Related provisions for PERG 4.10A.20

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PERG 1.4.2GRP

Table: list of general guidance to be found in PERG.

Chapter:

Applicable to:

About:

PERG 2:

Authorisation and regulated activities

PERG 3A:8

Guidance on the scope of the Electronic Money Regulations8

88

a person who needs to know

PERG 4:

Regulated activities connected with mortgages

any person who needs to know whether the activities he conducts in relation to mortgages are subject to FCA regulation. This is likely to include:

  • lenders
  • administration service providers
  • mortgage brokers and advisers

the scope of relevant orders (in particular, the Regulated Activities Order) as respects activities concerned with mortgages

PERG 5:

Insurance

mediation

activities

any person who needs to know whether he carries on insurance mediation activities and is, thereby, subject to FCA regulation. This is likely to include:

the scope of relevant orders (in particular, the Regulated Activities Order) as respects activities concerned with the sale or administration of insurance

PERG 6:

Identification of contracts of insurance

any person who needs to know whether a contract with which he is involved is a contract of insurance

the general principles and range of specific factors that the FCA regards as relevant in deciding whether any arrangement is a contract of insurance

PERG 7:

Periodical publications, news services and broadcasts: application for certification

any person who needs to know whether he will be regulated for providing advice about investments through the medium of a periodical publication, a broadcast or a news service

PERG 8:

Financial promotion and related activities

any person who needs to know

PERG 9:

Meaning of open-ended investment company

any person who needs to know whether a body corporate is an open-ended investment company as defined in section 236 of the Act (Open-ended investment companies) and is therefore a collective investment scheme.

the circumstances in which a body corporate will be an open-ended investment company

PERG 10:

Activities related to pension schemes

Any person who needs to know whether his activities in relation to pension schemes will amount to regulated activities or whether the restriction in section 21 of the Act will apply to any financial promotions he may make.1

1

  • the regulated activities that arise in connection with the establishment and operation of pension schemes and any exclusions that may be relevant
  • the circumstances in which financial promotions about pension schemes may be exempt from the restriction in section 21 of the Act1

4PERG 11:

Property investment clubs and land investment schemes

Any person who needs to know whether his activities in relation to property investment clubs and land investment schemes will amount to regulated activities or whether the restriction in section 21 of the Act will apply to any financial promotions he may make.

  • the regulated activities that may arise in connection with the establishment and operation of property investment clubs and land investment schemes and any exclusions that may be relevant
  • the extent to which the financial promotion restriction in section 21 of the Act applies

2PERG 12:

Running or advising on personal pension schemes

any person who needs to know whether his activities in relation to establishing, running, advising on or marketing personal pension schemes will amount to regulated activities

the regulated activities that arise in connection with establishing, running, advising on or marketing personal pension schemes and any exclusions that may be relevant

3PERG 13:

Guidance on the scope of MiFID and CRD IV12

9125

Any UKperson who needs to know whether MiFID or the CRD and EUCRR (which allow the recast CAD to continue to apply to certain firms)9as implemented in the UK apply to him5

9

the scope of MiFID and the CRD and EUCRR.5

9

3PERG 14:

Home reversion,7 home finance and regulated sale and rent back 7activities

7

Any person who needs to know whether his activities in relation to home reversion plans,7home purchase plans or regulated sale and rent back agreements7will amount to regulated activities or whether the restriction in section 21 of the Act will apply to any financial promotions he may make.

7

6PERG 15: Guidance on the scope of the Payment Services Regulations 2009

Any person with an establishment in the UK who needs to know whether the Payment Services Directive, as transposed in UK legislation by the Payment Services Regulations 2009, applies to him.

Q46 applies specifically to persons providing payment services from an establishment outside the EEA to persons located in the UK.

the scope of the PSD Regulations 2009.11

11PERG 16: Scope of the Alternative Investment Fund Managers Directive

any person who needs to know whether a collective investment undertaking is an AIF.

the scope of the regulated activities of managing an AIF and acting as trustee or depositary of an AIF.10

10PERG 17: Consumer credit debt counselling

Any person who needs to know whether his activities in relation to debts will amount to debt counselling.

The scope of the regulated activities relating to consumer credit debt counselling.

TC App 1.1.1RRP

1Activity

Products/Sectors

Is there an appropriate qualification4requirement?

4

Designated investment business carried on for a retail client

Providing basic advice

1.

Stakeholder products excluding a deposit-based stakeholder product

No

Advising

2.

Securities which are not stakeholder pension schemes, personal pension schemes7 or broker funds

Yes

3.

Derivatives

Yes2

4.

Packaged products6Retail investment products6 which are not broker funds

Yes2

5.

Friendly Societylife policies where the employee is not reasonably expected to receive a remuneration of greater than £1000 a year in respect of such sales

No2

6.

Friendly Society tax-exempt policies (other than Holloway sickness policies where the Holloway policy special application conditions are met)5

Yes2

7.

Long-term care insurance contracts

Yes2

8.

Investments in the course of corporate finance business

Yes2

9.

Advising on syndicate participation at Lloyd's

Yes2

129A.

Advising on P2P agreements

Yes

Undertaking the activity in column 2

10.

Broker fund adviser

Yes

11.

Pension transfer specialist

Yes2

Advising and dealing

12.

Securities which are not stakeholder pension schemes, personal pension schemes7 or broker funds

Yes

13.

Derivatives

Yes2

4Dealing

13A.8

Securities which are not stakeholder pension schemes, personal pension schemes7 or broker funds

No

413B.8

Derivatives

No

8MiFID business bidding

13C.

Emissions auction products that are financial instruments

No

Managing

14.

Investments

Yes

Overseeing on a day-to-day basis

15.

Operating a collective investment scheme or undertaking the activities of a trustee or depositary of a collective investment scheme

Yes

16.

Safeguarding and administering investments or holding client money

Yes2

17.

Administrative functions in relation to managing investments

Yes2

18.

Administrative functions in relation to effecting or carrying out contracts of insurance which are life policies

Yes2

19.

Administrative functions in relation to the operation of stakeholder pension schemes

Yes2

Mortgage Activity10 and reversion activity carried on for a customer

10

910Advising; arranging (bringing about) an execution-only sale, excluding variations to an existing home finance transaction except where the effect is to change all or part of the home finance transaction from one interest rate to another.

See Note 3, which for the avoidance of doubt forms part of this rule.

20

Regulated mortgage contracts for a non-business purpose

Yes

20A

Regulated mortgage contracts for a business purpose

No

21

Equity release transactions

Yes

9Designing scripted questions for execution-only sales

21A

Regulated mortgage contracts for a non-business purpose

Yes

21B

Regulated mortgage contracts for a business purpose

No

22

Equity release transactions

Yes

Overseeing execution-only sales on a day-to-day basis9

9

23.

Equity release transactions

Yes

11MCD credit agreement activities carried on for consumers

11manufacturing

23A

an MCD credit agreement

No

11entering into a regulated mortgage contract or entering into a regulated credit agreement as lender

23B

an MCD credit agreement

No

11arranging (bringing about) regulated mortgage contracts or acting as an MCD credit broker

23C

an MCD credit agreement

No

11advising on a regulated mortgage contract or advising on a regulated credit agreement for the acquisition of land

23D

an MCD credit agreement

No

11directly managing or supervising employees who carry on any of the MCD credit agreement activities 23A to 23D

23E

an MCD credit agreement

No

[Note: article 9(1) of the MCD]11

Non-investment insurance business carried on for a consumer

Advising

24.

Non-investment insurance contracts

No

3Regulated sale and rent back activity carried on for a customer

Advising

25.

Regulated sale and rent back agreements

No

Overseeing an execution-only sale10 on a day-to-day basis

10

26.

Regulated sale and rent back agreements

No

Notes:

1.

In the Appendix the heading and types of business specified in the headings are to be read in conjunction with the paragraphs appearing beneath them.

2.

Thus, for example, paragraph 24consistent with the heading above it3, refers only to advice on non-investment insurance contracts given to a consumer.10

3

122A.

In relation to activity number 9A, see TC 2.1.5HR and TC 2.1.6R(2). There is no qualification for this activity in the list of qualifications set out in TC Appendix 4E. However, the effect of TC 2.1.5HR is that an employeeadvising on P2P agreements must be qualified to the same standard as if that employee were providing investment advice to retail clients on retail investment products.

103.

For the purpose of product numbers 20, 20A and 21 the activity of arranging (bringing about) referred to in the activity column:

(a) includes activity which would be arranging (bringing about) but for the exclusion in article 28A of the Regulated Activities Order; and

(b) does not include activities which taken on their own would not fall within the definition of that activity. For these purposes no account should be taken of the fact that for an activity to be a regulated activity it must be carried on by way of business (see PERG 4.3).

4.

In this Appendix, paragraphs 23A, 23B, 23C, 23D and 23E relate to the implementation of article 9(1) of the MCD. The specified activities do not, in and of themselves, attract a qualification requirement. However, where those activities overlap with those specified under the heading "mortgage activity and reversion activity carried on for a customer", qualification requirements may apply.

SYSC 4 Annex 1GRP

Business areas and management functions

Explanation

(1) Payment services

This means:

(1) payment services;

(2) issuing and administering other means of payment (for example, cheques and bankers' drafts);

(3) issuing electronic money; and

(4) current accounts.

(2) Settlement

This means clearing and settlement of any transactions described in rows (3) and (6) to (9) of this annex, in relation to the assets covered by (9).

It also includes clearing and settlement of any transactions described in row (10).

(3) Investment management

This has the same meaning as managing investments with the following adjustments:

(a) it covers all types of assets; and

(b) the exclusions in the Regulated Activities Order do not apply.

It also covers fund management.

(4) Financial or investment advice

This includes advising on investments.

(5) Mortgage advice

This has the same meaning as advising on regulated mortgage contracts but is expanded to cover land anywhere in the world and to cover security of any kind over land.

(6) Corporate investments

This means acquiring, holding, managing and disposing a firm's investments made for its own account.

(7) Wholesale sales

This means the selling of any investment to a person other than a retail customer.

It does not include the activities in (1).

(8) Retail sales

This means the selling of any investment to a retail customer.

It includes savings accounts. It does not include the activities in (1).

(9) Trading for clients

This means dealing in investments as agent and execution of orders on behalf of clients but the list of products includes money market instruments and foreign exchange.

(10) Market making

This has the same meaning as it does in MIFID (see the definition of market maker in article 4.1(8)).

(11) Investment research

(12) Origination/syndication and underwriting

Origination and syndication include:

(1) entering into or acquiring (directly or indirectly) any commitment or investment with a view to transferring some or all of it to others, or with a view to others investing in the same transaction;

(2) sub-participation; and

(3) any transaction described in the Glossary definition of originator.

Underwriting includes underwriting that is not on a firm commitment basis.

A commitment or investment includes an economic interest in some or all of it.

This activity also includes the provision of services relating to such transactions.

(13) Retail lending decisions

Deciding whether, and on what terms, to lend to retail customers.

Lending includes granting credit, leasing and hire (including finance leasing).

(14) Wholesale lending decisions

Deciding whether, and on what terms, to lend to persons who are not retail customers.

Lending includes granting credit, leasing and hire (including finance leasing).

(15) Design and manufacturing of products intended for wholesale customers

Wholesale customers mean persons who are not retail customers

(16) Design and manufacture of products intended for retail customers

(17) Production and distribution of marketing materials and communications

This includes financial promotions

(18) Customer service

This means dealing with clients after the point of sale, including queries and fulfilment of client requests

(19) Customer complaints handling

This includes the firm's compliance with DISP.

It also includes:

(1) any similar procedures relating to activities that do not come under the jurisdiction of the Financial Ombudsman Service;

(2) activities that take place outside the UK; and

(3) activities that are not subject to any ombudsman service.

(20) Collection and recovering amounts owed to a firm by its customers

Dealing with customers in arrears

‘Customer’ means any person falling into any of the definitions of client in the Glossary so far as they apply to the FCA's Handbook. The definition is extended to cover all services provided by the firm and not just those that are provided in the course of carrying on a regulated activity or an ancillary service.

(21) Middle office

This means risk management and controls in relation to, and accounting for, transactions in securities or derivatives

(22) The firm's information technology

(23) Business continuity planning

This means the functions described in SYSC 4.1.6R and SYSC 4.1.7R

(24) Human resources

This includes recruitment, training and competence and performance monitoring

(25) Incentive schemes for the firm's staff

This is not limited to schemes based on sales.

(26) Providing information in relation to a specified benchmark

(27) Administering a specified benchmark

Note (1): The purpose of this annex is explained in SYSC 4.5 (Management responsibilities maps for UK2 relevant authorised persons) and SYSC 4.7.37G. This annex is also referred to in SYSC 4.6 (Management responsibilities maps for non-UK relevant authorised persons) and SYSC 4.8 (Senior management responsibilities for third-country relevant authorised persons: allocation of responsibilities) (see SYSC 4.6.14 and SYSC 4.8.35).2

Note (2): A firm does not have to use the split of activities in this annex for the purposes in Note (1). If a firm does decide to use it, it may adapt it to suit its management arrangements better.

For example, a firm may find the split of activities into retail and wholesale activities unsuitable. If so, the firm might:

(a) treat retail and wholesale activities together; or

(b) use its own definition of retail and wholesale activities.