Related provisions for CREDS 2.2.55
1 - 20 of 46 items.
(1) The 5credit union'sgoverning body5has responsibility for ensuring that the credit union complies with the requirements of SYSC 4.1.1 R (see CREDS 2.2.1 G and CREDS 2.2.2 G). So, the governing body5 has overall responsibility for:(a) establishing objectives and formulating a business plan;(b) monitoring the financial position of the credit union;(c) determining and documenting policies and procedures;(d) directing and coordinating the work of all employees and volunteers, and
1An applicant must satisfy the FCA that: (1) the discretion of its board to make strategic decisions on behalf of the applicant has not been limited or transferred to a person outside the applicant’s group; and(2) its board has the capability to act on key strategic matters in the absence of a recommendation from a person outside the applicant’s group.
1In considering whether an applicant has satisfied LR 6.13.1R, the FCA will consider, among other things, whether the board of the applicant consists solely of non-executive directors and whether significant elements of the strategic decision-making of or planning for the applicant take place outside the applicant’s group, for example with an external management company.
(1) Long-term incentive plans should be treated as pools of variable remuneration. Many common measures of performance for long-term incentive plans, such as earnings per share (EPS), are not adjusted for longer-term risk factors. Total shareholder return (TSR) includes dividend distributions in its measurement, which can also be based on unadjusted earnings data. If incentive plans mature within a two- to four-year period and are based on EPS or TSR, strategies can be devised
(1) Performance measures based primarily on revenues or turnover are unlikely to pay sufficient regard to the quality of business undertaken or services provided. Profits are a better measure provided they are adjusted for risk, including future risks not adequately captured by accounting profits.(2) Management accounts should provide profit data at such levels within the firm's structure as to enable a firm to see as accurate a picture of contributions of relevant staff to a
A firm must ensure that: (1) its pension policy is in line with its business strategy, objectives, values and long-term interests;(2) when an employee leaves the firm before retirement, any discretionary pension benefits are held by the firm for a period of five years in the form of instruments referred to in SYSC 19C.3.47R (1); and(3) when employees reach retirement, discretionary pension benefits are paid to the employee in the form of instruments in SYSC 19C.3.47R (1) and subject
At least two independent minds should be applied to the formulation and implementation of the policies of a common platform firm, a management company3, a full-scope UK AIFM5 and the UK branch of a third country firm9. Where a firm1 nominates just two individuals to direct its business, the FCA9 will not regard them as both effectively directing the business where one of them makes some, albeit significant, decisions relating to only a few aspects of the business. Each should
Where there are more than two individuals directing the business of a common platform firm, a management company3, a full-scope UK AIFM5 or the UK branch of a third country firm9,1 the FCA9 does not regard it as necessary for all of these individuals to be involved in all decisions relating to the determination of strategy and general direction. However, at least two individuals should be involved in all such decisions. Both individuals' judgement should be engaged so that major
A firm may use external documentation (including contracts, transaction statements or advertising brochures) to define or clarify terms and conditions for its products or activities, its business strategy (for example, including through press statements), or its brand. Inappropriate or inaccurate information in external documents can lead to significant operational exposure.
A firm should establish and maintain appropriate systems and controls for the management of its IT system risks, having regard to:(1) its organisation and reporting structure for technology operations (including the adequacy of senior management oversight);(2) the extent to which technology requirements are addressed in its business strategy;(3) the appropriateness of its systems acquisition, development and maintenance activities (including the allocation of responsibilities
(1) This Remuneration Principle stresses the importance of risk adjustment in measuring performance, and the importance within that process of applying judgement6 and common sense. The FCA expects a6firm to apply qualitative judgements and common sense in6 the final decision about the performance-related components6 of variable remuneration pools6. (2) A number of risk-adjustment techniques and measures are available, and a firm should choose those most appropriate to its circumstances.
A firm must ensure that:(1) its pension policy is in line with its business strategy, objectives, values and long-term interests;(2) when an employee leaves the firm before retirement, any discretionary pension benefits are held by the firm for a period of five years in the form of instruments referred to in SYSC 19A.3.47 R (1); and(3) 3when an employee reaches retirement, discretionary pension benefits are paid to the employee in the form of instruments referred to in SYSC 19A.3.47
(1) 1The purpose of LR 6.2.1R(2), LR 6.2.3R, and LR 6.3.1R is to ensure that the applicant has representative financial information throughout the period required by LR 6.2.1R(1) and LR 6.2.3R and to assist prospective investors to make a reasonable assessment of what the future prospects of the applicant’s business might be. Investors are then able to consider the applicant’s historical financial information in light of its particular competitive advantages, the outlook for the
1Factors that may indicate that an applicant does not satisfy LR 6.4.1R include situations where:(1) a majority of the revenue generated by the applicant’s business is attributable to business conducted directly or indirectly with one person or group; (2) or
the applicant cannot demonstrate that it has access to financing other than from one person or group; or
(3) the applicant does not have:
(a) strategic control over the commercialisation of its products; or(b) strategic control
4The financial risk assessment should be based on a methodology which provides a reasonable estimate of the potential business losses which a UK RIE might incur in stressed but plausible market conditions. The FCA5 would expect a UK RIE to carry out a financial risk assessment at least once in every twelve-month period, or more frequently if there are material changes in the nature, scale or complexity of the UK RIE's operations or its business plans that suggest such financial
4The FCA5 would expect to consider the relevant annual6 financial risk assessment, any proposal with respect to an operational risk buffer and, if applicable, the consolidated balance sheet, in formulating, in accordance with the usual prudential cycle for UK RIEs,6 its guidance on the amount of eligible financial resources it considers to be sufficient for the UK RIE to hold for6 the recognition requirements. In formulating its guidance, the FCA5 would, where relevant, consider
(1) The FCA expects that a firm appointing someone to have local responsibility for a function under SYSC 4.8.10R(2) (responsibility for a branch’s activities, business areas and management functions not under the management of a branch’sgoverning body) will appoint the most senior employee or officer of the firm with responsibility for that activity, business area or management function.(2) However, as explained in SYSC 4.8.27G (Setting overall strategy for a branch), the firm
(1) Generally, where a firm allocates responsibility under SYSC 4.8.10R to one of the firm’sSMF managers who is not based in the branch the FCA would expect:(a) that the responsibility would not be allocated to a manager whose responsibilities for the branch are limited to setting overall strategy for the branch; and(b) that, instead, the firm would allocate it to a manager who is the most senior person responsible for implementing the strategy for the branch.(2) See SUP 10C.1.5AG
An AIFM must ensure that:(1) its pension policy is in line with its business strategy, objectives, values and long-term interests of the AIFs it manages;(2) when an employee leaves the firm before retirement, any discretionary pension benefits are held by the firm for a period of five years in the form of instruments in SYSC 19B.1.17R (1); and(3) in the case of an employee reaching retirement, discretionary pension benefits are paid to the employee in the form of instruments referred
A management company must ensure that its remuneration policy: (1) is in line with the business strategy, objectives, values and interests of: (a) the management company; (b) the UCITS it manages; and(c) the investors in such UCITS; and(2) includes measures to avoid conflicts of interest.[Note: article 14b(1)(b) of the UCITS Directive]
A management company must ensure that: (1) its pension policy is in line with the business strategy, objectives, values and long-term interests of: (a) the management company; and(b) the UCITS it manages; (2) when an employee leaves the management company before retirement, any discretionary pension benefits are held by the management company for a period of five years in the form of the instruments referred to in SYSC 19E.2.18R(1); and (3) for an employee reaching retirement,
A firm that wishes to make a significant change to its business, or is unsure whether the changes it is proposing would be considered to be significant, should contact the relevant regulator. The relevant regulator27 will discuss with the firm whether it will be required to submit parts of the application pack and whether any reports from third parties may be required.127
If the variation ofPart 4A permission is given, the relevant regulator27 will expect a firm to commence a new regulated activity in accordance with its business plan (revised as necessary to take account of changes during the application process) or scheme of operations for an insurer. Firms should take this into consideration when determining when to make an application to the relevant regulator.272727
A firm must ensure that:(1) its pension policy is in line with its business strategy, objectives, values and long-term interests;(2) when an employee leaves the firm before retirement, any discretionary pension benefits are held by the firm for a period of five years in the form of instruments referred to in SYSC 19D.3.56R(1); and(3) when an employee reaches retirement, discretionary pension benefits are paid to the employee in the form of instruments referred to in SYSC 19D.3.56R(1)
The FCA will
adopt a pre-emptive approach which will be based on making forward-looking
judgments about firms' business
models, product strategy and how they run their businesses, to enable the FCA to identify and intervene earlier to
prevent problems crystallising. The FCA's approach
to supervising firms will contribute
to its delivery against its objective to protect and enhance the integrity
of the UK financial system (as
set out in the Act). Where the FCA has responsibilities
Before entering into, or significantly changing, an outsourcing arrangement, a firm should:(1) analyse how the arrangement will fit with its organisation and reporting structure; business strategy; overall risk profile; and ability to meet its regulatory obligations;(2) consider whether the agreements establishing the arrangement will allow it to monitor and control its operational risk exposure relating to the outsourcing;(3) conduct appropriate due diligence of the service
6An issuer must at all times ensure that the discretion of its board to make strategic decisions on behalf of the company has not been limited or transferred to a person outside the issuer'sgroup, and that the board has the capability to act on key strategic matters in the absence of a recommendation from a person outside the issuer'sgroup.
Strategy
and plans will often dictate the risk which the business is prepared to take
on and high level controls will dictate how the business is to be run. If
the strategy of the business is to enter high-risk areas, then the degree
of control and strength of monitoring reasonably required within the business
will be high. In organising the business for which they are 3responsible, the approved person performing an accountable higher management function3should bear
this in m