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AUTH 3.15 Specific obligations: applicants seeking to manage PEPS or ISAS

AUTH 3.15.1G

Management of PEPs and ISAs, in themselves, are not regulated activities in the Regulated Activities Order although the activities carried on by a firm in relation to PEP and ISA management constitute regulated activities. As a result, where the firm has Part IV permission which includes the regulated activities which would otherwise permit the firm to manage a PEP or an ISA, the FSA controls participation in these activities by using requirements on the firm's permission (see AUTH 3.7.3 G).

AUTH 3.15.2G
  1. (1)

    An applicant seeking to manage PEPs or ISAs must complete the relevant sections of the application forms for Part IV permission, specifying the types of ISA and their constituent components which it intends to manage. An applicant should check that the regulated activities for which it is seeking permission will permit it to carry on the proposed activities in respect of the component concerned (for example, one of the sub categories of safeguarding and administering assets of the component includes equities) and:

    1. (a)

      consider whether it needs to hold or control client money (see AUTH 3.14) if it has not applied for permission including accepting deposits; or

    2. (b)

      have plans to put in place contractual provisions under which it will receive client money as agent for an approved bank so that any loss in relation to the ISA cash component will be compensated for by that approved bank or the compensation scheme.

  2. (2)

    Cash ISAs raise particular issues. Applicants may find it helpful to seek an independent legal opinion on their proposals before they proceed and may wish to discuss their proposals with the FSA.

AUTH 3.15.3G

Applicants should also be aware that a firm wishing to act as an ISA or PEP manager will have to obtain approval from HM Revenue and Customs 1as an account manager under the HM Revenue and Customs 1regulations.

AUTH 3.15.4G

To manage ISAs or PEPs, an applicant must be able to demonstrate to the FSA that it can satisfy and continue to satisfy the threshold conditions should the application for Part IV permission be granted. This will include demonstrating that it is ready, willing and organised to comply with the relevant regulatory and HM Revenue and Customs 1requirements.

AUTH 3.15.5G

If an applicant is not able to demonstrate to the FSA that it is able to comply with those obligation, the FSA will impose a requirement on the firm's permission to the effect that the firm will not be able to manage PEPs or ISAs.