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

GEN 2.2 Interpreting the Handbook

Purposive interpretation

GEN 2.2.1RRP

Every provision in the Handbook must be interpreted in the light of its purpose.

GEN 2.2.2GRP

The purpose of any provision in the Handbook is to be gathered first and foremost from the text of the provision in question and its context among other relevant provisions. The guidance given on the purpose of a provision is intended as an explanation to assist readers of the Handbook. As such, guidance may assist the reader in assessing the purpose of the provision, but it should not be taken as a complete or definitive explanation of a provision's purpose.

Evidential provisions

GEN 2.2.3RRP

Any rule in the Handbook which has the status letter "E" in the margin or heading:

  1. (1)

    is to be taken also to provide that contravention of the rule does not give rise to any of the consequences provided for by provisions of the Act other than section 149(Evidential provisions); and

  2. (2)

    incorporates the status letter "E" in the margin or heading as part of the rule.

GEN 2.2.4GRP
  1. (1)

    The rules to which section 149of the Act applies ("evidential provisions") are identified in the Handbook by the status letter "E" in the margin or heading.

  2. (2)

    Other provisions in the Handbook, although also identified by the status letter "E" in the margin or heading, are actually not rules but provisions in codes and GEN 2.2.3 R does not apply to them. These code provisions are GEN 2.1.4 E, and those provisions in the Code of Practice for Approved Persons (APER 3 and APER 4) and the Code of Market Conduct (MAR 1) with the status letter "E".

GEN 2.2.5GRP

Chapter 6 of the Reader's Guide contains an explanation of the significance of the status letters R, D, P, C, E and G, and includes further information on evidential provisions.1

Use of defined expressions

GEN 2.2.6GRP

Expressions with defined meanings appear in italics in the Handbook.

GEN 2.2.7RRP

In the Handbook (except IPRU, unless otherwise indicated2):

  1. (1)

    an expression in italics which is defined in the Glossary has the meaning given there; and

  2. (2)

    an expression in italics which relates to an expression defined in the Glossary must be interpreted accordingly.

GEN 2.2.8GRP

Examples of related expressions are:

  1. (1)

    "advice on investments" and "advise on investments", which should be interpreted by reference to "advising on investments";

  2. (2)

    "closely linked", which should be interpreted by reference to "close links";

  3. (3)

    "controls" and "controlled", which should be interpreted by reference to "control"; and

  4. (4)

    "effect", as for example in "effect a life policy", which should be interpreted by reference to "effecting contracts of insurance".

GEN 2.2.9GRP

Unless the context otherwise requires, where italics have not been used, an expression bears its natural meaning (subject to the Interpretation Act 1978; see GEN 2.2.11 R to GEN 2.2.12 G).

GEN 2.2.10GRP

The Interim Prudential sourcebooks (IPRU) have individual arrangements for defined terms and each contains rules or guidance on its own arrangements. In respect of those sourcebooks, reliance should not be placed on the definitions which appear in the Glossary unless otherwise indicated.

Application of the Interpretation Act 1978

GEN 2.2.11RRP

The Interpretation Act 1978 applies to the Handbook.

GEN 2.2.12GRP

The application of the Interpretation Act 1978 to the Handbook has the effect, in particular, that:

  1. (1)

    expressions in the Handbook used in the Act have the meanings which they bear in the Act, unless the contrary intention appears;

  2. (2)

    where reference is made in the Handbook to an enactment, it is a reference to that enactment as amended, and includes a reference to that provision as extended or applied by or under any other enactment, unless the contrary intention appears; and

  3. (3)

    unless the contrary intention appears:

    1. (a)

      words in the Handbook importing the masculine gender include the feminine and words importing the feminine gender include the masculine;

    2. (b)

      words in the Handbook in the singular include the plural and words in the plural include the singular.

Cross-references in the Handbook

GEN 2.2.13RRP

A reference in the Handbook to another provision in the Handbook is a reference to that provision as amended from time to time.

References to writing

GEN 2.2.14RRP

If a provision in the Handbook refers to a communication, notice, agreement or other document "in writing" then, unless the contrary intention appears, it means in legible form and capable of being reproduced on paper, irrespective of the medium used. Expressions related to writing must be interpreted accordingly.

GEN 2.2.15GRP

GEN 2.2.14 R means that, for example, electronic media may be used to make communications which are required by a provision of the Handbook to be "in writing", unless a contrary intention appears, or the use of electronic media would contravene some other requirement such as the requirement to treat customers fairly under Principle 6. COB 1.8 (Application to electronic media) contains further guidance in respect of electronic communication with or for customers. GEN 2.2.14 R does not, however, affect any other legal requirement which may apply in relation to the form or manner of executing a document or agreement.

GEN 2.2.16GRP

"Document" is a defined term in the Glossary, the definition of which includes information recorded in any form, including electronic form.

Activities covered by general rules

GEN 2.2.17RRP

A general rule (that is a rule made section 138 of the Act (General rule-making power)) is to be interpreted as:

  1. (1)

    applying to a firm with respect to the carrying on of all regulated activities, except to the extent that a contrary intention appears; and

  2. (2)

    not applying to a firm with respect to the carrying on of unregulated activities, unless and then only to the extent that a contrary intention appears.

Continuity of authorised partnerships and unincorporated associations

GEN 2.2.18RRP
  1. (1)

    If a firm, which is a partnership or unincorporated association, is dissolved,any firm which succeeds to the business of the dissolved firm is to be regarded as the same firm for the purposes of the Handbook .

  2. (2)

    For the purposes of (1), a firm is to be regarded as succeeding to the business of another firm only if:

    1. (a)

      the members of the resulting firm are substantially the same as those of the former firm; and

    2. (b)

      succession is to the whole or substantially the whole of the business of the former firm.

  3. (3)

    In (1), "partnership" does not include a partnership which is constituted under the law of any place outside the United Kingdom and is a body corporate.

GEN 2.2.19GRP

In principle, it is possible to view a change of partners in a partnership, or a change in the membership of the unincorporated association, as the formation of a new partnership or association. GEN 2.2.18 R reflects section 32 of the Act (Partnerships and unincorporated associations), which provides for the continuing authorisation of partnerships and unincorporated associations following a change in partners or members GEN 2.2.18 R ensures a similar effect in relation to the status of the partnership or unincorporated associations as a "firm" or "authorised person" for the purposes of the Handbook. This continuity does not apply if a limited liability partnership succeeds to the business of a dissolved partnership; authorisation of the limited liability partnership would need to be applied for.

3Designated investment exchanges3

GEN 2.2.20GRP

In the Glossary, the definition of designated investment exchange lists certain investment exchanges. Further information on designated investment exchanges, including guidance on the addition of an investment exchange to the list, is set out in GEN 2 Annex 1 G and the obligation to pay the application fee is set out in GEN 2 Annex 23.