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SUP 9.1 Application and purpose

Application

SUP 9.1.1 G
  1. (1)

    This chapter applies to:2

    2
    1. (a)

      every firm;

    2. (b)

      persons that are subject to the requirements of the Part 6 rules; and

    3. (c)

      persons generally.

  2. (2)

    SUP 9.3 (Giving individual guidance to a firm on the FSA's own initiative) is, however, only relevant to a firm.

Purpose

SUP 9.1.2 G RP

Individual guidance is guidance that is not given to persons or regulated persons generally or to a class of regulated person. It will normally be given to one particular person, which relates to its own particular circumstances or plans. It may be oral or written. Individual guidance will not be published but may at the FSA's discretion be converted to general guidance and published in the Handbook. Written individual guidance will often be labelled as such1

SUP 9.1.3 G RP

A person may need to ask the FSA for individual guidance on how the rules and general guidance in the Handbook, the Act or other regulatory requirements apply in their particular circumstances. This chapter describes how a person may do this. Section 157 of the Act gives the FSA the power to give guidance consisting of such information and advice as it considers appropriate.

SUP 9.1.4 G RP

The FSA may at times also consider it appropriate to give a firm individual guidance on its own initiative, for example on how it considers a firm should comply with a rule. SUP 9.3 describes when and how the FSA will seek to do this.

SUP 9.2 Making a request for individual guidance

How to make a request

SUP 9.2.1 G RP

Requests for individual guidance may be made in writing or orally. Requests for individual guidance in relation to the Part 6 rules should be made in writing other than in circumstances of exceptional urgency or in the case of a request from a sponsor in relation to the provision of a sponsor service. 2If oral queries raise complex or significant issues, the FSA will normally expect the details of the request to be confirmed in writing. Simple requests for guidance may often be dealt with orally, although it is open to a person to seek a written confirmation from the FSA of oral guidance given by the FSA.

Who to address a request to

SUP 9.2.2 G RP

A firm and its professional advisers should address requests for individual guidance to the firm's usual supervisory contact at the FSA, with the exception of requests for guidance on the Code of Market Conduct (MAR 1) which should be addressed to the specialist team within the Markets and Exchanges Division. A firm may wish to discuss a request for guidance with the relevant contact before making a written request.

SUP 9.2.3 G RP

A person who is not a firm should address his request for individual guidance to the appropriate department within the FSA. A person who is unsure of where to address his request may address his enquiry to the FSA, making clear the nature of the request.

Discussions on a no-names basis

SUP 9.2.4 G RP

The FSA does not expect to enter into discussions on a 'no-name' basis about the affairs of an individual person.1

1 2
SUP 9.2.4A G

[deleted]2

2

The FSA's response to a reasonable request

SUP 9.2.5 G RP

The FSA will aim to respond quickly and fully to reasonable requests. The FSA will give high priority to enquiries about areas of genuine uncertainty or about difficulties in relating established requirements to innovative practices or products. What constitutes a 'reasonable request' is a matter for the FSA. It will depend on the nature of the request and on the resources of the firm or other person making it. The FSA will expect the person to have taken reasonable steps to research and analyse a topic before approaching the FSA for individual guidance. The FSA should not be viewed as a first port of call for guidance, except where it is only the FSA that can give the guidance, for example in confirming non-standard reports that it wishes to receive from a firm.

Information required by the FSA

SUP 9.2.6 G RP

The FSA will always need sufficient information and time before it can properly evaluate the situation and respond to a request. If a request is time-critical, the person or its professional adviser should make this clear. The more notice a person can give the FSA, the more likely it is that the FSA will be able to meet the person's timetable. However, the time taken to respond will necessarily depend upon the complexity and novelty of the issues involved. In making a request, a person should identify the rule, general guidance, or other matter on which individual guidance is sought, and provide a description of the circumstances relating to the request. The FSA may request further information if it considers that it does not have sufficient information.

SUP 9.3 Giving individual guidance to a firm on the FSA's own initiative

SUP 9.3.1 G RP

Business and internal control risks vary from firm to firm, according to the nature and complexity of the business. The FSA's assessment of these risks is reflected in how its rules apply to different categories of firm as well as in the use of its other regulatory tools. One of the tools the FSA has available is to give a firm individual guidance on the application of the requirements or standards under the regulatory system in the firm's particular circumstances.

SUP 9.3.2 G RP

The FSA may give individual guidance to a firm on its own initiative if it considers it appropriate to do so. For example:

  1. (1)

    the FSA may consider that general guidance in the Handbook does not appropriately fit a firm's particular circumstances (which may be permanent or temporary) and therefore decide to give additional individual guidance to the firm;

  2. (2)

    some of the FSA's requirements are expressed in general terms; however, there may be times when the FSA will wish to respond to a firm's particular circumstances by giving individual guidance on the application of the general requirement in these circumstances;

  3. (3)

    the FSA may consider that a firm should be given more detailed guidance than that contained in the Handbook; for example, where a firm holds positions in instruments of a non-standard form it may be appropriate to give the firm additional or more detailed guidance on how the FSA considers that it should calculate its financial resources requirement;

  4. (4)

    in some instances a rule allows a firm to select which requirement, within a range of alternative requirements, a firm should comply with; in many instances, the Handbook gives guidance setting out the circumstances in which compliance with a particular requirement is appropriate; the FSA may sometimes consider it necessary to give additional individual guidance to tell a firm which requirement it considers appropriate;

  5. (5)

    in relation to the maintenance of adequate financial resources, the FSA may give a firm individual guidance on the amount or type of financial resources the FSA considers appropriate, for example individual capital guidance for BIPRU firms and insurers;2 further guidance on how and when the FSA may give individual capital guidance2 on financial resources is contained in the Prudential Standards part of the Handbook:2

    222
    1. (a)

      for a BIPRU firm: GENPRU 1.2 and BIPRU 2.2;2

      2
    2. (b)

      for an insurer: GENPRU 1.2 and INSPRU 7.1;2

      2
    3. (c)

      for a securities and futures firm (or other firm required to comply with IPRU(INV) 3 ): IPRU(INV) 3-79R3

      3331

      ; and

      1
    4. (d)

      for an insurer: INSPRU 72

      12
SUP 9.3.3 G RP

If the FSA intends to give a firm individual guidance on its own initiative, it will normally seek to discuss the issue with the firm and agree suitable individual guidance.

SUP 9.3.4 G RP

Individual guidance given to a firm on the FSA's own initiative will normally be given in writing.

SUP 9.4 Reliance on individual guidance

Reliance by recipient of individual guidance

SUP 9.4.1 G RP

If a person acts in accordance with current individual written guidance given to him by the FSA in the circumstances contemplated by that guidance, then the FSA will proceed on the footing that the person has complied with the aspects of the rule or other requirement to which the guidance relates.

SUP 9.4.2 G RP

The extent to which a person can rely on individual guidance given to him will depend on many factors. These could include, for example, the degree of formality of the original query and the guidance given, and whether all relevant information was submitted with the request. Individual guidance is usually given in relation to a set of particular circumstances which exist when the guidance is given. If the circumstances later change, for example, because of a change in the circumstances of the person or a change in the underlying rule or other requirement, and the premises upon which individual guidance was given no longer apply, the guidance will cease to be effective.

SUP 9.4.3 G RP

If the circumstances relating to individual guidance change it will be open to a person to ask for further guidance.

Effect on rights of third parties

SUP 9.4.4 G RP

Rights conferred on third parties (such as a firm'sclients) cannot be affected by guidance given by the FSA. Guidance on rules, the Act or other legislation represents the FSA's view, and does not bind the courts, for example in relation to an action for damages brought by a private person for breach of a rule (section 150 of the Act (Actions for damages)) or in relation to enforceability of a contract if the general prohibition is breached (sections 26 and 27 of the Act (Enforceability of agreements)). A person may need to seek his own legal advice.

SUP 9.5 1Disputes as to the interpretation of the Part 6 rules

SUP 9.5.1 G

1Where a person that is subject to any requirement of the Part 6 rules disagrees with the individual guidance given by the FSA, he can request that the guidance be reviewed at a meeting of senior FSA staff.

SUP 9.5.2 G

Upon receiving a request under SUP 9.5.1 G senior FSA staff will review:

  1. (1)

    the initial request for guidance;

  2. (2)

    the individual circumstances of the person seeking the review; and

  3. (3)

    the reasons why the person does not agree with the individual guidance.

SUP 9.5.3 G

The outcome of the senior FSA staff meeting will be communicated to the person.

SUP 9.5.4 G

A person that does not agree with the individual guidance that results from a senior FSA staff meeting, or a third party that is directly affected by that individual guidance may request that the guidance be reviewed by the Listing Authority Review Committee.

SUP 9.5.5 G

The Listing Authority Review Committee has powers, delegated by the FSA Board, to resolve disputes on the application and interpretation of the requirements set out in LR, DTR and PR. A managing director of the FSA sits as chairman of the Listing Authority Review Committee.

SUP 9.5.6 G

The person requesting the review can make representations to the Listing Authority Review Committee either orally or in writing.

SUP 9.5.7 G

All decisions of the Listing Authority Review Committee are final and are determinative of the FSA's opinion as to the interpretation or application of the requirement in question.