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PERG 1.1 Application and purpose

Application

PERG 1.1.1 G

This manual applies to:

  1. (1)

    a person who is considering carrying on activities in the United Kingdom which may fall within the scope of the Act and is seeking guidance on whether he needs to be an authorised person;

  2. (2)

    a person who seeks to become an authorised person under the Act and who is, or is considering, applying for Part 4A permission to carry on regulated activities in the United Kingdom;

  3. (3)

    a person who is seeking guidance on whether any communication he may be seeking to make or cause to be made will be a financial promotion and be subject to the restriction in section 21 of the Act; and

  4. (4)

    persons generally.

Purpose

PERG 1.1.2 G

The purpose of this manual is to give guidance about the circumstances in which authorisation is required, or exempt person status is available, including guidance on the activities which are regulated under the Act and the exclusions which are available.

PERG 1.2 Introduction

PERG 1.2.1 G
  1. (1)

    The Financial Services and Markets Act 2000 (the Act) is the UK legislation under which bodies corporate, partnerships, individuals and unincorporated associations are permitted by the FCA or PRA to carry on various financial activities which are subject to regulation (referred to as regulated activities).

  2. (2)

    The activities which are regulated activities are specified in the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (the Regulated Activities Order): for example, accepting deposits, managing investments, effecting contracts of insurance, dealing in investments as agent. In general terms, a regulated activity is an activity, specified in the Regulated Activities Order, carried on by way of business in relation to one or more of the investments specified in the Regulated Activities Order. PERG 2 gives further general guidance on regulated activities and specified investments.

PERG 1.2.2 G
  1. (1)

    The Act, and the secondary legislation made under the Act, is complex. Although PERG gives guidance about regulated activities and financial promotions, it does not aim to, nor can it, be exhaustive.

  2. (2)

    References have been made to relevant provisions in the Act or secondary legislation. However, since reproducing an entire statutory provision would sometimes require a lengthy quotation, or considerable further explanation, many provisions of the Act, or secondary legislation made under the Act, are summarised. For the precise details of the legislation, readers of the manual should, therefore, refer to the Act and the secondary legislation itself, as well as the manual.

  3. (3)

    The Act and the secondary legislation made under it can be obtained from HMSO at http://www.legislation.hmso.gov.uk/legislation/uk.htm or can be accessed through the Treasury's website (www.hm-treasury.gov.uk).

PERG 1.2.3 G

PERG uses words and phrases that have specific meanings in the Handbook or in legislation; these may be different from, or more precise than, their usual dictionary meanings. Defined terms used in the text of the Handbook are shown in italics (see Chapter 7 of the Reader's Guide to the Handbook at http://www.fca.org.uk/your-fca/documents/handbook/handbook-readers-guide). For the meanings of defined terms used in PERG, see the Glossary. It is essential that readers refer to these definitions. In the case of those parts of PERG which take the form of Q&A, however, to ensure greater accessibility of the text we have only italicised Handbook terms in those places where we think that it would be helpful to the majority of readers.1

PERG 1.2.3A G

2Except in PERG 2 and PERG 7, where PERG uses the defined term of advising on investments, this term refers only to the regulated activity (in article 53(1) of the Regulated Activities Order) of advising on investments (except P2P agreements) and related text should be read and construed accordingly.

PERG 1.2.4 G

PERG 1.4.1 G (General guidance to be found in PERG) summarises the general guidance contained in PERG. Readers should note that in a cross-reference, as explained in paragraph 40 of the Readers' Guide, the code letters of the manual or sourcebook immediately precede the chapter number. For example, PERG 1 is the first chapter of the Perimeter Guidance manual. PERG 1.5 provides details of and links to other general guidance on perimeter issues that is available on the FCA website.

PERG 1.3 Status of guidance

PERG 1.3.1 G

This guidance is issued under section 139A of the Act (Guidance). It represents the FCA's views and does not bind the courts. For example, it would not bind the courts in an action for damages brought by a private person for breach of a rule (see section 138D of the Act (Actions for damages)), or in relation to the enforceability of a contract where there has been a breach of sections 19 (The general prohibition) or 21 (Restrictions on financial promotion) of the Act (see sections 26 to 30 of the Act (Enforceability of agreements)). Although the guidance does not bind the courts, it may be of persuasive effect for a court considering whether it would be just and equitable to allow a contract to be enforced (see sections 28(3) and 30(4) of the Act). Anyone reading this guidance should refer to the Act and to the relevant secondary legislation to find out the precise scope and effect of any particular provision referred to in the guidance and any reader should consider seeking legal advice if doubt remains. If a person acts in line with the guidance in the circumstances mentioned by it, the FCA will proceed on the footing that the person has complied with the aspects of the requirement to which the guidance relates.

PERG 1.4 General guidance to be found in PERG

PERG 1.4.1 G

PERG 1.4.2 G has a table setting out the general guidance to be found in PERG.

PERG 1.4.2 G

Table: list of general guidance to be found in PERG.

Chapter:

Applicable to:

About:

PERG 2 :

Authorisation and regulated activities

PERG 3A :8

Guidance on the scope of the Electronic Money Regulations8

8 8

a person who needs to know

PERG 4 :

Regulated activities connected with mortgages

any person who needs to know whether the activities he conducts in relation to mortgages are subject to FCA regulation. This is likely to include:

  • lenders
  • administration service providers
  • mortgage brokers and advisers

the scope of relevant orders (in particular, the Regulated Activities Order) as respects activities concerned with mortgages

PERG 5 :

Insurance mediation activities

any person who needs to know whether he carries on insurance mediation activities and is, thereby, subject to FCA regulation. This is likely to include:

the scope of relevant orders (in particular, the Regulated Activities Order) as respects activities concerned with the sale or administration of insurance

PERG 6 :

Identification of contracts of insurance

any person who needs to know whether a contract with which he is involved is a contract of insurance

the general principles and range of specific factors that the FCA regards as relevant in deciding whether any arrangement is a contract of insurance

PERG 7 :

Periodical publications, news services and broadcasts: application for certification

any person who needs to know whether he will be regulated for providing advice about investments through the medium of a periodical publication, a broadcast or a news service

PERG 8 :

Financial promotion and related activities

any person who needs to know

PERG 9 :

Meaning of open-ended investment company

any person who needs to know whether a body corporate is an open-ended investment company as defined in section 236 of the Act (Open-ended investment companies) and is therefore a collective investment scheme.

the circumstances in which a body corporate will be an open-ended investment company

PERG 10 :

Activities related to pension schemes

Any person who needs to know whether his activities in relation to pension schemes will amount to regulated activities or whether the restriction in section 21 of the Act will apply to any financial promotions he may make.1

1

  • the regulated activities that arise in connection with the establishment and operation of pension schemes and any exclusions that may be relevant
  • the circumstances in which financial promotions about pension schemes may be exempt from the restriction in section 21 of the Act1

4 PERG 11 :

Property investment clubs and land investment schemes

Any person who needs to know whether his activities in relation to property investment clubs and land investment schemes will amount to regulated activities or whether the restriction in section 21 of the Act will apply to any financial promotions he may make.

  • the regulated activities that may arise in connection with the establishment and operation of property investment clubs and land investment schemes and any exclusions that may be relevant
  • the extent to which the financial promotion restriction in section 21 of the Act applies

2 PERG 12 :

Running or advising on personal pension schemes

any person who needs to know whether his activities in relation to establishing, running, advising on or marketing personal pension schemes will amount to regulated activities

the regulated activities that arise in connection with establishing, running, advising on or marketing personal pension schemes and any exclusions that may be relevant

3 PERG 13 :

Guidance on the scope of MiFID and CRD IV12

9 12 5

Any UKperson who needs to know whether MiFID or the CRD and EUCRR (which allow the recast CAD to continue to apply to certain firms)9as implemented in the UK apply to him5

9

the scope of MiFID and the CRD and EUCRR.5

9

3 PERG 14 :

Home reversion,7 home finance and regulated sale and rent back 7activities

7

Any person who needs to know whether his activities in relation to home reversion plans,7home purchase plans or regulated sale and rent back agreements7will amount to regulated activities or whether the restriction in section 21 of the Act will apply to any financial promotions he may make.

7

6 PERG 15 : Guidance on the scope of the Payment Services Regulations 2009

Any person with an establishment in the UK who needs to know whether the Payment Services Directive, as transposed in UK legislation by the Payment Services Regulations 2009, applies to him.

Q46 applies specifically to persons providing payment services from an establishment outside the EEA to persons located in the UK.

the scope of the PSD Regulations 2009.11

11 PERG 16 : Scope of the Alternative Investment Fund Managers Directive

any person who needs to know whether a collective investment undertaking is an AIF.

the scope of the regulated activities of managing an AIF and acting as trustee or depositary of an AIF.10

10 PERG 17 : Consumer credit debt counselling

Any person who needs to know whether his activities in relation to debts will amount to debt counselling.

The scope of the regulated activities relating to consumer credit debt counselling.

PERG 1.5 What other guidance about the perimeter is available from the FCA?

PERG 1.5.1 G

General guidance on the perimeter is also contained in various FCA documents (mainly fact sheets and frequently asked questions) that are available on the FCA website at www.fca.org.uk.These documents, and the URL on which they may be accessed, include:

  1. (1)

    [deleted] 6

    12446
  2. (2)

    [deleted] 2

    12
  3. (3)

    [deleted]

  4. (4)

    [deleted] 3

    13
  5. (5)

    [deleted] 3

    13
  6. (6)

    [deleted] 3

    13
  7. (7)

    guidance about the position under the Insurance Mediation Directive and the Regulated Activities Order of the company appointed to manage a PPP or similar construction and operation project - http://www.fca.org.uk/your-fca/documents/fsa-ppp-forum-letter;

  8. (8)

    guidance about the position under the Insurance Mediation Directive and the Regulated Activities Order of property managing agents - www.fca.org.uk/firms/insurers-insurance-intermediaries;

    135
  9. (9)

    guidance for employers about how to provide advice and information to their employees on pension matters without contravening the Act - http://www.fca.org.uk/your-fca/documents/fsa-promoting-pensions-employees; 5

    5
  10. (10)

    FCA “Factsheet for Broker-arranged premium finance plans: General insurance brokers acting for commercial customers” which includes, discussion about whether arranging premium finance is a regulated activity (https://www.fca.org.uk/firms/general-insurance-brokers-commercial-customers); 5

  11. (11)

    joint guidance by the FSA and the Office of Fair Trading titled “Payment protection products” (January 2013) which includes discussion whether debt freezes and debt waivers are contracts of insurance ( www.fca.org.uk/your-fca/documents/finalised-guidance/fsa-fg132); and 5

  12. (12)

    the FSA's views on whether members of the NHBC who provide insurance to buyers of properties in accordance with the Buildmark scheme carry out insurance mediation, contained in a letter to NHBC’s solicitors and put onto the FSA's Freedom of Information Act register in December 2012 ( www.fca.org.uk/your-fca/documents/fsa-foi2707-request-information). 5

PERG 1.5.2 G

Any person who, having read relevant general guidance and, where appropriate, taken legal advice, remains uncertain about whether his activities amount to regulated activities or his communications will be subject to the restriction in section 21 of the Act, may seek individual guidance from the FCA. Requests for individual guidance should be made in line with SUP 9.

PERG 1.5.3 G

In addition, the FCA has established a team to provide general assistance and guidance to persons generally about the scope of the Act. Enquiries of this kind may be made:

  1. (1)

    by authorised firms, to either the Contact Centre (email firm.queries@fca.org.uk, Tel 0300 500 0597 7) or their normal supervisory contact; or

    77
  2. (2)

    by individuals or non-authorised firms, to the Consumer Contact Centre (email ccc@fca.org.uk, Tel 0800 111 6768 ). 8

PERG 1.5.4 G

The FCA will review its general guidance from time to time and may need to amend or withdraw published or written guidance in the light of changing circumstances, developing business practices, or case law. For the status of guidance issued by the FCA, see PERG 1.3.1 G.