Related provisions for SYSC 22.6.5
1 - 20 of 176 items.
(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) maintain a record of its dual-regulated firms Remuneration Code staff under the general record-keeping requirements (SYSC 9); and(2) take reasonable steps to ensure that its dual-regulated firms Remuneration Code staff understand the implications of their status as such, including the potential for remuneration which does not comply with certain requirements of the dual-regulated firms Remuneration Code to be rendered void and recoverable by the firm.
A firm must ensure that employees engaged in control functions:(1) are independent from the business units they oversee;(2) have appropriate authority; and(3) are remunerated:(a) adequately to attract qualified and experienced employees; and(b) in accordance with the achievement of the objectives linked to their functions, independent of the performance of the business areas they control.[Note: article 92(2)(e) of CRD and Standard 2 of the FSB Compensation Standards]
(1) A firm's risk management and compliance functions should have appropriate input into setting the remuneration policy for other business areas. The procedures for setting remuneration should allow risk and compliance functions to have significant input into the setting of individual remuneration awards where those functions have concerns about the behaviour of the individuals concerned or the riskiness of the business undertaken.(2) Contravention of (1) may be relied on as
(1) This Remuneration Principle is designed to manage the conflicts of interest which might arise if other business areas had undue influence over the remuneration of employees within control functions. Conflicts of interest can easily arise when employees are involved in the determination of remuneration for their own business area. Where these could arise, they need to be managed by having in place independent roles for control functions (including, notably, risk management
A firm must ensure that:(1) its pension policy is in line with its business strategy, objectives, values and long-term interests;(2) when an employee leaves the firm before retirement, any discretionary pension benefits are held by the firm for a period of five years in the form of instruments referred to in SYSC 19D.3.56R(1); and(3) when an employee reaches retirement, discretionary pension benefits are paid to the employee in the form of instruments referred to in SYSC 19D.3.56R(1)
(1) A firm must ensure that its employees undertake not to use personal hedging strategies to undermine the risk alignment effects embedded in their remuneration arrangements. (2) A firm must ensure that its employees do not use remuneration- or liability-related contracts of insurance to undermine the risk alignment effects embedded in their remuneration arrangements.(3) A firm must maintain effective arrangements designed to ensure that employees comply with their undertaking.[Note:
A firm must ensure that the remuneration policy makes a clear distinction between criteria for setting:(1) basic fixed remuneration that primarily reflects an employee's professional experience and organisational responsibility, as set out in the employee's job description and terms of employment; and(2) variable remuneration that reflects performance in excess of that required to fulfil the employee's job description and terms of employment and that is subject to performance
(1) The non-financial criteria in SYSC 19D.3.39R(1)(b) should include:
1(a) the extent of the employee’s adherence to effective risk management, and compliance with the regulatory system and with relevant overseas regulatory requirements; and1(b) metrics relating to conduct, which should comprise a substantial portion of the non-financial criteria. 1(2) Aligning variable awards to sustainable financial performance requires firms to make appropriate ex-ante adjustments to take
(1) A firm must ensure that guaranteed variable remuneration is not part of prospective remuneration plans.(2) A firm must not award, pay or provide guaranteed variable remuneration unless:(a) it is exceptional;(b) it occurs in the context of hiring new dual-regulated firms Remuneration Code staff;(c) the firm has a sound and strong capital base; and(d) it is limited to the first year of service.[Note: article 94(1)(d) and (e) of the CRD and Standard 11 of the FSB Compensation
(1) Guaranteed variable remuneration should be subject to the same requirements applicable to variable remuneration awarded by the firm including deferral, malus and clawback.(2) The FCA expects that guaranteed variable awards and retention awards should not be common practice for dual-regulated firms Remuneration Code staff and should be limited to rare, infrequent occurrences. The FCA expects a firm to provide prior notification to the FCA of any proposed retention1 awards.
A firm must set an appropriate ratio between the fixed and variable components of total remuneration and ensure that:(1) fixed and variable components of total remuneration are appropriately balanced; and5(2) the level of the fixed component represents a sufficiently high proportion of the total remuneration to allow the operation of a fully flexible policy on variable remuneration components, including the possibility to pay no variable remuneration component.5(3) [deleted]5[Note:
(1) In relation to higher paid material risk takers a2 firm must not award, pay or provide a variable remuneration component unless a substantial portion of it, which is at least 40%, is deferred over a period which is not less than:(a) for dual-regulated firms Remuneration Code staff who perform a FCA-designated senior management function, five years,2 and vesting no faster than on a pro-rata basis;2(b) for dual-regulated firms Remuneration Code staff who perform a PRA-designated
(1) Deferred remuneration paid in:(a) shares or share-linked instruments should be made under a scheme which meets appropriate criteria, including risk adjustment of the performance measure used to determine the initial allocation of shares;(b) cash should also be subject to performance criteria.(2) The FCA would generally expect a firm to have a firm-wide policy (and group-wide policy, where appropriate) on deferral. The proportion deferred should generally rise with the ratio
A firm must ensure that:(1) any variable remuneration, including a deferred portion, is paid or vests only if it is sustainable according to the financial situation of the firm as a whole, and justified on the basis of the performance of the firm, the business unit and the individual concerned;(2) any variable remuneration is subject to clawback, such that it is only awarded if an amount corresponding to it can be recovered from the individual by the firm if the recovery is justified
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
(1) A firm should reduce unvested deferred variable remuneration when, as a minimum:(a) there is reasonable evidence of employee misbehaviour or material error; or(b) the firm or the relevant business unit suffers a material downturn in its financial performance; or(c) the firm or the relevant business unit suffers a material failure of risk management.(2) For performance adjustment purposes, awards of deferred variable remuneration made in shares or other non-cash instruments
(1) A firm must make all reasonable efforts to recover an appropriate amount corresponding to some or all vested variable remuneration where either of the following circumstances arise during the period in which clawback applies (including any part of such period occurring after the relevant employment has ceased):(a) there is reasonable evidence of employee misbehaviour or material error; or(b) the firm or the relevant business unit suffers a material failure of risk management.(2)
(1) Subject to (2) to (7), the rules in SYSC 19D Annex 1.1R to 1.6R apply in relation to the prohibitions on dual-regulated firms Remuneration Code staff being remunerated in the ways specified in:(a) SYSC 19D.3.44R (guaranteed variable remuneration);(b) SYSC 19D.3.59R (1deferred variable remuneration);(c) SYSC 19D.3.61R(2) (performance adjustment – clawback); and(d) SYSC 19D Annex 1.10R (replacing payments recovered or property transferred).(2) Paragraph (1) applies only to those
(1) Sections 137H and 137I of the Act enable the FCA to make rules that render void any provision of an agreement that contravenes specified prohibitions in the dual-regulated firms Remuneration Code, and that provide for the recovery of any payment made, or other property transferred, in pursuance of such a provision.(2) SYSC 19D.3.66R and SYSC 19D.3.67R (together with SYSC 19D Annex 1) are:(a) rules referred to in (1) that render void provisions of an agreement that contravene
[deleted] Editor’s note: The text of this provision has been moved to SYSC 27.7.3R]8
(1) 13A firm must not assess an employee as competent to carry on an activity in TC Appendix 1 until the employee has demonstrated the necessary competence to do so and has (if required by TC Appendix 1) attained 16each module of an appropriate qualification16. This assessment need not take place before the employee starts to carry on the activity.14161613(2) [deleted]28161614
Firms should ensure that employees are appropriately supervised at all times. It is expected that the level and intensity of that supervision will be significantly greater in the period before the firm has assessed the employee as competent, than after. A firm should therefore have clear criteria and procedures relating to the specific point at which the employee is assessed as competent in order to be able to demonstrate when and why a reduced level of supervision may be considered
Firms should ensure that those supervising employees carrying on an activity in TC Appendix 1 have the necessary coaching and assessment skills as well as technical knowledge and experience17 to act as a competent supervisor and assessor. In particular firms should consider whether it is appropriate to require those supervising employees not assessed as competent to attain 16an appropriate qualification 16as well (2729except where2729TC 2.1.5R applies)2729.
161625172417Where an employee has not been assessed as competent to do so and: 24(1) 24gives personal recommendations25 on retail investment products to retail clients24, the firm must ensure that the individual supervising and assessing that employee has attained an appropriate qualification24; or(2) 24gives advice on P2P agreements to retail clients, the firm must ensure that the individual supervising and assessing that employee has attained an appropriate qualification for giving personal
19A firm must ensure that an employee does not carry on any of the activities 23A to 23E in TC Appendix 1 without having an appropriate level of knowledge and competence, which includes an appropriate:(1) knowledge of MCD credit agreements and any ancillary services offered by the firm with them;(2) knowledge of the laws relating to MCD credit agreements for consumers (in particular, consumer protection);(3) knowledge and understanding of the property purchasing process;(4) knowledge
19Where an employee, carrying on an activity in relation to a regulated mortgage contract, has attained the appropriate qualification required by TC Appendix 1, a firm may for the purposes of TC 2.1.5B R assess that employee as having knowledge and competence. Additionally, firms will need to meet any other requirements in this or other sourcebooks that are applicable, taking into account the employee’s role and responsibilities.21
A firm must ensure that an employee does not carry on an activity in TC Appendix 1 (other than an overseeing activity) for which there is a qualification 16requirement without first attaining16 the relevant regulatory module of24: 16(1) 24(in respect of activities other than advising on P2P agreements (activity 9A in TC Appendix 1)) an appropriate qualification; or(2) 24(in respect of advising on P2P agreements (activity 9A in TC Appendix 1)) an appropriate qualification for giving
A firm must ensure that an employee does not carry on any of the following activities without first attaining 16each module of an appropriate qualification:1616(1) [deleted]1616(1A) giving personal recommendations25 on and dealing in securities which are not stakeholder pension schemes, personal pension schemes18 or broker funds; or272916(1B) giving personal recommendations25 on and dealing in derivatives; or2729(2) the activity of a broker fund adviser; or2729(3) advising on
(1) If a firm is satisfied that an employee meets the conditions in this rule then the requirements to have attained 16each module of an appropriate qualification 16will only apply if that employee is carrying on one of the activities specified in this rule.1616(2) The conditions are that a firm should be satisfied that an employee:(a) has at least three years' up-to-date relevant experience in the activity in question obtained while employed outside the United Kingdom;(b) has
Firms should ensure that their employees' training needs are assessed at the outset and at regular intervals (including if their role changes). Appropriate training and support should be provided to ensure that any relevant training needs are satisfied. Firms should also review at regular intervals the quality and effectiveness of such training.
(1) For example, this chapter does not necessarily require a firm to include in a reference the fact that an ex-employee left while disciplinary proceedings were pending or had started. Including such information is likely to imply that there is cause for concern about the ex-employee but the firm may not have established that the ex-employee was actually responsible for misconduct.(2) However, a firm may include such information in a reference if it wishes to (see SYSC 22.3.
(1) A firm supplying a reference in accordance with this chapter owes a duty under the general law to its former employee and the recipient firm to exercise due skill and care in the preparation of the reference.(2) The firm may give frank and honest views, but only after taking reasonable care both as to factual content, and as to the opinions expressed.(3) References should be true, accurate, fair and based on documented fact.
(1) An example of the general duty described in SYSC 22.5.4G is that fairness will normally require a firm to have given an employee an opportunity to comment on information in a reference. The firm might do this through, for example, disciplinary proceedings.(2) Paragraph (1) does not mean that the firm should provide an opportunity to comment on the reference itself, as opposed to the allegations on which it is based. (3) A firm may have given the employee an opportunity to
(1) SYSC 22.2.2R(1) to (3) normally has a six year time limit. SYSC 22.2.2R(3)(c) removes that time limit for serious matters. This paragraph (SYSC 22.5.10G) and SYSC 22.5.11G have guidance about this. This guidance is also relevant to the time limits for updating references in SYSC 22.2.6R.(2) The removal of the time limit does not mean that the time that has elapsed since the matter occurred is irrelevant. The length of time that has elapsed is relevant to deciding whether the
Table: Examples of factors to take into account when deciding whether old misconduct is sufficiently serious to disclose
Factors to take into account |
Comments |
(A) Whether P has committed a serious breach of individual conduct requirements. |
Individual conduct requirements has the same meaning as in Part Two of SYSC 22 Annex 1R (Template for regulatory references given by SMCR firms2 and disclosure requirements). Factors to take into account in deciding whether the breach is serious include the following. (1) The extent to which the conduct was deliberate or reckless. (2) The extent to which the conduct was dishonest. (3) Whether the breaches are frequent or whether they have continued over a long period of time. The fact that breaches were frequent or repeated may increase the likelihood that they should be disclosed since the breaches may show a pattern of non-compliance. (4) The extent of loss, or risk of loss, caused to existing, past or potential investors, depositors, policyholders or other counterparties or customers. (5) The reasons for the breach. For example, where the breach was caused by lack of experience which has been remedied by training or further experience, it is less likely that the breach will still be relevant. |
(B) Whether the conduct caused B to breach requirements of the regulatory system or P was concerned in a contravention of such a requirement by B and, in each case, whether P’s conduct was itself serious. |
(1) The factors in (A) are relevant to whether P’s conduct was serious. (2) The seriousness of the breach by B is relevant. The factors in (A) are also relevant to this. (3) A breach by B of certain requirements is always likely to be serious under (2). Breach of the threshold conditions is an example. However that does not mean that P’s involvement will automatically be serious. |
(C) Whether P’s conduct involved dishonesty (whether or not also involving a criminal act). |
Dishonesty is an important factor but it is not automatically decisive in every case. For instance, a small one-off case of dishonesty many years ago may not be sufficiently serious to require disclosure. |
(D) Whether the conduct would have resulted in B’s dismissing P, had P still been working for B, based on B's disciplinary policies and the requirements of the law about unfair dismissal. |
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(E) Whether the conduct was such that, if B was considering P for a role today and became aware of the historical conduct, B would not employ P today notwithstanding the time that has passed. |
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Note 1: P refers to the employee about whom the reference is being written. |
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Note 2: B refers to the firm giving the reference. |
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SYSC 22.5.13R covers all types of agreements and arrangements. For example:(1) it is not limited to an agreement or arrangement entered into when the employee leaves; (2) it applies however the employment ends (see SYSC 22.5.7G); and(3) it covers a “COT 3” Agreement settled by the Advisory, Conciliation and Arbitration Service (ACAS).
(1) A firm should, wherever feasible, conclude investigative procedures before the employee departs. (2) However, this chapter does not create a duty to investigate alleged misconduct by an employee or former employee.(3) There are several reasons why a firm may find it appropriate to investigate potential misconduct by an employee or former employee, including:(a) assessing the actual and potential damage resulting from misconduct;(b) identifying other individuals potentially
(1) 1For the purposes of TC 2.1.1 R, if an employee carries on an activity in TC Appendix 1 (other than an overseeing activity), a firm must ensure that the employee attains an appropriate qualification within 482months of starting to carry on that activity.(2) For the purposes of (1), a firm must record the date on which the employee starts to carry on that activity.
For the purposes of calculating the 48 2months referred to in TC 2.2A.1 R, a firm must:(1) aggregate periods of time spent carrying on the activity during different periods of employment; and(2) disregard any period of 60 business days or more during which the employee is not carrying on the activity due to being continuously absent from work.
An AIFM must establish, implement and maintain remuneration policies and practices for AIFM Remuneration Code staff that are consistent with, and promote, sound and effective risk management and do not encourage risk-taking which is inconsistent with the risk profile of the instrument constituting the fund of the AIFs it manages.[Note: article 13(1) of AIFMD]
AIFM Remuneration Code staff comprise those categories of staff whose professional activities have a material impact on the risk profiles of the AIFMs or of the AIFs the AIFM manages. This includes senior management, risk takers, control functions, and any employees receiving total remuneration that takes them into the same remuneration bracket as senior management and risk takers.[Note: article 13(1) of AIFMD]
(1) When establishing and applying the total remuneration policies for AIFM Remuneration Code staff (inclusive of salaries and discretionary pension benefits), an AIFM must comply with the AIFM remuneration principles in a way and to the extent that is appropriate to its size, internal organisation and the nature, scope and complexity of its activities.(2) Paragraph (1) does not apply to the requirement for significant AIFMs to have a remuneration committee (SYSC 19B.1.9 R).(3)
(1) 2£500,000 is a particularly high amount for the purpose of SYSC 19B.1.18R (4).(2) Paragraph (1) is without prejudice to the possibility of lower sums being considered a particularly high amount.(3) Whilst any variable remuneration component of £500,000 or more paid to AIFM Remuneration Code staff should be subject to 60% deferral, firms should also consider whether lesser amounts should be considered to be 'particularly high', taking account, for example, of whether there
An AIFM must ensure that:(1) its pension policy is in line with its business strategy, objectives, values and long-term interests of the AIFs it manages;(2) when an employee leaves the firm before retirement, any discretionary pension benefits are held by the firm for a period of five years in the form of instruments in SYSC 19B.1.17R (1); and(3) in the case of an employee reaching retirement, discretionary pension benefits are paid to the employee in the form of instruments referred
(1) UCITS Remuneration Code staff comprise those categories of staff whose professional activities have a material impact on the risk profiles of: (a) the management company; or(b) the UCITS that the management company manages.(2) UCITS Remuneration Code staff must comprise: (a) senior management;(b) risk takers;(c) staff engaged in control functions; and(d) any employees receiving total remuneration that takes them into the same remuneration bracket as senior management and risk
(1) When establishing and applying the remuneration policies for UCITS Remuneration Code staff, a management company must comply with the UCITS remuneration principles in a way and to the extent that is appropriate to: (a) its size;(b) internal organisation; and(c) the nature, scope and complexity of its activities.(2) Paragraph (1) does not apply to the requirement for significant management companies to have a remuneration committee (SYSC 19E.2.9R).(3) The UCITS remuneration
(1) Subject to the legal structure of the UCITS and the instrument constituting the fund, a management company must ensure that a substantial portion, and in any event at least 50%, of any variable remuneration component consists of: (a) units or shares of the UCITS concerned; or (b) equivalent ownership interests in the UCITS concerned; or (c) share-linked instruments relating to the UCITS concerned; or (d) equivalent non-cash instruments relating to the UCITS concerned with
(1) £500,000 should be considered a particularly high amount for the purpose of SYSC 19E.2.20R(4).(2) While any variable remuneration component of £500,000 or more paid to UCITS Remuneration code staff should be subject to 60% deferral, management companies should also consider whether lesser amounts should be considered to be ‘particularly high’. (3) Management companies should take into account, for example, whether there are significant differences within UCITS Remuneration
A management company must ensure that: (1) its pension policy is in line with the business strategy, objectives, values and long-term interests of: (a) the management company; and(b) the UCITS it manages; (2) when an employee leaves the management company before retirement, any discretionary pension benefits are held by the management company for a period of five years in the form of the instruments referred to in SYSC 19E.2.18R(1); and (3) for an employee reaching retirement,
A management company must ensure that its employees undertake not to use any of the following to undermine the risk alignment effects embedded in their remuneration arrangements:(1) personal hedging strategies; or (2) remuneration-related insurance; or(3) liability-related insurance.[Note: article 14b(1)(q) of the UCITS Directive]
(1) A firm must establish, implement and maintain appropriate and effective arrangements for the disclosure of reportable concerns by whistleblowers.(2) The arrangements in (1) must at least:(a) be able effectively to handle disclosures of reportable concerns including: (i) where the whistleblower has requested confidentiality or has chosen not to reveal their identity; and(ii) allowing for disclosures to be made through a range of communication methods; (b) ensure the effective
(1) When establishing internal arrangements in line with SYSC 18.3.1R a firm may:(a) draw upon relevant resources prepared by whistleblowing charities or other recognised standards setting organisations; and (b) consult with its UK-based employees or those representing these employees.(2) In considering if a firm has complied with SYSC 18.3.1R the FCA will take into account whether the firm has applied the measures in (1).(3) A firm may wish to clarify in its written procedures
A firm’s training and development in line with SYSC 18.3.1R(2)(g) should include:(1) for all UK-based employees:(a) a statement that the firm takes the making of reportable concerns seriously;(b) a reference to the ability to report reportable concerns to the firm and the methods for doing so;(c) examples of events that might prompt the making of a reportable concern;(d) examples of action that might be taken by the firm after receiving a reportable concern by a whistleblower,
This rule applies to an EEA SMCR banking firm3 and an overseas SMCR banking firm5.32(1) A person subject to this rule (‘P’) 2must, in the manner described in (2), communicate to its UK-based employees that they may disclose reportable concerns to the PRA or the FCA and the methods for doing so. P 2must make clear that:(a) reporting to the PRA or to the FCA is not conditional on a report first being made using P’s 2internal arrangements; (b) it is possible to report using P’s 2internal
The FCA would regard as a serious matter any evidence that a firm had acted to the detriment of a whistleblower. Such evidence could call into question the fitness and propriety of the firm or relevant members of its staff, and could therefore, if relevant, affect the firm’s continuing satisfaction of threshold condition 5 (Suitability) or, for an approved person or a certification employee, their status as such.
(1) This rule applies where an EEA SMCR banking firm3 or an overseas SMCR banking firm5 has:3(a) a branch in the United Kingdom; and(b) a group entity which is a UK SMCR banking firm3.(2) An EEA SMCR banking firm3 and an overseas SMCR banking firm5 must, in the manner described in (3), communicate to the UK-based employees of its UKbranch:3(a) the whistleblowing arrangements of the group entity that is a UK SMCR banking firm3; and(b) indicate that these arrangements may be used
1Article 72 exempts any financial promotion made by an employer to an employee in relation to a group personal pension scheme or a stakeholder pension scheme. This is subject to certain requirements as follows:(1) the financial promotion must inform the employee that the employer will make a contribution to the pension that the employee will receive from the pension scheme to which the financial promotion relates in the event of the employee becoming a member;(2) the employer
6Article 72A exempts any financial promotion made to an employee by or on behalf of a person (“A”) in relation to a group personal pension scheme or a stakeholder pension scheme. This is subject to certain requirements as follows:(1) the employer and A must have entered into a written contract specifying the terms on which the communication may be made;(2) in the case of a communication made by a person (“B”) on behalf of A, A and B must also have entered into a written contract
6Article 72B exempts any financial promotion made by an employer to an employee in relation to work-related insurance. This is subject to certain requirements as follows:(1) where the provider of the insurance is not the employer, the employer must not receive or have received, any direct financial benefit (including any commission, discount, remuneration or reduction in premium) as a result of making the communication; and(2) where the communication is a non-real time financial
6Article 72C exempts any financial promotion made to an employee by or on behalf of a person (“A”) in relation to work-related insurance. This is subject to certain requirements as follows:(1) the employer and A must have entered into a written contract specifying the terms on which the communication may be made;(2) in the case of a communication made by a person (“B”) on behalf of A, A and B must also have entered into a written contract specifying the terms on which the communication
6Article 72D exempts any financial promotion made by an employer to an employee in relation to a staff mortgage. This is subject to certain requirements as follows:(1) where the provider of the staff mortgage is an undertaking in the same group as the employer, the employer must not receive or have received, any direct financial benefit (including any commission, discount, remuneration or reduction in premium) as a result of making the communication; and(2) where the communication
6Article 72E exempts any financial promotion made to an employee by or on behalf of a person (“A”) in relation to a staff mortgage. This is subject to certain requirements as follows:(1) the employer and A must have entered into a written contract specifying the terms on which the communication may be made;(2) in the case of a communication made by a person (“B”) on behalf of A, A and B must also have entered into a written contract specifying the terms on which the communication
9Article 72F exempts any financial promotion which is made to an employee by or on behalf of a person in relation to an exempt staff loan. An exempt staff loan is defined as a credit agreement which is:(1) offered by a lender to a borrower as an incident of employment with the lender, or with an undertaking in the same group as the lender11; and(2) an exempt agreement under a provision of article 60G (exempt agreements: exemptions relating to the total charge for credit) of the
6The exemptions described in PERG 8.14.40A G to PERG 8.14.40AEA G9 should enable employers (and their contracted service providers) to promote employee benefits packages that include any pension schemes, work-related insurance schemes,9staff mortgages and certain staff loans9 to employees without undue concern that they may be breaching the restriction in section 21 of the Act. PERG 8.14.34 G (Communications by employers and contracted service providers to employees) has further
1Article 73 exempts any financial promotion made by a person in the course of carrying out his duties as an adviser for, or employee of, an advice centre. This is provided the financial promotion relates to:(1) a home finance transaction; or2(2) rights under, or rights to or interests in rights under, a life policy; or(3) a child trust fund within the meaning of section 1(2) of the Child Trust Funds Act 2004; or12(4) controlled claims management activity.12
4The application of this sourcebook is modified for:5(1) a MiFID investment firm and a third country investment firm by the provisions in TC 4.1 where its employee carries on an activity in TC App 1 which is also an activity in TC 4.1.2R; and5(2) a firm carrying on insurance distribution activities by the provisions in TC 4.2.5
(1) An MCD mortgage lender must not remunerate its members of staff or MCD mortgage credit intermediaries in a way that impedes the MCD mortgage lender from complying with the rules.(2) An MCD mortgage credit intermediary must not remunerate its members of staff or appointed representatives in a way that impedes the MCD mortgage credit intermediary from complying with the rules.[Note: article 7(2) of the MCD]
When establishing and applying remuneration policies for members of staff who are responsible for the assessment of affordability for consumers, an MCD mortgage lender must comply with the following principles:(1) be consistent with, and promote, sound and effective risk management;(2) not encourage risk-taking that exceeds the level of tolerated risk of the MCD mortgage lender;(3) be in line with the business strategy, objectives, values and long-term interests of the MCD mortgage
An MCD mortgage adviser, or any other firm that is an MCD mortgage lender or an MCD mortgage arranger that provides advisory services within the meaning of article 4(21) of the MCD, must ensure that the remuneration structure of the members of staff involved does not:(1) prejudice the ability of the members of staff or the firm to act in the consumer's best interest; and(2) be contingent on sales targets.[Note: article 7(4) of the MCD]
(1) 1A firm may have concluded that an employee is unfit or has breached COCON or APER (as described in questions (E) to (F) of Part One of SYSC 22 Annex 1R (Template for regulatory references given by SMCR firms2 and disclosure requirements)). The firm may later become aware of facts or matters causing it to revise its original conclusions.(2) If so, the firm may decide not to disclose in a reference its conclusion or may qualify its conclusion with supplementary information
(1) A firm may have concluded that an employee is unfit or has breached COCON or APER (as described in questions (E) to (F) of Part One of SYSC 22 Annex 1R (Template for regulatory references given by SMCR firms2 and disclosure requirements)). However the firm may consider that the disclosure is incomplete without including mitigating circumstances.(2) For example, if the firm is reporting a breach of COCON it may consider that the breach is very uncharacteristic of the employee
(1) If a firm has taken disciplinary action of the type referred to in question (F) in Part One of SYSC 22 Annex 1R (Template for regulatory references given by SMCR firms2 and disclosure requirements) against an employee and is asked to give a reference about that employee, the firm should (if it has not already done so) consider whether the basis on which it took that action amounts to a breach of any individual conduct requirements covered by question (F). (2) If the firm decides
(1) SYSC 22.2.2R(1) to (3) may require a firm3 to disclose information that goes beyond the mandatory minimum information in Part One of SYSC 22 Annex 1R (Template for regulatory references given by SMCR firms2 and disclosure requirements).2(2) This may mean, for instance, that a firm should in some cases disclose a conclusion that an employee or former employee has breached COCON or APER where that conclusion was reached outside the time limits in Part One of SYSC 22 Annex 1
[deleted] [Editor’s note: The text of this provision has been moved to SYSC 24.2.6R]6
(1) [deleted] Editor’s note: The text of this provision has been moved to SYSC 24.3.2G]66(2) [deleted] [Editor’s note: The text of this provision has been moved to SYSC 24.3.3G]6(3) [deleted] Editor’s note: The text of this provision has been moved to SYSC 24.3.1G]6(4) [deleted]66(5) [deleted] [Editor’s note: The text of this provision has been moved to SYSC 24.3.4G]6
Financial promotions other than unsolicited real time financial promotions are exempt where they follow up an earlier financial promotion which, in compliance with another exemption (such as that for promotions made to high net worth individuals or sophisticated investors – see PERG 8.14.21 G and PERG 8.14.27 G), contains certain indications or information. This is provided the financial promotion:(1) is made by the person who made or directed the earlier financial promotion;(2)
Financial promotions made only to or directed only at certain types of person who are sophisticated enough to understand the risks involved are exempt. These are:(1) authorised persons;(2) exempt persons (where the financial promotion relates to a controlled activity which is a regulated activity for which the person is exempt);(3) governments and local authorities; and(4) persons whose ordinary business involves carrying on a controlled activity of the kind to which the financial
The main purpose of the exemption appears to be to guard against the possibility that, during the course of a broadcast interview or a live website presentation, a financial promotion is made inadvertently by a director or employee of a company or other business undertaking when he is not acting in the capacity of a journalist (see PERG 8.12.25 G). The exemption applies if the financial promotion relates only to:(1) shares of the undertaking or of another undertaking in the same
The exemption applies where the financial promotion:(1) comprises words which are spoken by the director or employee and not broadcast, transmitted or displayed in writing; or(2) is displayed in writing only because it is part of an interactive dialogue to which the director or employee is a party and in the course of which he is expected to respond immediately to questions put by a recipient of the communication.This is provided that the financial promotion is not part of an
The second part of the exemption (referred to in PERG 8.12.34G (2)) envisages that the director or employee will be holding the equivalent of a conversation conducted in writing. Typically this will involve the exchange of e-mails. It is possible that this part of the exemption could be used by companies making so-called webcasts over the Internet. However, this would only be the case if the service through which the webcast is provided is a regularly updated news or information
(1) In order to decide whether someone is an employee of a branch, the Glossary definition of employee is applied to the branch as if the branch and the firm of which it forms part were separate firms.(2) For the purpose of (1), paragraph (4A)(c) of the definition of employee (someone employed elsewhere in the group) does not apply.
(1) Firms may use the following wording, or alternative wording which has substantively the same meaning, in any settlement agreement:“For the avoidance of doubt, nothing precludes [name of worker] from making a “protected disclosure” within the meaning of Part 4A (Protected Disclosures) of the Employment Rights Act 1996. This includes protected disclosures made about matters previously disclosed to another recipient.”(2) Compliance with (1) may be relied on as tending to establish
(1) Firms must not request that workers enter into warranties which require them to disclose to the firm that:(a) they have made a protected disclosure; or(b) they know of no information which could form the basis of a protected disclosure.(2) Firms must not use measures intended to prevent workers from making protected disclosures.
(1) The purposes of this section are to:(a) provide UK recognised bodies with guidance regarding the provisions of PIDA; and(b) Encourage UK recognised bodies to consider adopting and communicating to workers appropriate internal procedures for handling workers' concerns as part of an effective risk management system.(2) In this section "worker" includes, but is not limited to, an individual who has entered into a contract of employment.
In accordance with section 1 of PIDA:(1) a "protected disclosure" is a qualifying disclosure which meets the relevant requirements set out in part 4A of the Employment Rights Act 19963;3(2) a "qualifying disclosure" is a disclosure, made in the public interest3, of information which, in the reasonable belief of the worker making the disclosure, tends to show that one or more of the following (a "failure") has been, is being, or is likely to be, committed:3(a) a criminal offence;
(1) UK recognised bodies are encouraged to consider adopting appropriate internal procedures which will encourage their workers with concerns to blow the whistle internally about matters which are relevant to the functions of the FCA.22(2) In considering appropriate internal procedures, UK recognised bodiesmay find the guidance provided to firms in SYSC 18.2.2 G (2) and SYSC 18.2.2 G (3)1 helpful.1
[deleted] 5
Table: To whom does COCON apply? 9
9Persons to whom COCON applies |
Comments9 |
(1) An SMF manager.9 |
|
(2) An employee (“P”) of an SMCR firm12 who:9 (a) performs the function of an SMF manager;9 (b) is not an approved person to perform the function in question; and9 (c) is required to be an approved person at the time P performs that function.9 |
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(3) An employee of an SMCR firm12 who would be performing an FCA-designated senior management function12 but for SUP 10C.3.13R (The 12-week rule). 9 |
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(4) A certification employee of an SMCR firm12.9 |
This applies even if the certification employee has not been notified that COCON applies to them or notified of the rules that apply to them.9 |
(5) An employee of an SMCR firm who would be performing an FCA certification function but for SYSC 27.5.1R (Emergency appointments) or SYSC 27.5.3R (Temporary12 UK role). 9 12 |
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(6) Any employee of an SMCR firm12 not coming within another row of this table, except one listed in column (2) of this row (6) of this table12. 9 |
(A)12 This row (6)12 does not apply to an employee of an SMCR firm12 who only performs functions falling within the scope of the following roles:9 (a) receptionists; (b) switchboard operators; (c) post room staff; (d) reprographics/print room staff; (e) property/facilities management; (f) events management; (g) security guards; (h) invoice processing; (i) audio visual technicians; (j) vending machine staff; (k) medical staff; (l) archive records management; (m) drivers; (n) corporate social responsibility staff; (o) taking part in following activities of the firm:14 14 (i) the firm’s activities as a data controller; or 14(ii) the firm’s activities of data processing; as defined in the data protection legislation, but subject to Note (1) of this table14;data protection legislation;10 (p) cleaners; (q) catering staff; (r) personal assistant or secretary; (s) information technology support (ie, helpdesk); and (t) human resources administrators /processors. 121417 |
(7) [deleted]12 9 |
9 |
(8) A board director of: a UK SMCR firm.12 9999 |
9 |
| 9 | |
14Note (1): A function is only within paragraph (o) of column (2) (Comments) of row (6) of this table if the function does not require the employee concerned to exercise a significant amount of discretion or judgment. |
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(1) COCON applies to the conduct of 6conduct rules staff set out in (2) 6wherever it is performed.(2) 6This rule applies to:(a) a senior conduct rules staff member; and(b) a certification employee performing FCA certification function (6)12 (material risk takers) in the table in SYSC 27.7.3R for a UK SMCR firm12.12
(1) This rule applies to members of a firm’sconduct rules staff apart from conduct rules staff in COCON 1.1.9R. 6522(2) Subject to (3), COCON only applies to the conduct of persons to whom this rule applies (as set out in (1)) if that conduct:6(a) 6is performed from an establishment maintained in the United Kingdom by the SMCR firm; or12(b) 6involves dealing with a client of the firm in the United Kingdom from an establishment overseas.5(3) 6Paragraph (2)(b) only applies to a