Related provisions for SUP 11.7.1

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PERG 5.1.7GRP
This guidance is issued under section 157of the Act (Guidance). It is designed to throw light on particular aspects of regulatory requirements, not to be an exhaustive description of a person's obligations. If a person acts in line with the guidance and the circumstances contemplated by it, then the FSA will proceed on the footing that the person has complied with aspects of the requirement to which the guidance relates.
PERG 5.1.8GRP
Rights conferred on third parties cannot be affected by guidance given by the FSA. This guidance represents the FSA's view, and does not bind the courts, for example, in relation to the enforceability of a contract where there has been a breach of the general prohibition on carrying on a regulated activity in the United Kingdom without authorisation (see sections 26 to 29 of the Act (Enforceability of Agreements)).
PERG 5.1.9GRP
A person reading this guidance should refer to the Act and the various Orders that are referred to in this guidance. These should be used to find out the precise scope and effect of any particular provision referred to in this guidance. A person may need to seek his own legal advice.
COLL 9.3.1DRP
(1) If the operator of a scheme gives notice to the FSA under section 270 of the Act (Schemes authorised in designated countries or territories) or makes an application under section 272 of the Act (Individually recognised overseas schemes), the notice or application must include the information in paragraph (4). (2) The documents must be in English or accompanied by a translation in English. (3) The documents must be certified by the operator to be true copies of the originals.
COLL 9.3.2RRP
An operator of a scheme recognised under section 272 of the Act must ensure the prospectus:(1) contains a statement that "Complaints about the operation of the scheme may be made to the FSA."; and(2) states whether or not investors in the scheme would be covered by the compensation scheme, and if so, it must state how they are covered and who they would need to contact for further information.
COLL 9.3.3RRP
(1) An operator of a scheme which is a recognised scheme by virtue of section 270 or 272 of the Act must comply, subject to paragraph (2) below, with the requirements set out in COLL 4.2 (Pre-sale notifications). (2) Where a scheme recognised under section 270of the Act is managed and authorised in Guernsey, Jersey, or the Isle of Man, the prospectus need not comply with the requirements of COLL 4.2.5 R (Table: contents of prospectus), providing it contains corresponding matter
SUP 4.3.8GRP
The FSA is concerned to ensure that every actuary appointed by a firm under this section1 has the necessary skill and experience to provide the firm with appropriate actuarial advice. SUP 4.3.9 R to SUP 4.3.10 G set out the FSA's rules and guidance aimed at achieving this.1
SUP 4.3.9RRP
Before a firm applies for approval of the person it proposes to appoint as an actuary under SUP 4.3.1 R1, it must take reasonable steps to ensure that the actuary:1(1) has the required skill and experience to perform his functions under the regulatory system; and(2) is a Fellow of the Institute of Actuaries or of the Faculty of Actuaries.
SUP 4.3.11RRP
A firm must not appoint under SUP 4.3.1 R1 or an actuary who is disqualified by the FSA under section 345 of the Act (Disqualification) from acting as an actuary either for that firm or for a relevant class of firm. 1
SUP 4.3.12GRP
If it appears to the FSA that an actuary1 has failed to comply with a duty imposed on him under the Act, it may disqualify him under section 345 of the Act. For more detail about what happens when the disqualification of an actuary is being considered or put into effect, see ENF 17 (Disqualification of auditors and actuaries)1. A list of actuaries who are disqualified by the FSA may be found on the FSA website (www.fsa.gov.uk).1
SUP 4.3.12ARRP
1A firm must take reasonable steps to ensure that an actuary who is to be, or has been, appointed under SUP 4.3.1 R:(1) does not perform the function of chairman or chief executive of the firm, or does not, if he is to perform the with-profits actuary function, become a member of the firm's governing body; and(2) does not perform any other function on behalf of the firm which could give rise to a significant conflict of interest.
PR 1.1.1RRP
(1) 1PR 2, PR 3, PR 4.2, PR 5.1, PR 5.3.1 UK to PR 5.3.3 G and PR 5.5 only apply (subject to paragraph (2)) in relation to:(a) an offer, or a request for admission to trading of transferable securities, in respect of which section 85 of the Act applies (other than an exempt offer under section 86 of the Act) and in relation to which the United Kingdom is the Home State;(b) an offer, or a request for admission to trading of transferable securities, where under section 87 of the
PR 1.1.6GRP
The following documents need to be considered together todetermine the effect of the prospectus directive:(1) Part 6 of the Act;(2) the PD Regulation;(3) these rules; and(4) the CESR recommendations.
PR 1.1.7GRP
To assist readers, extracts from the Act andthe PD Regulation are reproduced in the text of these rules. Readers should however consult those documents themselves to see the full text.
PR 1.1.8GRP
In determining whether Part 6 of the Act, these rules andthe PD Regulation has been complied with, the FSA will take into account whether a person has complied with the CESR recommendations.
REC 6.3.1GRP
Before making a recognition order, the FSA will need to be satisfied that the recognition requirements in section 292(3) of the Act (Overseas investment exchanges and clearing houses) have been met. These requirements are the only recognition requirements applicable to overseas recognised bodies.
REC 6.3.2UKRP

Sections 292(3) and 292(4) state:

Section 292(3)

The requirements are that-

(a)

investors are afforded protection equivalent to that which they would be afforded if the body concerned were required to comply withrecognition requirements;

(b)

there are adequate procedures for dealing with a person who is unable, or likely to become unable, to meet his obligations in respect of one or more market contracts connected with the [ROIE] or [ROCH];

(c)

the applicant is able and willing to co-operate with the [FSA] by the sharing of information and in other ways; and

(d)

adequate arrangements exist for co-operation between the [FSA] and those responsible for the supervision of the applicant in the country or territory in which the applicant's head office is situated.

Section 292(4)

In considering whether it is satisfied as to the requirements mentioned in subsections (3)(a) and (b), the [FSA] is to have regard to-

(a)

the relevant law and practice of the country or territory in which the applicant's head office is situated;

(b)

the rules and practices of the applicant.1
REC 6.3.3GRP
The reference to recognition requirements in section 292(3)(a) of the Act is a reference to the requirements applicable to UK RIEs or UK RCHs in the Recognition Requirements Regulations. These requirements are set out, together with guidance, in REC 2.
SUP 13.3.1GRP
Guidance on what constitutes a branch is given in SUP App 36.46
SUP 13.3.2GRP
A UK firm cannot establish a branch in another EEA State for the first time under an EEA right unless the conditions in paragraphs 19(2), (4) and (5) of Part III of Schedule 3 to the Act are satisfied. It is an offence for a UK firm which is not an authorised person to contravene this prohibition (paragraph 21 of Part III of Schedule 3 to the Act). These conditions are that:(1) the UKfirm has given the FSA, in accordance with the FSArules (see SUP 13.5.1 R), notice of its intention
SUP 13.3.7GRP
(1) If the FSA proposes to refuse to give a consent notice, then paragraph 19(8) of Part III of Schedule 3 to the Act requires the FSA to give the UK firm a warning notice.(2) If the FSA decides to refuse to give a consent notice, then paragraph 19(12) of Part III of Schedule 3 to the Act requires the FSA to give the UK firm a decision notice within three months of the date on which it received the UK firm's notice of intention(two months in the case of a UK firm which is a UCITS
PERG 8.17.2GRP
Rights under an agreement for qualifying credit are a controlled investment.Qualifying credit is defined in paragraph 10 of Schedule 1 to the Financial Promotion Order (Controlled activities) as credit provided pursuant to an agreement under which:(1) the lender is a person who carries on the regulated activity of entering into a regulated mortgage contract (whether or not he is an authorised or exempt person under the Act); and(2) the obligation of the borrower to repay is secured
PERG 8.17.6GRP
Arranging qualifying credit is a controlled activity under paragraph 10A of Schedule 1 to the Financial Promotion Order; that is, making arrangements:(1) for another person to enter as borrower into an agreement for qualifying credit; or(2) for a borrower under a regulated mortgage contract entered into on or after 31 October 2004 to vary the terms of that contract in such a way as to vary his obligations under that contract.This means that invitations and inducements relating
PERG 8.17.7GRP
Advising on qualifying credit will be a controlled activity under paragraph 10B of Schedule 1 to the Financial Promotion Order; that is, advising a person if the advice is:(1) given to the person in his capacity as a borrower or potential borrower; and(2) advice on the merits of his doing any of the following:(a) entering into an agreement for qualifying credit; or(b) varying the terms of a regulated mortgage contract entered into by him on or after 31 October 2004 in such a way
PERG 8.17.12GRP
Article 28B (Real time communications: introductions in connection with qualifying credit) exempts a real time financial promotion that relates to one or more of the controlled activities about regulated mortgage contracts. The exemption is subject to the following conditions being satisfied:(1) the financial promotion must be made for the purpose of, or with a view to, introducing the recipient to a person ('N') who is:(a) an authorised person who carries on the controlled activity
PERG 8.9.1GRP
Section 21(2) of the Act sets out two circumstances in which a financial promotion will not be caught by the restriction in section 21(1). These are where the communicator is an authorised person or where the content of the financial promotion has been approved for the purposes of section 21 by an authorised person. Where approval is concerned it must be specifically for the purposes of enabling the financial promotion to be communicated by unauthorised persons free of the restriction
PERG 8.9.2GRP
Where an authorised person makes a financial promotion, he is not subject to the restriction in section 21. So, the communication of the financial promotion by the authorised person will not be a criminal offence under the provisions of section 25 of the Act (Contravention of section 21) and any resulting contract will not be unenforceable under section 30 of the Act (Enforceability of agreement resulting from unlawful communications). However,COB 3, ICOB 3 or MCOB 3 may apply
PERG 8.9.3GRP
An unauthorised person may wish to pass on a financial promotion made to him by an authorised person. In this case, the fact that the financial promotion was made to him by an authorised person will not be enough for the restriction in section 21 not to apply to him. The authorised person must also both have approved its content and have done so for the purpose of section 21 of the Act. If an authorised person wishes to ensure that an unauthorised person can communicate a financial
PR 5.3.1UKRP

Sections 87H and 87I of the Act provide:

Prospectus approved in another EEA State

87H

(1)

A prospectus approved by the competent authority of an EEA State other than the United Kingdom is not an approved prospectus for the purposes of section 85 unless that authority has provided the competent authority with –

(a)

a certificate of approval;

(b)

a copy of the prospectus as approved; and

(c)

if requested by the [FSA], a translation of the summary of the prospectus.

(2)

A document is not a certificate of approval unless it states that the prospectus –

(a)

has been drawn up in accordance with the prospectus directive; and

(b)

has been approved, in accordance with that directive, by the competent authority providing the certificate.

(3)

A document is not a certificate of approval unless it states whether (and, if so, why) the competent authority providing it authorised, in accordance with the prospectus directive, the omission from the prospectus of information which would otherwise have been required to be included.

(4)

“Prospectus” includes a supplementary prospectus.

Provision of information to host Member State

87I

(1)

The [FSA] must, if requested to do so, supply the competent authority of a specified EEA State with –

(a)

a certificate of approval;

(b)

a copy of the specified prospectus (as approved by the [FSA]); and

(c)

a translation of the summary of the specified prospectus (if the request states that one has been requested by the other competent authority).

(2)

Only the following may make a request under this section –

(a)

the issuer of the transferable securities to which the specified prospectus relates;

(b)

a person who wishes to offer the transferable securities to which the specified prospectus relates to the public in an EEA State other than (or as well as) the United Kingdom;

(c)

a person requesting the admission of the transferable securities to which the specified prospectus relates to a regulated market situated or operating in an EEA State other than (or as well as) the United Kingdom.

(3)

A certificate of approval must state that the prospectus –

(a)

has been drawn up in accordance with this Part and the prospectus directive; and

(b)

has been approved, in accordance with those provisions, by the [FSA].

(4)

A certificate of approval must state whether (and, if so, why) the [FSA] authorised, in accordance with section 87B, the omission from the prospectus of information which would otherwise have been required to be included.

(5)

The [FSA] must comply with a request under this section –

(a)

if the prospectus has been approved before the request is made, within 3 working days beginning with the date of the request; or

(b)

if the request is submitted with an application for the approval of the prospectus, on the first working day after the date on which it approves the prospectus.

(6)

“Prospectus” includes a supplementary prospectus.

(7)

“Specified” means specified in a request made for the purposes of this section.
PR 5.3.2RRP
(1) This rule applies to a request by a person to the FSA to supply information referred to in section 87I of the Act to the competent authority of a relevant Host State.(2) The request must be in writing and must include:(a) the relevant prospectus as approved (if it has already been approved); and(b) a translation of the summary if required by the competent authority of a relevant host State.
PR 5.3.4GRP
If the FSA receives information referred to in section 87H from another competent authority it will as soon as practicable:(1) inform the issuer, offeror or person requesting admission (as the case may be) that it has received the information; and(2) give notice on the FSA's website that it has received the information.
REC 4.8.1GRP
A decision to: (1) revoke a recognition order under section 297 of the Act (Revoking recognition); or(2) make a direction under section 296 (FSA's powers to give directions); or(3) refuse to make a recognition order under section 290 (Recognition orders);is a serious one and section 298 of the Act (Directions and revocation: procedure) sets out a procedure (see REC 4.8.9 G) which the FSA will follow unless, in the case of a revocation of a recognition order, the recognised body
REC 4.8.3GRP
In considering whether it would be appropriate to exercise the powers under section 296 or section 297 of the Act, the FSA will have regard to all relevant information and factors including:(1) its guidance to recognised bodies;(2) the results of its routine supervision of the body concerned;(3) the extent to which the failure or likely failure to satisfy the recognition requirements or other obligations in or under the Act may affect the regulatory objectives.
REC 4.8.5GRP
The procedures laid down in section 298 of the Act are summarised, with the FSA's guidance about the actions it proposes to take in following these procedures, in the table at REC 4.8.9 G.
REC 4.8.6GRP
Before exercising its powers under section 296 or section 297 of the Act, the FSA will usually discuss its intention, and the basis for this, with the key individuals or other appropriate representatives of the recognised body. It will usually discuss its intention not to make a recognition order with appropriate representatives of the applicant.
PR 2.1.1UKRP

1Sections 87A(2), (3) and (4) of the Act provide for the general contents of a prospectus:

(2)

The necessary information is the information necessary to enable investors to make an informed assessment of –

(a)

the assets and liabilities, financial position, profits and losses, and prospects of the issuer of the transferable securities and of any guarantor; and

(b)

the rights attaching to the transferable securities.

(3)

The necessary information must be presented in a form which is comprehensible and easy to analyse.

(4)

The necessary information must be prepared having regard to the particular nature of the transferable securities and their .
PR 2.1.2UKRP

Sections 87A(5) and (6) of the Act set out the requirement for a summary to be included in a prospectus:

(5)

The prospectus must include a summary (unless the transferable securities in question are ones in relation to which prospectus rules provide that a summary is not required).

(6)

The summary must, briefly and in non-technical language, convey the essential characteristics of, and risks associated with, the issuer, any guarantor and the transferable securities to which the prospectus relates.
PR 2.1.3RRP
In accordance with section 87A(5) of the Act, a summary is not required for a prospectus relating to non-equity transferable securities that have a denomination of at least 50,000 Euros(or an equivalent amount) if the prospectus relates to an admission to trading. [Note: article 5.2 PD]
PR 2.1.7RRP
The summary must also contain a warning to the effect that:(1) it should be read as an introduction to the prospectus;(2) any decision to invest in the transferable securities should be based on consideration of the prospectus as a whole by the investor; (3) where a claim relating to the information contained in a prospectus is brought before a court, the plaintiff investor might, under the national legislation of the EEA States, have to bear the costs of translating the prospectus
FEES 6.1.4GRP
Section 213(3)(b) of the Act requires the FSA to make rules to enable the FSCS to impose levies on authorised persons in order to meet its expenses. These expenses include in particular expenses incurred, or expected to be incurred, in paying compensation, borrowing or insuring risks.
FEES 6.1.8GRP
Within each sub-scheme there are one or more contribution groups These relate to different types of activity carried on by participant firms within each sub-scheme Within a sub-scheme individual participant firms are allocated for funding purposes to one or more contribution groups, depending on their business activities. This meetsa requirement of section 213(5) of the Act that the FSA, in making rules to enable the FSCS to impose levies, must take account of the desirability
FEES 6.1.9GRP
Section 223 of the Act (Management expenses) prevents the FSCS from recovering, through a levy, any management expenses attributable to a particular period in excess of the limit set in COMP as applicable to that period. 'Management expenses' are defined in section 223(3) to mean expenses incurred or expected to be incurred by the FSCS in connection with its functions under the Act, except:(1) expenses incurred in paying compensation; and(2) expenses incurred as a result of the
SUP 15.2.1GRP
A firm is required to provide the FSA with a wide range of information to enable the FSA to meet its responsibilities for monitoring the firm's compliance with requirements imposed by or under the Act. Some of this information is provided through regular reports, including those set out in SUP 16 (Reporting requirements) and SUP 17 (Transaction reporting). In addition, other chapters in the Handbook set out specific notification and reporting requirements. Principle 11 includes
SUP 15.2.2GRP
This chapter sets out:(1) guidance on the type of event or change in condition which a firm should consider notifying in accordance with Principle 11; the purpose of this guidance is to set out examples and not to give comprehensive advice to firms on what they should notify in order to be in compliance with Principle 11;(2) rules on events and changes in condition that a firm must notify; these are the types of event that the FSA must be informed about, usually as soon as possible,
FEES 2.1.5GRP
Paragraph 17 of Schedule 1 and section 99 to the Act enable the FSA to charge fees to cover its costs and expenses in carrying out its functions. The corresponding provisions for the FSCS levy and FOS levies and case fees are set out in FEES 6.1, and FEES 5.2 respectively.
PERG 2.6.17GRP
The specified investment category of units in a collective investment scheme includes units in a unit trust scheme, shares in open-ended investment companies and rights in respect of most limited partnerships. Shares in or securities of an open-ended investment company are treated differently from shares in other companies. They are excluded from the specified investment category of shares. This does not mean that they are not investments but simply that they are uniformly treated
PERG 2.6.18GRP
There are no exclusions in the Regulated Activities Order for this specified investment category. This is because 'collective investment scheme' is defined in section 235 of the Act (Collective investment schemes) for the purposes of the Act generally. But there is a separate power to provide for exemptions from that definition and the Treasury have exercised it (see the Financial Services and Markets Act 2000 (Collective Investment Schemes) Order 2001 (SI 2001/1062). The result
PERG 2.2.1GRP
Under section 23 of the Act (Contravention of the general prohibition), a person commits a criminal offence if he carries on activities in breach of the general prohibition in section 19 of the Act (The general prohibition) (see AUTH 1.2.2 G).. Although a person who commits the criminal offence is subject to a maximum of two years imprisonment and an unlimited fine, it is a defence for a person to show that he took all reasonable precautions and exercised all due diligence to
PERG 2.2.2GRP
Another consequence of a breach of the general prohibition is that certain agreements could be unenforceable (see sections 26 to 29 of the Act). This applies to agreements entered into by persons who are in breach of the general prohibition. It also applies to any agreement entered into by an authorised person if the agreement is made as a result of the activities of a person who is in breach of the general prohibition.
PERG 2.2.3GRP
Any person who is concerned that his proposed activities may require authorisation will need to consider the following questions (these questions are a summary of the issues to be considered and have been reproduced, in slightly fuller form in the decision tree in PERG 2 Annex 1 G):(1) Will I be carrying on my activities by way of business (see PERG 2.3)?(2) Will I be managing the assets of an occupational pension scheme (see PERG 2.3.2G (3))?(3) If the answer is 'Yes' to (1)
SUP 8.2.1GRP
Under section 148of the Act (Modification or waiver of rules), the FSA may, on the application or with the consent of a firm, direct that certain rules (see SUP 8.2.6 G to SUP 8.2.8 G):(1) are not to apply to the firm; or(2) are to apply to the firm with such modifications as may be specified.
SUP 8.2.3GRP
Section 250 of the Act and regulation 7 of the OEIC Regulations allow the FSA to waive the application of certain rules in COLL and CIS to:(1) a person, as respects a particular AUT or ICVC, on the application or with the consent of that person; and(2) an AUT or ICVC on the application or with the consent of the manager and trustee (in the case of an AUT) or the ICVC and its depositary (in the case of an ICVC).2
SUP 8.2.5GRP
Section 250 of the Act and regulation 7 of the OEIC Regulations work by giving effect to section 148of the Act in respect of waivers given under section 250(2) and (3) and regulation 7(1) and (2) of the OEIC Regulations.
REC 6.6.1GRP
An overseas recognised body is required to notify the FSA of certain events and give information to it on a regular basis and when certain specified events occur. Section 295 of the Act (Notification: overseas investment exchanges and overseas clearing houses) requires each overseas recognised body to provide the FSA, the Treasury and the Director General of Fair Trading with a report (at least once a year) which contains:(1) a statement as to whether any events have occurred
REC 6.6.3GRP
The period covered by a report submitted under section 295(1) of the Act starts on the day after the period covered by its last report or, if there is no such report, after the making of the recognition order recognising the overseas recognised body as such, and ends on the date specified in the report or, if no date is specified, on the date of the report.
REC 6.6.5GRP
The period covered by a report submitted under section 295(1) of the Act would most conveniently be one year.
SUP 12.5.1GRP
The Appointed Representative Regulations include, among other things, the prescribed requirements applying to contracts between firms and appointed representatives for the purposes of section 39(1)(a)(ii) of the Act.
SUP 12.5.3GRP
A firm should satisfy itself that the terms of the contract with its appointed representative (including an introducer appointed representative):(1) are designed to enable the firm to comply properly with any limitations or requirements on its own permission;(2) require the appointed representative to cooperate with the FSA as described in SUP 2.3.4 G (Information gathering by the FSA on its own initiative: cooperation by firms) and give access to its premises, as described in
SUP 12.5.5RRP
A firm must ensure that its written contract with each of its appointed representatives:4(1) complies with the requirements prescribed in regulation 3 of the Appointed Representatives Regulations (see SUP 12.5.2 G);4(2) requires the appointed representative to comply, and to ensure that any persons who provide services to the appointed representative under a contract of services or a contract for service comply, with the relevant requirements in or under the Act (including the
SUP 2.2.1GRP
Breaching Principle 11, or the rules in this chapter, makes a firm liable to regulatory sanctions, including discipline under Part XIV of the Act (Disciplinary Measures), and may be relevant to the use of the FSA's other powers, including the statutory information gathering and investigation powers (see further PRIN 1.1.7 G to PRIN 1.1.9 G). But, unlike a breach of a requirement imposed under the statutory powers listed in SUP 2.1.5 G, a breach of Principle 11 or a rule:(1) is
SUP 2.2.3GRP
The FSA would not normally seek to gather information using the methods described in SUP 2.3 or SUP 2.4 in a situation where the FSA could not have obtained it under the powers in Part XI of the Act (Information Gathering and Investigations). In particular, the limitations in the following sections of the Act are relevant to this chapter:(1) section 175(5) (Information and documents: supplementary powers) under which no person may be required under Part XI of the Act (Information
SUP 2.2.4GRP
When the FSA obtains confidential information using the methods of information gathering described in SUP 2.3 or SUP 2.4, it is obliged under Part XXIII of the Act (Public Record, Disclosure of Information and Co-operation) to treat that information as confidential. The FSA will not disclose confidential information without lawful authority, for example if an exception applies under the Financial Services and Markets Act 2000 (Disclosure of Confidential Information) Regulations