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

COND 2.2 Threshold condition 2: Location of offices

COND 2.2.1UK

Paragraph 2, Schedule 6 to the Act.

4(1)

Subject to sub-paragraphs 1(A) and3 (3), if the person concerned is a body corporate constituted under the law of any part of the United Kingdom -

3

(a)

its head office, and

(b)

if it has a registered office, that office, must be in the United Kingdom.

3(1A)

If -

3(a)

the regulated activity concerned is any of the investment services and activities, and

3(b)

the person concerned is a body corporate with no registered office,

3sub-paragraph (1B) applies in place of sub-paragraph (1).

3(1B)

If the person concerned has its head office in the United Kingdom, it must carry on business in the United Kingdom.

(2)

If the person concerned has its head office in the United Kingdom but is not a body corporate, it must carry on business in the United Kingdom.

(3)

If the regulated activity concerned is an insurance mediation activity, sub-paragraph (1) does not apply.1

(4)

If the regulated activity concerned is an insurance mediation activity, the person concerned -1

(a)

if he is a body corporate constituted under the law of any part of the United Kingdom, must have its registered office, or if it has no registered office, its head office, in the United Kingdom;1

(b)

if he is a natural person, is to be treated for the purposes of subparagraph (2), as having his head office in the United Kingdom if his residence is situated there.1

(5)

"Insurance mediation activity" means any of the following activities -1

(a)

dealing in rights under a contract of insurance as agent;1

(b)

arranging deals in rights under a contract of insurance;1

(c)

assisting in the administration and performance of a contract of insurance;1

(d)

advising on buying or selling rights under a contract of insurance;1

(e)

agreeing to do any of the activities specified in sub-paragraph (a) to (d).1

(6)

Paragraph (5) must be read with -1

(a)

section 22;1

(b)

any relevant order under that section; and1

(c)

Schedule 2.21

3[Note: article 5(4) of MiFID]

COND 2.2.2GRP

Threshold condition 2(1) and (2) (Location of offices), implement the requirements of article 6 of the Post BCCI Directive and article 5(4) of MiFID3 and threshold condition 2(3) and (4) implements article 2.9 of the Insurance Mediation Directive, although the Act extends threshold condition 2 to firms which are outside the scope of the Single Market Directives and the UCITS Directive.1

COND 2.2.3GRP

Neither the Post BCCI Directive, MiFID,3 the Insurance Mediation Directive nor the Act define what is meant by a firm's 'head office'. This is not necessarily the firm's place of incorporation or the place where its business is wholly or mainly carried on. Although the FSA will judge each application on a case-by-case basis, the key issue in identifying the head office of a firm is the location of its central management and control, that is, the location of: 1

  1. (1)

    the directors and other senior management, who make decisions relating to the firm's central direction, and the material management decisions of the firm on a day-to-day basis; and

  2. (2)

    the central administrative functions of the firm (for example, central compliance, internal audit).