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

REC 2.7 Access to facilities

REC 2.7.1UKRP

Schedule to the Recognition Requirements Regulations, Paragraph 4(2)(a)

Without prejudice to the generality of sub-paragraph [4(1)], the [UK RIE] must ensure that -

access to the [UK RIE's ]facilitiesis subject to criteria designed to protect the orderly functioning of the market and the interests of investors;1

REC 2.7.2UK

Schedule to the Recognition Requirements Regulations, Paragraph 19(2)(a)

Without prejudice to the generality of sub-paragraph [19(1)], the [UK RCH] must ensure that -

access to the [UK RCH's ] facilities is subject to criteria designed to protect the orderly functioning of those facilities and the interests of investors;1

REC 2.7.3GRP

In assessing whether access to a UK recognised body's facilities is subject to criteria designed to protect the orderly functioning of the market, or of those facilities, and the interests of investors, the FSA may have regard to whether:

  1. (1)

    the UK recognised body limits access as a member to persons:

    1. (a)

      over whom it can with reasonable certainty enforce its rules contractually;

    2. (b)

      who have sufficient technical competence to use its facilities;

    3. (c)

      whom it is appropriate to admit to membership having regard to the size and sophistication of users of its facilities and the nature of the business effected by means of, or cleared through, its facilities; and

    4. (d)

      (if appropriate) who have adequate financial resources in relation to their exposure to the UK recognised body or its central counterparty;

  2. (2)

    the UK recognised body's membership criteria are objective and are applied in an objective and non-discriminatory manner;

  3. (3)

    indirect access to the UK recognised body'sfacilities is subject to suitable criteria, remains the responsibility of a member of the UK recognised body and is subject to its rules; and

  4. (4)

    where access is granted to members outside the United Kingdom, there are adequate safeguards against financial crime (see also REC 2.10).

Electronic access

REC 2.7.4G

The FSA may have regard to the arrangements made to permit electronic access to the UK recognised body's facilities and to prevent and resolve problems likely to arise from the use of electronic systems to provide indirect access to its facilities by persons other than its members, including:

  1. (1)

    the rules and guidance governing members' procedures, controls and security arrangements for inputting instructions into the system;

  2. (2)

    the rules and guidance governing the facilities members provide to clients to input instructions into the system and the restrictions placed on the use of those systems;

  3. (3)

    the rules and practices to detect, identify, and halt or remove instructions breaching any relevant restrictions;

  4. (4)

    the quality and completeness of the audit trail of any transaction processed through an electronic connection system; and

  5. (5)

    procedures to determine whether to suspend trading by those systems or access to them by or through individual members.