Content Options

View Options

Status: You are viewing the version of the handbook as on 2005-06-30.

AUTH 5.3 Qualification for authorisation under the Act

EEA firms

AUTH 5.3.1G

Section 31 of the Act (Authorised persons) states that an EEA firm is authorised for the purposes of the Act if it qualifies for authorisation under Schedule 3 to the Act (EEA Passport Rights). Under paragraph 12 of Part II of that Schedule, an EEA firm qualifies for authorisation if:

  1. (1)

    it is seeking to establish a branch in the United Kingdom in exercise of an EEA right and satisfies the establishment conditions (see AUTH 5.4.2 G); or

  2. (2)

    it is seeking to provide cross border services into the United Kingdom in exercise of an EEA right and satisfies the service conditions (see AUTH 5.5.3 G).

AUTH 5.3.2G
  1. (1)

    On qualifying for authorisation, subject to AUTH 5.3.2 G (1A), an EEA firm will have permission to carry on each permitted activity (see (2) below) which is a regulated activity:

    1. (a)

      through its UK branch (if it satisfies the establishment conditions); or

    2. (b)

      by providing cross border services into the United Kingdom (if it satisfies the service conditions).

  2. (1A)
    1. (a)

      Paragraph (1) does not apply to the activity of dealing in units in a collective investment scheme in the United Kingdom where:

      1. (i)

        the firm is an EEA UCITS management company;

      2. (ii)

        the firm satisfies the establishment conditions in AUTH 5.4.2 G; and

      3. (iii)

        the FSA notifies the EEA firm and the EEA firm's Home State regulator that the way in which it intends to market a relevant scheme in the United Kingdom does not comply with the law in force in the United Kingdom.

    2. (b)

      The FSA's notice under (1A)(a)(iii) has to be given to the EEA firm within two months of receiving the consent notice (AUTH 5.4.2 G(1)) and will be similar to a warning notice.

    3. (c)

      For details of the FSA's procedures for the giving of warning notices and references to the Tribunal, see DEC 2.2 (Statutory notice procedure: Warning notice and decision notice procedure) and DEC 5 (References to the Tribunal, publication and services of notices).

  3. (2)

    The permitted activities of EEA firm are those activities identified in the consent notice, regulator's notice or notice of intention. Permitted activities may include activities that are within the scope of a Single Market Directive but which are unregulated activity in the United Kingdom.

  4. (3)

    Paragraph 15(2) of Part II of Schedule 3 to the Act states that this permission is treated as being on terms equivalent to those appearing in the consent notice, regulator's notice or notice of intention. For example, it will reflect any limitations or requirements which are included in the firm's Home State authorisation.31

AUTH 5.3.3G

An EEA firm which has qualified for authorisation is referred to in the Handbook as an incoming EEA firm.

Treaty firms

AUTH 5.3.4G

Under section 31 of the Act, a Treaty firm is authorised for the purposes of the Act if it qualifies for authorisation under Schedule 4 (Treaty Rights), that is:

  1. (1)

    the Treaty firm is seeking to carry on a regulated activity; and

  2. (2)

    the conditions set out in paragraph 3(1) of Schedule 4 to the Act are satisfied.

AUTH 5.3.5G

The conditions in paragraph 3(1) of Schedule 4 to the Act are that:

  1. (1)

    the Treaty firm has received authorisation under the law of its Home State to carry on the regulated activities it seeks to carry on (under paragraph 3(2)). A Treaty firm is not to be regarded as so authorised unless its Home State regulator has so informed the FSA in writing); and1

  2. (2)

    the relevant provisions of the law of the firm's Home State:

    1. (a)

      afford equivalent protection (see AUTH 5.3.6 G); or

    2. (b)

      satisfy the conditions laid down by a Community instrument for the co-ordination or approximation of laws, regulations, or administrative provisions of EEA States relating to the carrying on of that activity; and

  3. (3)

    the Treaty firm has no EEA right to passport in relation to that activity under one of the Single Market Directives in respect of that activity.

AUTH 5.3.6G

Paragraph 3(3) of Schedule 4 to the Act states that Home State provisions afford equivalent protection if, in relation to the Treaty firm carrying on of the regulated activity, they afford consumers protection which is at least equivalent to that afforded by or under the Act in relation to that activity. A certificate issued by the Treasury that the provisions of the law of a particular EEA State afford equivalent protection in relation to the activities specified in the certificate is conclusive evidence of that fact.1

AUTH 5.3.7G

On qualifying for authorisation a Treaty firm will have permission to carry on each permitted activity which is a regulated activity. This permission will be treated on the same terms as those which apply to the Treaty firm's Home State authorisation. For example, it will reflect any limitations or requirements which are included in the firm's Home State authorisation. 1

AUTH 5.3.8G

The effect of paragraph 5(1) and 5(2) of Schedule 4 to the Act is that a Treaty firm which qualifies for authorisation under that Schedule must, at least seven days before it carries on any of the regulated activities covered by its permission, give the FSA written notice of its intention to do so. Failure to do so is a criminal offence under paragraph 6(1) of that Schedule.1

AUTH 5.3.9D
  1. (1)

    A notice from a Treaty firm under paragraph 5 (2) of the Schedule 4 to the Act must be given in writing in the manner directed, and with the information required, in the information pack provided by the FSA.

  2. (2)

    The notice must be:

    1. (a)

      given to a member of, or addressed for the attention of, the Enquiries and Application Department (Applications team); and2

    2. (b)

      delivered to the FSA by one of the methods in (3).

  3. (3)

    The notice may be delivered by:

    1. (a)

      post to the address in AUTH 5.3.11 G below; or

    2. (b)

      leaving the application at the address in AUTH 5.3.11 G below and obtaining a time-stamped receipt; or1

    3. (c)

      hand delivery to a member of the Enquiries and Applications Department (Applications team).2

AUTH 5.3.10G
  1. (1)

    The information pack required by AUTH 5.3.9 D should be accompanied by confirmation of the Treaty firm's authorisation from the Home State regulator, as referred to in AUTH 5.3.5 G (1).

  2. (2)

    An information pack may be obtained from the Authorisation and Approvals Department (Authorisation teams).2

AUTH 5.3.11G
  1. (1)

    To contact the Authorisation and Approvals Department (Authorisation teams):

    1. (a)

      telephone on +4420 7066 3954 or fax on +4420 7066 xxxx; or

    2. (b)

      write to: Authorisation and Approvals Department (Authorisation teams), The Financial Services Authority, 25 The North Colonnade, Canary Wharf, London, E14 5HS; or1

    3. (c)

      email corporate.authorisation@fsa.gov.uk2

AUTH 5.3.12G
  1. (1)

    The guidance in AUTH 2 (Authorisation and regulated activities) is relevant to Treaty firms to help them determine if they require authorisation under the Act.

  2. (2)

    A Treaty firm which qualifies for authorisation is referred to in the Handbook as an incoming Treaty firm. It has, for each regulated activity for which the conditions in AUTH 5.3.5 G are satisfied, permission, under paragraph 4 of Schedule 4 to theAct, to carry it on through its UK branch or by providing cross border services into the United Kingdom.

AUTH 5.3.13G
  1. (1)

    An EEA firm that is carrying on both direct insurance and reinsurance business will be entitled to passport under Schedule 3 to the Act in relation to the direct insurance business. It will also have a Treaty right under Schedule 4 to the Act. Such EEA firms are advised to discuss their particular circumstances with the Enquiries and Applications Department (Applications team) before sending in their notification under AUTH 5.5.3 G.2

  2. (2)

    An insurance company with its head office in an EEA State other than the United Kingdom that is carrying on pure reinsurance business in that State, and which wishes to carry on such business in the United Kingdom, is advised to discuss its particular requirements with the Enquiries and Applications Department (Applications team). It may be entitled to exercise a Treaty right provided it satisfies the conditions in paragraph 3(1) of Schedule 4 to the Act (see AUTH 5.3.5 G). Otherwise, it will have to seek a Part IV permission (see AUTH 3 (Applications for Part IV Permission)).2

UCITS qualifiers

AUTH 5.3.14G

Under Schedule 5 to the Act (Persons concerned in collective investment schemes), a person who for the time being is an operator, trustee or depository of a scheme which is a recognised scheme under section 264 of the Act is an authorised person. Such a person is referred to in the Handbook as a UCITS qualifier.

AUTH 5.3.15G

A UCITS qualifier has permission under paragraph 2 of Schedule 5 to the Act, to carry on, as far as is appropriate to the capacity in which it acts in relation to the scheme:

  1. (1)

    the establishing, operating or winding up of a collective investment scheme, and

  2. (2)

    any activity in connection with, or for the purposes of, the scheme. 2

AUTH 5.3.16G

A UCITS qualifier should refer to COLLG or to the following sections of COLL and CIS for requirements for recognised schemes:

  1. (1)

    COLLG 9.2.1G and CIS 16.1.8 G for guidance on notifications;

  2. (2)

    COLLG 9.2.1G and CIS 17.2 for guidance on information and documentation requirements; and

  3. (3)

    COLL 9.4 and CIS 17.4 which includes guidance on what facilities need to be maintained.4