4 will be unable to meet all its liabilities within twelve months of the date of the statement provided under (a) of COLL 7.3.5