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

REC 4.1 Application and purpose

Application

REC 4.1.1GRP

REC 4.2, REC 4.3 and REC 4.5 apply to UK recognised bodies. REC 4.4 and REC 4.6 to REC 4.8 apply to all recognised bodies. REC 4.8 applies to applicants for recognition as a recognised body.

Purpose

REC 4.1.2GRP

This chapter sets out the FSA's approach to the supervision of recognised bodies and contains guidance on:

  1. (1)

    the arrangements for investigating complaints about recognised bodies made under section 299 of the Act (Complaints about recognised bodies) (REC 4.4);

  2. (2)

    the FSA's approach to the exercise of its powers under:

    1. (a)

      section 296 of the Act (FSA's power to give directions) to give directions to recognised bodies (REC 4.6);

    2. (b)

      section 297 of the Act (Revoking recognition) to revoke recognition orders (REC 4.7);

    and the procedure to be followed in those cases and where the FSA decides to refuse an application for recognition as a recognised body (REC 4.8); and

  3. (3)

    the FSA's approach to, and procedures for, the exercise of its powers under sections 166 and 167 of the Companies Act 1989 to give directions to UK recognised bodies in relation to action under their default rules (REC 4.5).

REC 4.1.3GRP

The FSA's general approach to supervision is intended to ensure that:

  1. (1)

    the FSA has sufficient assurance that recognised bodies continue at all times to satisfy the recognition requirements and other obligations imposed by or under the Act and UK RIEs continue at all times to satisfy the MiFID implementing requirements1; and

  2. (2)

    the FSA's supervisory resources are allocated, and supervisory effort is applied, in ways which reflect the actual risks to the regulatory objectives.

REC 4.1.4GRP

In applying these principles of risk based supervision to the supervision of recognised bodies, the FSA has had particular regard to the special position of recognised bodies under the Act as well as to its general duties set out in section 2 of the Act (The FSA'sgeneral duties).

REC 4.1.5GRP

More information on the supervision of UK recognised bodies is given in REC 4.2 and REC 4.3. More information on the supervision of overseas recognised bodies is given in REC 6.