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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 138C22 (Evidential provisions); and

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  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 138C22 of the Act applies ("evidential provisions") are identified in the Handbook by the status letter "E" in the margin or heading.

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  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.17

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GEN 2.2.5GRP

Chapter 6 of the Reader's Guide contains an explanation of the significance of the status letters R, E, G, D, UK, EU, P and C6, and includes further information on Handbook provisions, including6 evidential provisions.1

6

Use of defined expressions

GEN 2.2.6GRP

Expressions with defined meanings appear in italics in the Handbook, unless otherwise stated in individual sourcebooks or manuals11.

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";19

  4. (4)

    "effect", as for example in "effect a life policy", which should be interpreted by reference to "effecting contracts of insurance"; and19

  5. (5)

    employment”, which should be interpreted by reference to “employee”.19

GEN 2.2.9GRP

Unless the context otherwise requires or unless otherwise stated in a particular sourcebook or manual11, 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.

4Civil partnership - references to stepchildren etc

GEN 2.2.12ARRP

4Any reference in a provision of the Handbook made before 5 December 2005 to a stepchild, step-parent, stepdaughter, stepson, stepbrother or stepsister is to be interpreted in accordance with section 246 of the Civil Partnership Act 2004.

GEN 2.2.12BGRP

4GEN 2.2.12A R and sections 246 and 247 of the Civil Partnership Act 2004 amend each reference in the Handbook to a stepchild, step-parent and certain related expressions to take account of civil partnerships. As a result a reference (for example) to a stepchild of a person (A) includes a reference to the child of the civil partner of A where that child is not A's child.

Cross-references in the Handbook

GEN 2.2.13RRP
  1. (1)

    A reference in the Handbook to another provision in the Handbook is a reference to that provision as amended from time to time.13

  2. (2)

    Unless a contrary intention appears, a reference in the Handbook to a provision in the PRA Rulebook is a reference to that provision as amended from time to time.13

GEN 2.2.13ARRP

22Unless a contrary intention appears, to the extent that a provision made by the FCA15 ('the referring provision') contains a cross-reference to another provision that is not made by the FCA including a provision formerly made by the PRA which the PRA has now deleted15 ('the referred provision'), the referred provision as amended from time to time (excepting deletion in its entirety)15 is to be treated as having15 been made by the FCA15 to the extent necessary to make the referring provision function with the full effect indicated by the reference.

GEN 2.2.13BGRP

15The purpose of GEN 2.2.13AR is to ensure that cross references in the FCA Handbook to provisions outside the FCA Handbook are effective, including cross references to material that was formerly in the PRA Handbook but which the PRA has now deleted.

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. 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.

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GEN 2.2.15AGRP

22An example of a requirement relevant to whether a communication required by a provision of the Handbook to be "in writing" may be made by use of electronic media is the requirement to treat customers fairly under Principle 6.

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 by the FCA18 the general rule making powers22) is to be interpreted as:

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  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 partnership7 or unincorporated association, is dissolved, but its authorisation continues to have effect under section 32 of the Act (Partnerships and unincorporated associations) in relation to any partnership or unincorporated association7 which succeeds to the business of the dissolved firm, the successor partnership or unincorporated association7 is to be regarded as the same firm for the purposes of the Handbook unless the context otherwise requires7.

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  2. (2)

    [deleted]7

    7
  3. (3)

    [deleted]7

    7
GEN 2.2.19GRP

In principle, it is possible to view a change of partners7 in a partnership7, or a change in the membership of the unincorporated association, as the formation of a new partnership7 or association. GEN 2.2.18 R reflects section 32 of the Act (Partnerships and unincorporated associations), which provides for the continuing authorisation of partnerships7 and unincorporated associations following a change in partners7 or members if certain conditions are satisfied. GEN 2.2.18 R ensures a similar effect to section 327 in relation to the status of the partnership7 or unincorporated associations as a "firm" or "authorised person" for the purposes of the Handbook.

777777977

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 53FEES 3.25.

European Economic Area (EEA)

GEN 2.2.21GRP

10The agreement on the European Economic Area, signed at Oporto on 2 May 1992, extends certain EU legislation to those EEA States which are not Member States of the EU, namely Norway, Iceland and Liechtenstein. References in the Handbook concerning the territorial scope of EU law should therefore be read as extending throughout the EEA where the context requires.

Treaty of Lisbon

GEN 2.2.22GRP

10As a result of the Treaty of Lisbon, the European Union has replaced and succeeded the European Community. References in the Handbook to the European Community should therefore be interpreted as references to the European Union, where the context requires. In particular, references which are copied out directly from EU or UK legislation may contain references to the Community which should be read in conjunction with section 3 of the European Union (Amendment) Act 2008.

Application of provisions made by both the FCA and the PRA

GEN 2.2.23RRP
  1. (1)

    22This rule applies to Handbook provisions made by both the FCA and the PRA, and to Handbook provisions made by the FCA where the PRA have made commensurate provisions in the PRA Rulebook16. It may affect their application by the FCA to PRA-authorised persons and PRA approved persons, and may affect their application by the PRA to any authorised person or approved person1615.

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  2. (2)

    Where a Handbook provision (or part of one) goes beyond the FCA's or PRA's powers or regulatory responsibilities, it is to be interpreted as applied by that regulator to the extent of that regulator's powers and regulatory responsibilities only.

  3. (3)

    The extent of a Handbook provision is to be interpreted as cut back under GEN 2.2.23R (2) by the minimum degree necessary.

  4. (4)

    Where a Handbook provision (or part of one) made by the PRA has been superseded by a provision in the PRA Rulebook, the Handbook provision is to be interpreted as a reference to the PRA Rulebook provision, unless the context otherwise requires. 14

GEN 2.2.24GRP

22The published Memorandum of Understanding between the FCA and the PRA describes their regulatory responsibilities.

GEN 2.2.25GRP

22Examples of rules being interpreted as cut back by GEN 2.2.23 R include the following:

  1. (1)

    [deleted]12

    12
  2. (2)

    SYSC 6.1.1 R requires a firm to maintain adequate policies and procedures to ensure compliance with its obligations under the regulatory system; SYSC 6.1.1 R should be interpreted:

    1. (a)

      as applied by the FCA in respect of a PRA-authorised person's compliance with regulatory obligations that are the responsibility of the FCA (for example, in respect of a bank maintaining policies and procedures to ensure compliance with banking conduct requirements in BCOBS); and,

    2. (b)

      as applied by the PRA in respect of a PRA-authorised person's compliance with those regulatory obligations that are the responsibility of the PRA (for example, in respect of a bank maintaining policies and procedures to ensure compliance with financial resources requirements inthe PRA Rulebook and the EU CRR12).

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  3. (3)

    COMP 5.2.1 R sets out types of protected claims to be covered by the FSCS. The powers of the FCA15 to make this type of rule are set out in the order made under section 213(1A) of the Act. The rule must be read as applying only to the extent of those powers. For example,15 the FCA has no power to make COMP 5.2.1 R (1) as creating protected claims for a protected deposit. As such, those provisions are to be interpreted as not applied by the FCA15.