Related provisions for PERG 4.1.2
Module |
Relevance to Credit Unions |
The Principles for Businesses (PRIN) |
The Principles for Businesses (PRIN) set out 3high-level requirements 3imposed by the FCA3. They provide a general statement of regulatory requirements. The Principles apply to all12credit unions. In applying the Principles to credit unions, the FCA3 will be mindful of proportionality. In practice, the implications are likely to vary according to the size and complexity 3of the credit union. 1212121212 |
Senior Management Arrangements, Systems and Controls (SYSC) |
SYSC 1,3SYSC 4 to 10 and SYSC 213 apply to all credit unions in respect of the carrying on of their regulated activities and unregulated activities in a prudential context. SYSC 4.5 (Management responsibilities maps for relevant authorised persons), SYSC 4.7 (Senior management responsibilities for relevant authorised persons: allocation of responsibilities), SYSC 4.9 (Handover procedures and material), SYSC 5.2 (Certification regime) and SYSC 18 apply3 to all credit unions in respect of both their regulated activities and their unregulated activities3. |
This contains rules and guidance that are directly applicable to a credit union’sSMF managers, certification employees and (from 2017) other conduct rules staff. There is also guidance for credit unions on giving their staff training about COCON. |
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Threshold Conditions (COND) |
In order to become authorised under the Act all firms must meet the threshold conditions. The threshold conditions must be met on a continuing basis by credit unions. Failure to meet one of the conditions is sufficient grounds for the exercise by the FCA3 of its powers. 121212 |
12312 | |
The Fit and Proper test for Approved Persons (FIT) |
The purpose of FIT is to set out and describe the criteria that a firm should3 consider when assessing the fitness and propriety of a person (1)3 in respect of whom an application is being made for approval to undertake a controlled function under the approved persons regime, (2)3 who has already been approved, (3) who is a certification employee or (4) whom a firm is considering appointing to be a certification employee3. It also sets out and describes criteria that the FCA will consider when assessing the fitness and propriety of a candidate for a controlled function position and that it may consider when assessing the continuing fitness and propriety of approved persons.3 12312 |
General Provisions (GEN) |
GEN contains rules and guidance on general matters, including interpreting the Handbook, statutory status disclosure, the FCA's3 logo and insurance against financial penalties. 12 |
Fees manual (FEES) |
This manual sets out the fees applying to credit unions. |
3Prudential sourcebook for Mortgage and Home Finance Firms, and Insurance Intermediaries (MIPRU) |
MIPRU applies to any credit union carrying out insurance mediation activity or home finance mediation activity, or using these services. In particular, it sets out requirements for allocation of responsibility for the credit union’sinsurance mediation activity (MIPRU 2), for the use of home finance intermediaries (MIPRU 5) and for professional indemnity insurance (MIPRU 3). |
Conduct of Business sourcebook (COBS) |
A credit union which acts as a CTF provider or provides a cash-deposit ISA will need to be aware of the relevant requirements in COBS. COBS 4.6 (Past, simulated past and future performance), COBS 4.7.1 R (Direct offer financial promotions), COBS 4.10 (Systems and controls and approving and communicating financial promotions), COBS 13 (Preparing product information) and COBS 14 (Providing product information to clients) apply with respect to accepting deposits as set out in those provisions, COBS 4.1 and BCOBS. A credit union that communicates with clients, including in a financial promotion, in relation to the promotion of deferred shares and credit union subordinated debt will need to be aware of the requirements of COBS 4.2 (Fair, clear and not misleading communications) and COBS 4.5 (Communicating with retail clients).4 |
ICOBS applies to any credit union carrying on non-investment insurance activities, such as arranging or advising on general insurance contracts to be taken out by members. But ICOBS does not apply to a credit union taking out an insurance policy for itself, such as a policy against default by members on their loans where the credit union is the beneficiary of the policy, since in this circumstance the credit union would not be acting as an insurance intermediary, but would itself be the customer. Credit unions are reminded that they are subject to the requirements of the appropriate legislation, including the Credit Unions Act 1979, relating to activities a credit union may carry on. |
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3Mortgages and Home Finance: Conduct of Business sourcebook (MCOB) |
MCOB applies to any credit union that engages in any home finance activity. MCOB rules cover advising and selling standards, responsible lending (including affordability assessment), charges, and the fair treatment of customers in payment difficulties. |
Banking: Conduct of Business sourcebook (BCOBS) |
BCOBS sets out rules and guidance for credit unions on how they should conduct their business with their customers. In particular there are rules and guidance relating to communications with banking customers3and financial promotions (BCOBS 2), distance communications (BCOBS 3), information to be communicated to banking customers3(BCOBS 4), post sale requirements (BCOBS 5), and cancellation (BCOBS 6). 3The rules in BCOBS 3.1 that relate to distance contracts may apply 3to a credit union. This is because the Distance Marketing Directive3applies where there is "an organised distance sales or service-provision scheme run by the supplier" (Article 2(a)), i.e. if the credit union routinely sells any of its services by post, telephone, fax or the internet3. |
Supervision manual (SUP) |
The following provisions of SUP are relevant to credit unions: 13SUP 1A13 (The FCA’s 3 approach to supervision), SUP 2 (Information gathering by the FCA or PRA 3 on its own initiative), SUP 3.1 to SUP 3.8 (Auditors), SUP 5 (Skilled persons), SUP 6 (Applications to vary or cancel Part 4A12permission), SUP 7 (Individual requirements), SUP 8 (Waiver and modification of rules), SUP 9 (Individual guidance), 13SUP 10C (FCA senior management regime for approved persons in relevant authorised persons),3SUP 11 (Controllers and Close links), SUP 15 (Notifications to the FCA or PRA 3) and SUP 16 (Reporting Requirements). Credit unions are reminded that they are subject to the requirements of the Act and SUP 11 on close links, and are bound to notify the FCA3 of changes. It may be unlikely, in practice, that credit unions will develop such relationships. It is possible, however, that a person may acquire close links with a 3credit union3 within the meaning of the Act by reason of holding the prescribed proportion of deferred shares in the credit union. In relation to SUP 16, credit unions are exempted from the requirement to submit annual reports of 3close links. 12121212121312121212 |
CONC contains rules that apply to firms carrying on credit-related regulated activities. PERG 2.7.19IG provides guidance on relevant exemptions. Most credit union lending is therefore outside the scope of CONC. However, subject to the constraints in the Credit Unions Act 1979 or the Credit Unions (Northern Ireland) Order 1985 (as relevant), credit unions may undertake credit-related regulated activities to which CONC does apply if the activity is carried out by way of business. This could include lending under a borrower-lender-supplier agreement, or debt adjusting or debt counselling where the credit union is not the lender. A credit union carrying on such activities should consider whether it requires permission to do so. Further information can be found on the FCA’s website. |
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Decision, Procedure and Penalties manual (DEPP) |
DEPP is relevant to credit unions because it sets out: (1) the FCA's12 decision-making procedure for giving statutory notices. These are warning notices, decision notices and supervisory notices (DEPP 1.2 to DEPP 5); and (2) the FCA's12 policy with respect to the imposition and amount of penalties under the Act (see DEPP 6). 1212 |
Dispute Resolution: Complaints (DISP) |
DISP sets out rules and guidance in relation to treating complainants fairly and the Financial Ombudsman Service. |
Compensation (COMP) |
COMP sets out rules relating to the scheme for compensating consumers when authorised firms are unable, or likely to be unable, to satisfy claims against them.12 |
The Enforcement Guide (EG) |
The Enforcement Guide (EG) describes the FCA's12 approach to exercising the main enforcement powers given to it by the Act and by other legislation.2 12 |
Financial crime: a guide for firms (FC) |
FC provides guidance on steps that a firm can take to reduce the risk that it might be used to further financial crime. |
Table: list of general guidance to be found in PERG.
Chapter: |
Applicable to: |
About: |
Authorisation and regulated activities |
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Guidance on the scope of the Electronic Money Regulations8 88 |
a person who needs to know
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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:
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the scope of relevant orders (in particular, the Regulated Activities Order) as respects activities concerned with mortgages |
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:
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the scope of relevant orders (in particular, the Regulated Activities Order) as respects activities concerned with the sale or administration of insurance |
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 |
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 |
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Financial promotion and related activities |
any person who needs to know
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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 |
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 |
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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. |
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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 |
Guidance on the scope of MiFID and CRD IV12 9125 |
Any UK person 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 |
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 |
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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 |
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. |