SUP 3.1 Application
This chapter applies to:
-
(1)
every firm within a category listed in column (1) of the table in SUP 3.1.2 R; and
-
(2)
the external auditor of such a firm (if appointed under SUP 3.3 or appointed under or as a result of a statutory provision other than in the Act);
in accordance with column (2) or (3) of that table, except as described in the remainder of this section.2
9For the avoidance of doubt, this chapter does not apply to the following firms if they do not hold client money or client assets and do not appoint an auditor under or as a result of a statutory provision other than in the Act:
- (1)
-
(2)
energy market participants, including oil market participants to whom IPRU(INV) 3 does not apply;
- (3)
-
(4)
insurance intermediaries not subject to SUP 3.1.2 R(10);
- (5)
-
(6)
home finance administrators;10
10 -
(7)
home finance intermediaries;10
10 - (8) 10
-
(9)
personal investment firms, including small personal investment firms;
- (10)
- (11)
Applicable sections (see SUP 3.1.1 R)
This table and the provisions in SUP 3 should be read in conjunction with GEN 2.2.23 R to GEN 2.2.25 G. In particular, the PRA does not apply any of the provisions in SUP 3 in respect of FCA-authorised persons. SUP 3.10 and SUP 3.11 are applied by the FCA only.41 |
(1) Category of firm |
(2) Sections applicable to the firm |
(3) Sections applicable to its auditor |
|
(1) |
Authorised professional firm which is required by IPRU(INV) 2.1.2R to comply with chapters 3, 519 or 13 of IPRU(INV) and which has an auditor appointed under or as a result of a statutory provision other than in the Act9 (Notes 1 and 6)23 23 19 23 23 |
SUP 3.1 , SUP 3.2, SUP 3.8,19SUP 3.10 19 |
|
(2) |
Authorised professional firm not within (1) to which the custody chapter or client money chapter applies22 17 22 23 |
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(3) |
Authorised professional firm not within (1) or (2) which has an auditor appointed under or as a result of a statutory provision other than in the Act |
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(4) |
Bank, building society or dormant account fund operator21which in each case carries on designated investment business21(Notes 2A and 6)23 23 |
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(5) |
Bank, building society or a dormant account fund operator which in each case does not carry on designated investment business21 (Note 2A) 21 |
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(5A) |
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(6) |
Insurer, the Society of Lloyd's, underwriting agent or members' adviser, UK ISPV11 (Note 5)7 |
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(7) |
Investment management firm, (other than an exempt CAD firm),16personal investment firm (other than a small personal investment firm or exempt CAD firm) 15or securities and futures firm (other than an exempt CAD firm or an exempt BIPRU commodities firm20)15 which, in each case, has an auditor appointed under or as a result of a statutory provision other than in the Act9(Notes 3 and 623)17 23 9 17 23 |
SUP 3.1 , SUP 3.2, SUP 3.8,19SUP 3.10 19 |
|
9 (7A) |
Investment management firm (other than an exempt CAD firm)20, personal investment firm (other than a small personal investment firm or exempt CAD firm15) or securities and futures firm (other than an exempt CAD firm15 or an exempt BIPRU commodities firm20) not within (7) to which the custody chapter or client money chapter applies22 23 17 22 |
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25 (7AA) |
A firm that has exercised an opt in to CASS in accordance with CASS 1.4.9 R |
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9 (7B) |
UCITS firm 13 (Note 6)23 13 |
SUP 3.1 , SUP 3.2, SUP 3.8,19SUP 3.10 19 |
|
13 (7C) |
UK MiFID investment firm, which has an auditor appointed under or as a result of a statutory provision other than in the Act (Notes 3B and 6)2320 20 23 |
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17 (7D) |
Sole trader or partnership that is a UK20MiFID investment firm (other than an exempt CAD firm) (Notes 3C and 6)2320 20 23 |
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(8) |
Small personal investment firm or service company which, in either case, has an auditor appointed under or as a result of a statutory provision other than in the Act |
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(9) 8 |
Home finance provider 10 which has an auditor appointed under or as a result of a statutory provision other than in the Act9 10 |
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(10) 8 |
Insurance intermediary (other than an exempt insurance intermediary) to which the insurance client money chapter17 (except for CASS 5.2 (Holding money as agent)) applies (see Note 4)8 17 |
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(11) 8 |
Exempt insurance intermediary and insurance intermediary not subject to SUP 3.1.2 R(10) which has an auditor appointed under or as a result of a statutory provision other than in the Act |
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(12) 8 |
Home finance intermediary 10 or home finance administrator10 which has an auditor appointed under or as a result of a statutory provision other than in the Act. 10 10 |
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Note 1 = This chapter applies to an authorised professional firm in row (1) (and its auditor) as if the firm were of the relevant type in the right-hand column of IPRU(INV) 2.1.4R. |
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Note 2 [deleted]23 17 17 23 |
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Note 2A = For this purpose, designated investment business does not include either or both: (a) dealing which falls within the exclusion in article 15 of the Regulated Activities Order (Absence of holding out etc) (or agreeing to do so); and (b) dealing in investments as principal (or agreeing to do so): (i) by a firm whose permission to deal in investments as principal is subject to a limitation to the effect that the firm, in carrying on this regulated activity, is limited to entering into transactions in a manner which, if the firm was an unauthorised person, would come within article 16 of the Regulated Activities Order (Dealing in contractually based investments); and (ii) in a manner which comes within that limitation; having regard to article 4(4) of the Regulated Activities Order (Specified activities: general23). 18 |
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Note 3 = This note applies in relation to an oil market participant to which IPRU(INV) 3 does not apply and in relation to an energy market participant to which IPRU(INV) 3 does not apply. In SUP 3: (a) only SUP 3.1, SUP 3.2 and SUP 3.7 are applicable to such a firm; and (b) only SUP 3.1, SUP 3.2 and SUP 3.8 are applicable to its auditor; and, in each case, only if it has an auditor appointed under or as a result of a statutory provision other than in the Act. |
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23 | |||
20Note 3B = UK MiFID investment firms include exempt CAD firms. An exempt CAD firm that has opted into MiFID can benefit from the audit exemption for small companies in the Companies Act legislation if it meets the relevant criteria in that legislation and fulfils the conditions of regulation 4C(3) of the Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2007. If a firm does so benefit then SUP 3 will not apply to it. For further details about exempt CAD firms, see PERG 13, Q58. |
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17Note 3C20 = A sole trader or a partnership that is a UK MiFID investment firm20 to which the custody chapter22 or client money chapter applies2220 must have its annual accounts audited. 20 20 22 22 |
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Note 4 = The client money audit requirement in SUP 3.1.2 R(10) therefore applies to all insurance intermediaries except:8 • those which do not hold client money or other client assets in relation to insurance mediation activities; or 8 • those which only hold up to, but not exceeding, £30,000 of client money under a statutory trust arising under CASS 5.3.8 Insurance intermediaries which, in relation to insurance mediation activities, hold no more than that amount of client money only on a statutory trust are exempt insurance intermediaries.8 |
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Note (5) = In row (6):7 |
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(a) 7 |
SUP 3.1 - SUP 3.7 applies to a managing agent in respect of its own business and in respect of the insurance business of each syndicate which it manages; and7 |
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(b) 7 |
SUP 3.1 , SUP 3.2 and SUP 3.8 apply to the auditors of a managing agent and the auditors of the insurance business of each syndicate which the managing agent manages.1234567 |
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23Note 6 = Where SUP 3.11 applies to a firm, and SUP 3.10 applies to the auditor of that firm, those sections apply whether or not that firm'spermission prevents it from holding client money or custody assets and whether or not it holds client money or custody assets. |
8If a firm falls within more than one row in column (1) of the table in SUP 3.1.2 R, SUP 3.1.1 R requires the firm and its external auditor to comply with all the sections referred to in column (2) or (3).
41Incoming firms
This chapter applies17to an incoming EEA firm (and the auditor of such a firm) only if it has a17top-up permission.
17 17 17The application of SUP 3.10 to the auditor of an incoming EEA firm with a top-up permission is qualified in SUP 3.10.3 R.
This chapter does not apply to an incoming Treaty firm, which:
-
(1)
does not have a top-up permission; and
-
(2)
is not required to comply with the client asset rules.
The application of SUP 3.7 to an incoming Treaty firm or an auditor of such a firm is further qualified in SUP 3.7.1 G.
19 19Auditors of lead regulated firms
The application of SUP 3.10 to the auditor of a lead regulated firm is qualified in SUP 3.10.3 R.
19 19Material elsewhere in the Handbook
A firm which is a friendly society or other insurer, investment management firm, personal investment firm or a 13securities and futures firm,7 should see the Prudential Standards part of the Handbook13 for further provisions on auditors as set out in SUP 3.1.10 G. For the categorisations employed in SUP 3.1.2 R and SUP 3.1.10 G see SUP App 1.
13 13 7 13 7 13 13 13 13Other relevant sections of the Handbook (see SUP 3.1.9 G)
Insurer (other than a friendly society) |
|
Investment management firm, personal investment firm, securities and futures firm (other than BIPRU investment firms)13 12 |
|
(UPRU) |
|
Society of Lloyd's and Lloyd's managing agents7 |
13 |