Related provisions for GEN 1.1.2

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COLL 3.3.10GRP
(1) In accordance with section 235(4) of the Act (Collective investment schemes), the participants in a scheme which is an umbrella are entitled to exchange rights in one sub-fund for rights in another sub-fund of the umbrella.(2) To satisfy (1), where any sub-fund in a scheme which is an umbrella has provisions in its prospectus limiting the issue of units in that sub-fund, the authorised fund manager should ensure that at least two sub-funds are able to issue units at any time.
PERG 8.13.4GRP
Intermediaries involved with arranging and advising on deposits may be unauthorised persons as such activities do not amount to regulated activities (other than where they involve giving basic advice on a stakeholder product (article 52A of the Regulated Activities Order (Giving basic advice on a stakeholder product))) and so do not require authorisation under section 19 of the Act. However, the combination of the exemptions in Part V together with certain of the exemptions in
PERG 8.36.1GRP
This flowchart sets out the matters which a person will need to consider to see if the restriction in section 21 of the Act applies to his communications. It is referred to in PERG 8.2.5 G.6
BIPRU 8.5.12GRP
If a firm wishes to exclude an undertaking on the basis of any of the grounds set out in BIPRU 8.5.11 G it should apply to the appropriate regulator for a waiver. The appropriate regulator will consider such applications in the light of the criteria in Section 138A of the Act.
SYSC 4.3A.2AGRP
4A firm may apply to the FCA under section 138A of the Act to waive SYSC 4.3A.2R.
PERG 6.7.6GRP
An important part of the conclusion in PERG 6.7.5 G was that, although the provider assumed a risk at the outset of the contract, looking at the contract as a whole and interpreting the common law in the context of the FCA objectives (see PERG 6.5.2 G and PERG 6.5.3 G) there was no relevant assumption of risk.(1) The presence or absence of an assumption of risk is an important part of the statutory rationale for the prudential regulation of insurance.(2) In Medical Defence Union
MAR 5.3A.9RRP
A firm which permits direct electronic access to an MTF it operates must:(1) not permit members or participants of the MTF to provide such services unless they are: (a) MiFID investment firms3; or (b) CRD credit institutions; or(c) third country firms providing the direct electronic access in the course of exercising rights under article 46.1 of MiFIR; or(d) third country firms providing the direct electronic access in the course of exercising rights under article 47.3 of MiFIR;
SYSC 3.2.14GRP
(1) SYSC 3.2.13 G includes assessing an individual's honesty, and competence. This assessment should normally be made at the point of recruitment. An individual's honesty need not normally be revisited unless something happens to make a fresh look appropriate.(2) Any assessment of an individual's suitability should take into account the level of responsibility that the individual will assume within the firm. The nature of this assessment will generally differ depending upon whether
DISP 2.1.7DRP
417Part XVI of the Act (The Ombudsman Scheme), particularly section 226 (Compulsory jurisdiction),5 applies to members of theSociety of Lloyd's5 in respect of the regulated activities of effecting or carrying out contracts of insurance written at Lloyd's.55
PRIN 1.1.2GRP
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
DEPP 6.7.6GRP
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
PERG 8.29.7GRP

1Typical recommendations and whether they will be regulated as advising on investments (except P2P agreements)3 under article 53(1)3 of the Regulated Activities Order. This table belongs to PERG 8.29.1 G to PERG 8.29.6 G.2

Recommendation

Regulated under article 53(1)3 or not?

I recommend that you take out the ABC investment.

Yes. This is advice which steers the client in the direction of a particular investment which the client could buy.

I recommend that you do not take out the ABC investment.

Yes. This is advice which steers the client away from a particular investment which the client could have bought.

I recommend that you take out either the ABC investment or the DEF investment.

Yes. This is advice which steers the client in the direction of more than one particular investment which the client could buy.

I recommend that you sell your ABC investment.

Yes. This is advice which steers the client in the direction of a particular investment which the client could sell.

I recommend that you do not sell your ABC investment.

Yes. This is advice which steers the client away from a particular investment which the client could have sold.

I recommend that you transfer ownership of your ABC investment to your spouse.

Advising the client to gift an investment to another person will not be advice because it does not involve advice on buying, selling, subscribing for or underwriting an investment.

I recommend that you increase the regular payments you are making to your GHI fund*.

Yes. This is advice which steers the client in the direction of acquiring further units in a particular fund.

I recommend that you decrease the regular payments you are making to your GHI fund*.

Yes. This is advice which steers the client in the direction of acquiring further units in a particular fund but advises against the client buying as many as he intended.

I recommend that you keep making the same regular payments to your GHI fund*.

Yes. This is advice which steers the client in the direction of acquiring further units in a particular fund.

I recommend that you stop making the regular payments you are making to the GHI fund*.

Yes. This is advice which steers the client away from buying units in a particular fund which the client could have bought.

I recommend that you pay a lump sum into your GHI fund*.

Yes. This is advice which steers the client in the direction of acquiring further units in a particular fund.

I recommend that you do not pay a lump sum into your GHI fund*.

Yes. This is advice which steers the client away from buying units in a particular fund which the client could have bought.

I recommend that you move part of your investment in the JKL investment from fund X into fund Y*.

Yes. This is advice which steers the client in the direction of selling units in a particular fund and buying units in another specific fund. Where the two funds are sub-funds of the same main fund it is still advice. The terms ‘bought’ and ‘sold’ are given a wide meaning and include any acquisition or disposal for valuable consideration.

I recommend that you move all of your investment in JKL investment from fund X into fund Y*.

Yes, for the same reason.

4I recommend that you keep your investment in fund X*.

Yes. This is advice because it is advice to hold on to an investment and advice not to sell it.

I recommend that you move your MNO investment from platform X and re-register it on platform Y.

This is unlikely to be advice because normally it will not involve buying and selling the investment held on the platform.

A client decides of his own accord to increase, decrease or temporarily suspend his regular payments or the payments are increased automatically into an investment without advice being given.

No. No advice is being given.

The firm is providing discretionary management services under a mandate and makes changes to a client'sinvestment without providing advice.

No. No advice is being given.

Dividends are re-invested into an investment without advice being given.

No. No advice is being given.

* The same answer would apply where the fund is a life policy as rights under a contract of insurance are regulated investments under the Act. The position under a personal pension scheme is similar, as explained in more detail in PERG 12.3.
COLL 6.12.8GRP
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
SYSC 4.7.7RRP

[deleted] [Editor’s note: The text of this provision has been moved to SYSC 24.2.6R]6

FEES 2.2.3GRP
(1) Paragraph15 23(8) of Schedule 1ZA of the Act permits the FCA to recover fees (including fees relating to payment services, the issuance of electronic money, 17CBTL firms, data reporting services providers,17designated credit reference agencies, designated finance platforms16 and, where relevant, FOS levies, 21SFGB levies, TPR SFGB levies and a TPR DA levy19).141820(2) Section 213(6) of the Act permits the FSCS to recover shares of the FSCS levy payable, as a debt owed to the
LR 1.4.1RRP
(1) If it appears to the FCA that there is, or there may be, a breach of the listing rules or the disclosure requirements6 and transparency rules4 by an issuer with a premium listing4, the FCA may in writing require the issuer to appoint a sponsor to advise the issuer on the application of the listing rules, the disclosure requirements6 and the transparency rules4.4(2) If required to do so under (1), an issuer must, as soon as practicable, appoint a sponsor to advise it on the
CASS 1.2.5RRP
1The insurance client money chapter2 does not apply to an authorised professional firm with respect to its non-mainstream regulated activities, which are insurance distribution activities8, if:2(1) the firm's designated professional body has made rules which implement article 10.68 of the IDD8;33(2) those rules have been approved by the FCA under section 332(5) of the Act; and(3) the firm is subject to the rules in the form in which they were approved.
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 22 (Regulatory references),11SYSC 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 (Whistleblowing)11 apply to all credit unions in respect of both their regulated activities and their unregulated activities. SYSC 19F.2 (IDD remuneration incentives) and SYSC 28 (Insurance distribution: specific knowledge, ability and good repute requirements) also apply to credit unions when carrying out insurance distribution activities.11

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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 or persons doing insurance distribution activity11 (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 (Approving and confirming compliance of10 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

11A credit union carrying on insurance distribution activities in relation to life policies will also need to be aware of the relevant requirements in COBS. A firm may also elect to comply with COBS in relation to pure protection contracts that otherwise fall under ICOBS (see ICOBS 1 Annex 1 3.1R(1)).

11Credit 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.

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 or where those members gain rights under such a contract (for example, in relation to a group policy)11. ICOBS does not apply to a credit union taking out an insurance policy5 for its own purposes11, 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.

11Client Assets (CASS)

CASS 5 (Client money: insurance distribution activity) applies to credit unions carrying on insurance distribution activities where the credit union receives or holds money in the course of or in connection with those activities (i.e. where the application rules set out in CASS 5.1.1R are met). This may vary on a case-by-case basis depending on the firm’s business model.

11Product Intervention and Product Governance sourcebook (PROD)

PROD 1.4 (Product Intervention and Product Governance Sourcebook (PROD)) and PROD 4 (Product governance: IDD and pathway investments) apply to credit unions involved in the manufacture or distribution of insurance products.

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 (Reports by skilled11 persons), SUP 6 (Applications to vary and11 cancel Part 4A12permission and to impose, vary or cancel requirements11), 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 FCA11) and SUP 16 (Reporting Requirements). Where credit unions carry on insurance distribution activities and fall within the category provided at SUP 3.1.2R(10), SUP 3.10 and SUP 3.11 (Auditors) will also be relevant.11

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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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

11Consumer 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. Where an exemption applies, the credit union lending will be 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, including entering into conditional sale agreements and/or hire-purchase agreements, 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.

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.