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

ELM 1.5 Application of other parts of the Handbook to ELMIs

ELM 1.5.1G

The application of other parts of the rest of the Handbook to ELMIs is summarised in ELM 1.5.2 G. For the detailed application of each chapter, see the Application provision at the start of the chapter or section. ELM 1.5.2 G does not apply to an incoming EEA firm, incoming Treaty firm or small e-money issuer.

ELM 1.5.2G

Application of other parts of the Handbook to ELMIs

Block

Module

Application

High level standards

1111

Principles for businesses (PRIN)

Applies to every ELMI. As explained in PRIN 1.1.3 G, the Principles apply with respect to regulated activities generally, but, in applying the Principles with respect to issuing e-money, the FSA will proceed only in a prudential context.

Threshold conditions (COND)

Applies to every ELMI. Threshold condition 1 says that a firm that wishes to issue e-money must be a body corporate or a partnership. (See COND 2.1 for more detail.)

Statements of principle and code of practice for approved persons (APER)

Applies to every approved person who performs a controlled function for an ELMI.

The fit and proper test for approved persons (FIT)

Applies in relation to the criteria that the FSA will consider when assessing the fitness and propriety of a candidate for a controlled function to be performed for an ELMI. It is also relevant in assessing the continuing fitness and propriety of approved persons carrying on such a controlled function.

Senior management arrangements, systems and controls (SYSC)

SYSC 1 (Application and purpose), SYSC 2 (Senior management arrangements), SYSC 3 (Systems and controls), SYSC 12.1 (Group risk systems and control requirement) and SYSC 18 (Guidance on Public Interest Disclosure Act: Whistleblowing) apply13 to every ELMI.

13

General provisions (GEN)

Applies to every ELMI.

Business Standards

Interim Prudential sourcebooks: IPRU(INS), IPRU(FSOC), IPRU(BANK), IPRU(BSOC) and IPRU(INV)

These sourcebooks do not apply to ELMIs.

13Prudential sourcebook for Banks, Building Societies and Investment Firms (BIPRU)

ELM 7 (Consolidated financial supervision) applies BIPRU 8 (Group risk-consolidation) to certain ELMIs who are members of a group.13

General Prudential sourcebook (GENPRU)13

GENPRU 1.4 (Actions for damages), GENPRU 3.1 (Cross sector groups), GENPRU 3.2 (Third country groups), GENPRU 3 Ann 1R (Capital adequacy calculations for financial conglomerates), GENPRU 3 Ann 2R (Prudential rules for third country groups), GENPRU 3 Annex 3G (Financial conglomerates: Cooperative decision making by competent authorities and consultation) and GENPRU 3 Ann 4R (Classification of groups) apply to an ELMI.13

13Other sourcebooks in Prudential Standards (Block 2): Prudential sourcebook for Insurers (INSPRU), Prudential sourcebook for Mortgage and Home Finance Firms, and Insurance Intermediaries (MIPRU) and Prudential sourcebook for UCITS Firms (UPRU)

These sourcebooks do not apply to ELMIs.

Market Conduct (MAR)

MAR 1 (The Code of Market Conduct) applies if an ELMI is seeking guidance as to whether or not behaviour amounts to market abuse. MAR 2 (Price Stabilising Rules), MAR 3 (Inter-Professional Conduct) and MAR 4 (Endorsement of the Takeover Code) do not apply to an ELMI when issuing e-money. MAR 5 (Multilateral Trading Facilities1418) will not apply to an ELMI, as there are restrictions on the type of business activities that an ELMI may carry on.2

1418

Conduct of Business sourcebook (COBS18)

18

The effect of :7

(1) ELM 6.8.2A R is that COBS 518 (Distance18 contracts) applies to a firm issuing e-money18;7

(2) ELM 1.4A.5 R is that COBS 15.3.4 R, COBS 15.3.1 Rand COBS 15.418 apply; and

7

(3) [deleted]18

Otherwise,COBS does not apply to an ELMI when issuing e-money18 and18 the rules in COBS18 about financial promotions do not usually apply to e-money, but may do so in certain situations.7

1818718181818

Insurance: Conduct of Business sourcebook (ICOBS)199

19

Does not apply to an ELMI when issuing e-money9

Mortgages: Conduct of Business sourcebook (MCOB)3

Does not apply to an ELMI when issuing e-money

Client Assets sourcebook (CASS)

Does not apply to an ELMI when issuing e-money.4

Training and Competence Sourcebook (TC)

TC15 applies to a firm whose employees carry on activities listed in TC App 115. Those activities do not include issuing e-money.12

1515

Regulatory processes

17Supervision manual (SUP)

The following chapters of SUP apply to every ELMI: 1, 2, 3, 5, 6, 7, 8, 9, 10, 11, 13, 15, 16 and 20. The following chapters of SUP do not apply to an ELMI: 4, 12, 14, 17, 18 and 19.

Decision, Procedure and Penalties Manual (DEPP)16

16

Applies to every ELMI.

Redress

1111

Complaints (DISP)

Applies to every ELMI.

Compensation (COMP)

An ELMI is not a participant firm for the purposes of COMP in relation to issuing e-money. Under article 9J of the Regulated Activities Order, the compensation scheme is not to provide for the compensation of persons in respect of claims made in connection with issuing e-money.

Complaints against the FSA (COAF)

Applies to every ELMI.

Specialist sourcebooks other than ELM

1111

Credit unions (CRED), Professional firms, (PROF), Collective Investment Schemes (CIS) or COLL)6 and Recognised Investment Exchanges and Recognised Clearing Houses (REC).

13

These sourcebooks do not apply to an ELMI.

[deleted]18

18

[deleted]18

18

Listing, Prospectus and Disclosure11

Listing Rules (LR)

May apply if the ELMI is applying for listing in the United Kingdom or is a listed issuer in the United Kingdom.

Prospectus Rules (PR)

May apply if the ELMI makes an offer of transferable securities to the public in the United Kingdom or is seeking the admission to trading of transferable securities on a regulated market situated or operating in the United Kingdom.

Disclosure Rules and Transparency Rules (DTR)

May apply if the ELMI is an issuer, any class of whose financial instruments have been admitted to trading on a regulated market, or are the subject of an application for admission to trading on a regulated market, other than issuers who have not requested or approved admission of their financial instruments to trading on a regulated market.5