Status: Please note you should read all Brexit changes to the FCA Handbook and BTS alongside the main FCA transitional directions. Where these directions apply the 'standstill', firms have the choice between complying with the pre-IP completion day rules, or the post-IP completion day rules. To see a full list of Handbook modules affected, please see Annex B to the main FCA transitional directions.

APER 4.2 Statement of Principle 2

APER 4.2.1G

[deleted]5

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APER 4.2.1AGRP

5The Statement of Principle 2 (see APER 2.1A.3 R3) is in the following terms: "An approved person must act with due skill, care and diligence in carrying out his accountable functions."

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APER 4.2.2GRP

3In the opinion of the FCA, conduct of the type described in APER 4.2.3G, APER 4.2.5G, APER 4.2.6G, APER 4.2.8G, APER 4.2.10G, APER 4.2.11G or APER 4.2.14G does not comply with Statement of Principle 2.

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APER 4.2.2AGRP

3 5In the opinion of the FCA, conduct of the type described in described in APER 4.2.13 G does not comply with Statement of Principle 2.

APER 4.2.3GRP

3Failing to inform:

  1. (1)

    a customer; or

  2. (2)

    his APER employer4 (or its auditors or an actuary appointed by his APER employer4 under SUP 4 Actuaries)1);

    1

of material information in circumstances where they were aware, or ought to have been aware, of such information, and of the fact that they should provide it, falls within APER 4.2.2G.

APER 4.2.4GRP

3Behaviour of the type referred to in APER 4.2.3 G includes, but is not limited to:

  1. (1)

    failing to explain the risks of an investment to a customer;

  2. (2)

    failing to disclose to a customer details of the charges or surrender penalties of investment products;

  3. (3)

    mismarking trading positions;

  4. (4)

    providing inaccurate or inadequate information to a APER employer4, its auditors or an actuary appointed by his APER employer4 under SUP 4 (Actuaries)1;

    1
  5. (5)

    failing to disclose dealings where disclosure is required by the APER employer's4 personal account dealing rules.

APER 4.2.5 GRP

3Recommending an investment to a customer, or carrying out a discretionary transaction for a customer, where the approved person does not have reasonable grounds to believe that it is suitable for that customer, falls within APER 4.2.2 G.

APER 4.2.6GRP

3Undertaking, recommending or providing advice on transactions without a reasonable understanding of the risk exposure of the transaction to a customer falls within APER 4.2.2 G.

APER 4.2.7GRP

3Behaviour of the type referred to in APER 4.2.6 G includes, but is not limited to, recommending transactions in investments to a customer without a reasonable understanding of the liability (either potential or actual) of that transaction.

APER 4.2.8GRP

3Undertaking transactions without a reasonable understanding of the risk exposure of the transaction to the APER employer4 falls within APER 4.2.2 G.

APER 4.2.9GRP

3Behaviour of the type referred to in APER 4.2.8 G includes, but is not limited to, trading on the APER employer's4 own account without a reasonable understanding of the liability (either potential or actual) of the transaction.

APER 4.2.10GRP

3Failing without good reason to disclose the existence of a conflict of interest in connection with dealings with a client falls within APER 4.2.2 G.

APER 4.2.11GRP

3Failing to provide adequate control over a client's assets falls within APER 4.2.2 G.

APER 4.2.12GRP

3Behaviour of the type referred to in APER 4.2.11 G includes, but is not limited to:

  1. (1)

    failing to segregate a client's assets;

  2. (2)

    failing to process a client's payments in a timely manner.

APER 4.2.13GRP

3Continuing to perform a controlled function despite having failed to meet the standards of knowledge and skill set out in the Training and Competence sourcebook (TC) for that controlled function falls within APER 4.2.2AG.

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APER 4.2.14GRP

32Failing to pay due regard to the interests of a customer, without good reason, falls within APER 4.2.2 G.