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

SUP 13A.3 Qualifications for authorisation under the Act

EEA firms

SUP 13A.3.1GRP

Section 31 of the Act (Authorised persons) states that an EEA firm is authorised for the purposes of the Act if it qualifies for authorisation under Schedule 3 to the Act (EEA Passport Rights). Under paragraph 12 of Part II of that Schedule, an EEA firm that is an EEA pure reinsurer 5qualifies for authorisation without condition. AnEEA firm that is not an EEA pure reinsurer qualifies for authorisation5 if:

  1. (1)

    it is seeking to establish a branch in the United Kingdom in exercise of an EEA right and satisfies the establishment conditions (see SUP 13A.4.1 G and SUP 13A.4.2 G); or

  2. (2)

    it is seeking to provide cross border services into the United Kingdom in exercise of an EEA right and satisfies the service conditions (see SUP 13A.5.3 G).

SUP 13A.3.1AGRP

3If an EEA MiFID investment firm seeks to use a tied agent established in the UK, the EEA MiFID investment firm will be treated as if it were seeking to establish a branch and must satisfy the establishment conditions (see SUP 13A.4.1 G).

SUP 13A.3.1BG

5A pure reinsurer with its head office in an EEA State that has not fully implemented the Reinsurance Directive may nevertheless be accepted as satisfying the conditions to be an EEA pure reinsurer if the firm provides satisfactory evidence that the prudential requirements of the Reinsurance Directive have been implemented by that EEA State and that they apply to the firm. The firm may then be deemed to be authorised under the Reinsurance Directive in that EEA State.

SUP 13A.3.2GRP
  1. (1)

    On qualifying for authorisation, subject to SUP 13A.3.2G (2), an EEA firm will have permission to carry on each permitted activity (see (3) below) which is a regulated activity.

  2. (2)
    1. (a)

      Paragraph (1) does not apply to the activity of dealing in units in a collective investment scheme in the United Kingdom where:

      1. (i)

        the firm is an EEA UCITS management company;

      2. (ii)

        the firm satisfies the establishment conditions in SUP 13A.4.1 G; and

      3. (iii)

        the FSA notifies the EEA firm and the EEA firm's Home State regulator that the way in which it intends to market a relevant scheme in the United Kingdom does not comply with the law in force in the United Kingdom.

    2. (b)

      The FSA's notice under (2)(a)(iii) has to be given to the EEA firm within two months of receiving the consent notice (see paragraph 13(1) of Part II of Schedule 3 to the Act) and will be similar to a warning notice.

    3. (c)

      For details of the FSA's procedures for the giving of warning notices see DEPP 2 (Statutory notices and allocation of decision making).1

  3. (3)

    The permitted activities of an EEA firm are those activities identified in the consent notice, regulator's notice or notice of intention. Permitted activities may include activities that are within the scope of a Single Market Directive but which are unregulated activities in the United Kingdom.

  4. (4)

    The permission will be treated as being on terms equivalent to those appearing in the consent notice, regulator's notice or notice of intention. For example, it will reflect any limitations or requirements which are included in the firm's Home State authorisation.

SUP 13A.3.3GRP

An EEA firm which has qualified for authorisation is referred to in the Handbook as an incoming EEA firm.

Treaty firms

SUP 13A.3.4GRP

Under section 31 of the Act, a Treaty firm is authorised for the purposes of the Act if it qualifies for authorisation under Schedule 4 (Treaty Rights), that is:

  1. (1)

    the Treaty firm is seeking to carry on a regulated activity; and

  2. (2)

    the conditions set out in paragraph 3(1) of Schedule 4 to the Act are satisfied.

SUP 13A.3.5GRP

On qualifying for authorisation a Treaty firm will have permission to carry on each permitted activity which is a regulated activity. This permission will be treated on the same terms as those which apply to the Treaty firm's Home State authorisation. For example, it will reflect any limitations or requirements which are included in the firm's Home State authorisation.

SUP 13A.3.6GRP

The effect of paragraph 5(1) and 5(2) of Schedule 4 to the Act is that a Treaty firm which qualifies for authorisation under that Schedule must, at least seven days before it carries on any of the regulated activities covered by its permission, give the FSA written notice of its intention to do so. Failure to do so is a criminal offence under paragraph 6(1) of that Schedule.

SUP 13A.3.7DRP
  1. (1)

    A written notice from a Treaty firm under paragraph 5(2) of Schedule 4 to the Act must be:

    1. (a)

      given to a member of, or addressed for the attention of , the Authorisation Department; and

    2. (b)

      delivered to the FSA by one of the methods in (2).

  2. (2)

    The written notice may be delivered by:

    1. (a)

      post to the address in SUP 13A.3.9 G below; or

    2. (b)

      leaving the application at the address in SUP 13A.3.9 G below and obtaining a time-stamped receipt; or

    3. (c)

      hand delivery to a member of the Authorisation Department.

SUP 13A.3.8GRP

The written notice required by paragraph 5(2) of Schedule 4 to the Act should be accompanied by confirmation of the Treaty firm's authorisation from the Home State regulator, as referred to in paragraph 3(2) of Schedule 4 to the Act.

SUP 13A.3.9GRP
  1. (1)

    For further information, a Treaty firm may contact the Authorisation Department:

    1. (a)

      telephone on +4420 7066 3954; or

    2. (b)

      write to: Authorisation Department, The Financial Services Authority, 25 The North Colonnade, Canary Wharf, London, E14 5HS; or

    3. (c)

      email corporate.authorisation@fsa.gov.uk.

SUP 13A.3.10GRP
  1. (1)

    The guidance in PERG 2 is relevant to Treaty firms to help them determine if they require authorisation under the Act.

  2. (2)

    A Treaty firm which qualifies for authorisation is referred to in the Handbook as an incoming Treaty firm.

SUP 13A.3.11G
  1. (1)

    An EEA firm that is carrying on both direct insurance and reinsurance5 business will be entitled to passport under Schedule 3 to the Act in relation to the direct insurance business. It will also have a Treaty right under Schedule 4 to the Act in relation to the reinsurance business if the firm has received Home State authorisation for the regulated activity of effecting and/or carrying out the relevant class of insurance business that includes reinsurance business for that class and the relevant provisions of the law of the Home State satisfy the conditions laid down by the Insurance Directives relating to the carrying on of that activity (see SUP App 3.10.13 G). 5

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  2. (1A)

    5An insurance company with its head office in an EEA State other than the United Kingdom that is carrying on pure reinsurance business in that State, and which has received authorisation (or is deemed to be authorised) under the Reinsurance Directive from its Home State (an EEA pure reinsurer), has an automatic EEA right to passport into the United Kingdom by establishing a branch in the United Kingdom or by the provision of cross border services. Under the General Protocol, Home State regulators have agreed to inform Host State regulators if a pure reinsurer carries on business through a branch in the Host State.

  3. (2)

    An insurance company with its head office in an EEA State other than the United Kingdom that is carrying on pure reinsurance 5business in that State, and which wishes to carry on such business in the United Kingdom and is authorised by its Home State but not yet under the Reinsurance Directive,5 is advised to discuss its particular requirements with the Authorisation Department. It may be entitled to exercise a Treaty right provided it satisfies the conditions in paragraph 3(1) of Schedule 4 to the Act (see SUP 13A.3.4 G). Otherwise, it will have to seek a Part IV permission (see the FSA website "How do I get authorised": http://www.fsa.gov.uk/Pages/Doing/how/index.shtml2).

    52

UCITS qualifiers

SUP 13A.3.12GRP

Under Schedule 5 to the Act (Persons concerned in collective investment schemes), a person who for the time being is an operator, trustee or depositary of a scheme which is a recognised scheme under section 264 of the Act is an authorised person. Such a person is referred to in the Handbook as a UCITS qualifier.

SUP 13A.3.13GRP

A UCITS qualifier has permission under paragraph 2 of Schedule 5 to the Act, to carry on, as far as is appropriate to the capacity in which it acts in relation to the scheme:

  1. (1)

    the regulated activity of establishing, operating or winding up a collective investment scheme; and

  2. (2)

    any activity in connection with, or for the purposes of, the scheme.

SUP 13A.3.14GRP

A UCITS qualifier should refer to COLLG or to the following sections of COLL and CIS for requirements for recognised schemes:

  1. (1)

    COLL 9.2.1 G and CIS 16.1.8 G for guidance on notifications;

  2. (2)

    COLL 9.2.1 G and CIS 17.2 for guidance on information and documentation requirements; and

  3. (3)

    COLL 9.4 and CIS 17.4 which includes guidance on what facilities need to be maintained.