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Status: You are viewing the version of the handbook as on 2009-03-31.

COND 1.3 General

An overview of the threshold conditions is given in COND 1 Annex 1 G.

COND 1.3.1GRP

The guidance in COND 2 explains each threshold condition in Part I of Schedule 6 (threshold conditions) to the Act and how the FSA will interpret it in practice. An overview of the threshold conditions is given in COND 1 Annex 1 G. This guidance is not, however, exhaustive and is written in very general terms. A firm will need to have regard to the obligation placed upon the FSA under section 41 (the threshold conditions) of the Act; that is, the FSA must ensure that the firm will satisfy, and continue to satisfy, the threshold conditions in relation to each regulated activity for which it has, or will have, permission.

COND 1.3.2GRP
  1. (1)

    The FSA will consider whether a firm satisfies, and will continue to satisfy, the threshold conditions in the context of the size, nature, scale and complexity of the business which the firm carries on or will carry on if the relevant application is granted.

  2. (2)

    In relation to threshold conditions 4 and 5, the FSA will consider whether a firm is ready, willing and organised to comply, on a continuing basis, with the requirements and standards under the regulatory system which apply to the firm, or will apply to the firm, if it is granted Part IV permission, or a variation of its permission. These matters will also be considered if the FSA is exercising its own-initiative power (see COND 1.2.3 G). Guidance to firms on the implications of this is given under each of those threshold conditions.

COND 1.3.3GRP

Although the FSA may consider that a matter is relevant to its assessment of a firm, the fact that a matter is disclosed to the FSA, for example in an application, does not necessarily mean that the firm will fail to satisfy the threshold conditions. The FSA will consider each matter in relation to the regulated activities for which the firm has, or will have, permission, having regard to the regulatory objectives set out in section 2 of the Act (The FSA's general duties). A firm should disclose each relevant matter but, if it is appropriate to do so, it is encouraged to discuss it with the FSA. This will enable the FSA to consider fully how material or significant the matter is and how it affects the ability of the firm to satisfy, and continue to satisfy, the threshold conditions (see also COND 2.3.5 G, COND 2.4.4 G (3) and COND 2.5.4 G (3)).

Statutory quotations

COND 1.3.4GRP
  1. (1)

    For ease of reference, the threshold conditions in or under Schedule 6 to the Act have been quoted in full in COND 2.

  2. (2)

    As these provisions impose obligations, they are printed in bold type. The use of bold type is not intended to indicate that these quotations are rules made by the FSA.

  3. (3)

    Where words have been substituted for the text of these provisions the substitutions are enclosed in square brackets ([ ]). However, none of the changes made by the FSA in these quotations for the purpose of the text in COND can supersede or alter the meaning of the statutory provision concerned.