Related provisions for COCON 4.2.17

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SYSC 4.7.7RRP

Table: FCA-prescribed senior management responsibilities

FCA-prescribed senior management responsibility

Explanation

Equivalent PRA-prescribed senior management responsibility

Part One (applies to all firms)

(1) Responsibility for the firm's performance of its obligations under the senior management regime

The senior management regime means the requirements of the regulatory system applying to relevant authorised persons insofar as they relate to SMF managers performing designated senior management functions, including SUP 10C (FCA senior management regime for approved persons in relevant authorised persons).

This responsibility includes:

(1) compliance with conditions and time limits on approval;

(2) compliance with the requirements about the statements of responsibilities (but not the allocation of responsibilities recorded in them);

and

(3) compliance by the firm with its obligations under section 60A of the Act (Vetting of candidates by relevant authorised

persons).

PRA-prescribed senior management responsibility 4.1(1)

(2) Responsibility for the firm's performance of its obligations under the employee certification regime

The employee certification regime means the requirements of sections 63E and 63F of the Act (Certification of employees) and all other requirements of the regulatory system about the matters dealt with in those sections, including SYSC 5.2 (Certification Regime) and the corresponding PRA requirements.

PRA-prescribed senior management responsibility 4.1(2)

(3) Responsibility for compliance with the requirements of the regulatory system about the management responsibilities map

This responsibility does not include allocating responsibilities recorded in it

PRA-prescribed senior management responsibility 4.1(3)

(4) Overall responsibility for the firm's policies and procedures for countering the risk that the firm might be used to further financial crime

(1)2 This includes the function in SYSC 6.3.8R (firm must allocate to a director or senior manager overall responsibility within the firm for the establishment and maintenance of effective anti-money laundering systems and controls), if that rule applies to the firm.

(2)2 The firm may allocate this FCA-prescribed senior management responsibility to the MLRO but does not have to.

(3)2 If the firm does not allocate this FCA-prescribed senior management responsibility to the MLRO, this FCA-prescribed senior management responsibility includes responsibility for supervision of the MLRO.

None

2(4A) Acting as the firm’swhistleblowers’ champion

The whistleblowers’ champion’s allocated responsibilities are set out in SYSC 18.4.4R

Part Two (applies to all firms except for small CRR firms and credit unions)

(5) Responsibility for:

(a) leading the development of; and

(b) monitoring the effective implementation of;

policies and procedures for the induction, training and professional development of all members of the firm'sgoverning body.

PRA-prescribed senior management responsibility 4.1(13)

(6) Responsibility for monitoring the effective implementation of policies and procedures for the induction, training and professional development of all persons performing designated senior management functions on behalf of the firm other than members of the governing body.

PRA-prescribed senior management responsibility 4.1(5)

(7) Responsibility for:

(a) safeguarding the independence of; and

(b) oversight of the performance of;

the internal audit function, in accordance with SYSC 6.2 (Internal Audit)

This responsibility includes responsibility for:

(a) safeguarding the independence of; and

(b) oversight of the performance of;

a person approved to perform the PRA's Head of Internal Audit designated senior management function for the firm.

PRA-prescribed senior management responsibility 4.1(15)

(8) Responsibility for:

(a) safeguarding the independence of; and

(b) oversight of the performance of;

the compliance function in accordance with SYSC 6.1 (Compliance

).

This responsibility includes responsibility for:

(a) safeguarding the independence of; and

(b) oversight of the performance of;

the person performing the compliance oversight function for the firm.

PRA-prescribed senior management responsibility 4.1(16)

(9) Responsibility for:

(a) safeguarding the independence of; and

(b) oversight of the performance of;

the risk function, in accordance with SYSC 7.1.21R and SYSC 7.1.22R (Risk control).

This responsibility includes responsibility for:

(a) safeguarding the independence of; and

(b) oversight of the performance of;

a person approved to perform the PRA's Chief Risk designated senior management function for the firm.

PRA-prescribed senior management responsibility 4.1(17)

(10) Responsibility for overseeing the development of and implementation of the firm's remuneration policies and practices in accordance with SYSC 19D (Remuneration Code)

PRA-prescribed senior management responsibility 4.1(18)

Part Three (applies in specified circumstances)

(11) Overall responsibility for the firm's compliance with CASS

(A) This responsibility only applies to a firm to which CASS applies.

(B) A firm may include in this FCA-prescribed senior management responsibility whichever of the following functions apply to the firm:

(a) CASS 1A.3.1R (certain CASS compliance functions for a CASS small firm);

(b) CASS 1A.3.1AR (certain CASS compliance functions for a CASS medium firm or a CASS large firm);

(c) CASS 11.3.1R (certain CASS compliance functions for certain CASS small debt management firms); or

(d) CASS 11.3.4R (certain CASS compliance functions for a CASS large debt management firm);

but it does not have to.

(C) If the firm does not include the functions in (B) in this FCA-prescribed senior management responsibility, this FCA-prescribed senior management responsibility includes responsibility for supervision of the person performing the functions in (B) that apply to the firm.

None

Allocation of overall responsibility for a firm’s activities, business areas and management functions

SYSC 4.7.8RRP
(1) A firm must ensure that, at all times, one or more of its SMF managers have overall responsibility for each of the activities, business areas and management functions of the firm.(2) This rule does not require a firm to ensure that SMF managers have overall responsibility for any activity, business area or management function that is: (a) included in an FCA-prescribed senior management responsibility;(b) included in an PRA-prescribed senior management responsibility; or(c)
SYSC 4.7.9GRP
The purpose of SYSC 4.7.8R (Allocation of overall responsibility for a firm’s activities, business areas and management functions) is to avoid gaps. It is to make sure that an SMF manager has responsibility for every part of a firm's activities, business areas and management functions not otherwise covered by other parts of this section or by the equivalent PRA requirements.
SYSC 4.7.23GRP
(1) It will be common for a small non-complex firm to divide overall responsibility for its activities between members of its governing body and not to assign overall responsibility for any activity to someone who is not a member.(2) However, when deciding how to divide up overall responsibility for its activities, a firm should avoid assigning such a wide range of responsibilities to a particular person so that the person is not able to carry out those responsibilities effectively.
SYSC 4.7.24GRP
(1) The FCA expects that normally a firm will allocate the FCA-prescribed senior management responsibility in rows (5), (7), (8), (9) and (10) of the table in SYSC 4.7.7R to an SMF manager who is a non-executive director of the firm.(2) The FCA expects that normally a firm will allocate:(a) the other FCA-prescribed senior management responsibilities; and(b) functions under SYSC 4.7.8R (Allocation of overall responsibility for a firm’s activities, business areas and management
SYSC 4.7.25GRP
(1) The FCA expects that a firm will not normally split an FCA-prescribed senior management responsibility between several SMF managers, with each only having responsibility for part.(2) The FCA expects that a firm will not normally allocate responsibility for:(a) an FCA-prescribed senior management responsibility; or(b) a function under SYSC 4.7.8R (Allocation of overall responsibility for a firm’s activities, business areas and management functions);to two or more SMF managers
SYSC 4.7.26GRP
(1) Although the norm should be for a firm to have a single individual performing each FCA-prescribed senior management responsibility or function allocated under SYSC 4.7.8R (Allocation of overall responsibility for a firm’s activities, business areas and management functions), there may be circumstances in which responsibilities can be divided or shared (see (2)).(2) A firm should only divide or share a responsibility where this is appropriate and can be justified.(3) For example,
SYSC 4.7.30GRP
(1) As explained in SYSC 4.7.2R, there is no territorial limitation to the application of this section.(2) This means that a firm should allocate:(a) the FCA-prescribed senior management responsibilities; and(b) overall responsibilities under SYSC 4.7.8R;so that they cover activities, transactions, business areas and management functions that are located or take place wholly or partly outside, as well as ones in, the United Kingdom.
SYSC 4.7.35GRP
(1) A firm should allocate between its SMF managers responsibility for every area of its activities.(2) This is required by a mixture of:(a) SYSC 4.7.5R (Allocation of FCA-prescribed senior management responsibilities); (b) SYSC 4.7.8R (Allocation of overall responsibility for a firm’s activities, business areas and management functions); (c) the requirements for FCA-designated senior management functions; and(d) the corresponding PRA requirements.
SYSC 4.7.38GRP
SYSC 4.7.26G (a firm should normally allocate responsibility for particular areas to a single SMF manager) does not mean that the FCA expects there to be a separate person with overall responsibility for each individual business area in SYSC 4 Annex 1G (The main business activities and functions of a relevant authorised person).
COCON 4.2.10GRP
The following is a non-exhaustive list of examples of conduct that would be in breach of rule SC1.(1) Failing to take reasonable steps to apportion responsibilities for all areas of the business under the approved person's control.(2) Failing to take reasonable steps to apportion responsibilities clearly among those to whom responsibilities have been delegated, which includes establishing confusing or uncertain:(a) reporting lines; or(b) authorisation levels; or(c) job descriptions
COCON 4.2.16GRP
The following is a non-exhaustive list of examples of conduct that would be in breach of rule SC2.(1) Failing to take reasonable steps to implement (either personally or through a compliance department or other departments) adequate and appropriate systems of control to comply with the relevant requirements and standards of the regulatory system for the activities of the firm.(2) Failing to take reasonable steps to monitor (either personally or through a compliance department
COCON 4.2.23GRP
The following is a non-exhaustive list of examples of conduct that would be in breach of rule SC3.(1) Failing to take reasonable steps to maintain an appropriate level of understanding about an issue or part of the business that the senior conduct rules staff member has delegated to an individual(s) (whether in-house or outside contractors) including:(a) disregarding an issue or part of the business once it has been delegated;(b) failing to require adequate reports once the resolution
SYSC 4.8.6RRP
(1) A firm must allocate each of the FCA-prescribed senior management responsibilities in rows (1) to (7) in the table in SYSC 4.8.9R to one or more SMF managers of the branch.(2) If the FCA-prescribed senior management responsibility in row (8) of the table in SYSC 4.8.9R (functions in relation to CASS) applies to a firm, the firm must allocate that FCA-prescribed senior management responsibility to one or more SMF managers of the branch.(3) A firm may not allocate an FCA-prescribed
SYSC 4.8.9RRP

Table: FCA-prescribed senior management responsibilities for third-country relevant authorised persons.

FCA-prescribed senior management responsibility in relation to the branch

Explanation

Equivalent PRA-prescribed UK branch senior management responsibility

(1) Responsibility for the firm’s performance of its obligations under the senior management regime

The senior management regime means the requirements of the regulatory system applying to relevant authorised persons insofar as they relate to SMF managers performing designated senior management functions, including SUP 10C (FCA senior management regime for approved persons in relevant authorised persons).

This responsibility includes:

(1) compliance with conditions and time limits on approval;

(2) compliance with the requirements about the statements of responsibilities (but not the allocation of responsibilities recorded in them);

and

(3) compliance by the firm with its obligations under section 60A of the Act (Vetting of candidates by relevant authorised

persons).

PRA-prescribed UK branch senior management responsibility 6.2(1)

(2) Responsibility for the firm’s performance of its obligations under the employee certification regime

The employee certification regime means the requirements of sections 63E and 63F of the Act (Certification of employees) and all other requirements of the regulatory system about the matters dealt with in those sections, including SYSC 5.2 (Certification Regime) and the corresponding PRA requirements.

PRA-prescribed UK branch senior management responsibility 6.2(2)

(3) Responsibility for compliance with the requirements of the regulatory system about the management responsibilities map

This responsibility does not include allocating responsibilities recorded in it.

PRA-prescribed UK branch senior management responsibility 6.2(3)

(4) Responsibility for management of the firm’s risk management processes in the UK

PRA-prescribed UK branch senior management responsibility 6.2(4)

(5) Responsibility for the firm’s compliance with the UKregulatory system applicable to the firm

PRA-prescribed UK branch senior management responsibility 6.2(5)

(6) Responsibility for the escalation of correspondence from the PRA, FCA and other regulators4 in respect of the firm to the governing body and/or the management body of the firm or, where appropriate, of the parent undertaking or holding company of the firm’sgroup

This includes taking steps to ensure that the senior management of the firm and, where applicable, the group, are made aware of any views expressed by the regulatory bodies and any steps taken by them in relation to the branch, firm or group.

PRA-prescribed UK branch senior management responsibility 6.2(6)

(7) Local responsibility for the firm’s policies and procedures for countering the risk that the firm might be used to further financial crime

(A) This includes the function in SYSC 6.3.8R (a firm must allocate overall responsibility to a director or senior manager within the firm for the establishment and maintenance of effective anti-money laundering systems and controls), if that rule applies to the firm.

(B) The firm may allocate this FCA-prescribed senior management responsibility to the MLRO but does not have to.

(C) If the firm does not allocate this FCA-prescribed senior management responsibility to the MLRO, this FCA-prescribed senior management responsibility includes responsibility for supervision of the MLRO.

(D) Local responsibility is defined in SYSC 4.8.10R (Local responsibility for a branch’s activities, business areas and management functions).

None

(8) Local responsibility for the firm’s compliance with CASS

(A) This responsibility only applies to a firm to which CASS applies.

(B) A firm may include in this FCA-prescribed senior management responsibility whichever of the following functions apply to the firm:

(1) CASS 1A.3.1R (certain CASS compliance functions for a CASS small firm);

(2) CASS 1A.3.1AR (certain CASS compliance functions for a CASS medium firm or a CASS large firm);

(3) CASS 11.3.1R (certain CASS compliance functions for certain CASS small debt management firms); or

(4) CASS 11.3.4R (certain CASS compliance functions for a CASS large debt management firm); but it does not have to.

(C) If the firm does not include the functions in (B) in this FCA-prescribed senior management responsibility, this FCA-prescribed senior management responsibility includes responsibility for supervision of the person performing the functions in (B) that apply to the firm.

(D) Local responsibility is defined in SYSC 4.8.10R (Local responsibility for a branch’s activities, business areas and management functions).

None

SYSC 4.8.10RRP
(1) A firm must ensure that, at all times, one or more of its SMF managers has overall responsibility (subject to the branch’sgoverning body) for each of the activities, business areas and management functions of the branch that are under the management of the branch’sgoverning body.(2) A firm must ensure that, at all times, one or more of its SMF managers has responsibility for each of the activities, business areas and management functions of the branch not covered by (1).(3)
SYSC 4.8.32GRP
(1) A third-country relevant authorised person should allocate responsibility to its SMF managers for every area of the activities of its branch.(2) This is required by a mixture of: (a) SYSC 4.8.6R (FCA-prescribed senior management responsibility);(b) SYSC 4.8.10R (Local responsibility for a firm’s activities, business areas and management functions);(c) the requirements for FCA-designated senior management functions; and(d) the corresponding PRA requirements.
SYSC 4.6.13GRP
The management responsibilities map for a branch maintained by a third-country relevant authorised person should include functions that are:(1) included in a PRA controlled function under SUP 10C.9 (Minimising overlap with the PRA approved persons regime); or(2) excluded from the other local responsibility function under SUP 10C.8.1R (Exclusion for approved person with approval to perform other designated senior management functions).
SYSC 4.6.28GRP
(1) This provision gives guidance on specific aspects of SYSC 4.6.16R and SYSC 4.6.18R.(2) A firm need only include summary details of the persons in SYSC 4.6.18R(1).(3) A branch’sSMF managers and members of its governing body or equivalent may overlap with its senior management and senior personnel. If so, the firm does not have to give the same details twice.(4) A firm should include details of individuals in addition to those in SYSC 4.6.18R(1) if they are needed to make the
CREDS 2.2.67GRP
5SYSC 4.7 says that a relevant authorised person, including a credit union, should:(1) allocate a number of specified management responsibilities (called FCA-prescribed senior management responsibilities) to one or more of its SMF managers; and(2) ensure that, at all times, one or more of its SMF managers have overall responsibility for each of the activities, business areas and management functions of the firm.
SYSC 4.5.12GRP
(1) This provision gives guidance on specific aspects of SYSC 4.5.5R and SYSC 4.5.7R.(2) A firm need only include summary details of the persons in SYSC 4.5.7R(1).(3) A firm'sSMF managers and members of its governing body may overlap with its senior management and senior personnel. If so, the firm does not have to give the same details twice.(4) A firm should include details of individuals in addition to those in SYSC 4.5.7R(1), (3) and (5) if they are needed to make the management
SYSC 3.2.16GRP
9(1) Depending on the nature, scale and complexity of its business, it may be appropriate for a firm to delegate much of the task of monitoring the appropriateness and effectiveness of its systems and controls to an internal audit function. An internal audit function should have clear responsibilities and reporting lines to an audit committee or appropriate senior manager, be adequately resourced and staffed by competent individuals, be independent of the day-to-day activities
SUP 10C.8.3GRP

Table: Examples of how the other local responsibility function applies

Example

Comments

(1) ‘A’ is allocated local responsibility for one of a branch’s main business lines. A is also appointed to perform a PRA-designated senior management function for the same branch.

A only needs approval to perform the PRA-designated senior management function.

(2) ‘A’ is outside the branch’s management structure and A’s responsibilities for the branch are limited to setting overall strategy for the branch. A does not have responsibility for implementing that strategy.

A is not performing the other local responsibility function. The reason for this is explained in SYSC 4.8.27G. SUP 10C.8.1R(2) is irrelevant to this example.

(3) A small branch undertakes two business lines (wholesale lending and corporate investments). ‘A’ is head of wholesale lending and is also an executive director of the branch. ‘B’ is head of corporate investments and does not sit on the branch management committee but reports to it on corporate investments. The branch allocates local responsibility for these functions to A and B. Neither A nor B performs any other PRA or FCA-designated senior management functions.

A only needs approval to perform the executive director function3. B needs approval to perform the other local responsibility function.

(4) A branch does not have a Head of Internal Audit. ‘P’ is allocated local responsibility for internal audit in relation to that branch.

P needs approval to perform the other local responsibility function. However, if P has already been approved to perform another PRA or FCA designated senior management function, then P will not be performing the other local responsibility function.

(5) ‘A’ is appointed to perform the executive3director function. The same branch also allocates local responsibility for some branch functions to A.

A only needs approval to perform the executive3director function.

(6) ‘A’ is approved to perform the other local responsibility function. Later, A is appointed to perform the executive3director function for the same firm.

A requires approval for the other local responsibility function when A is first appointed. When A is later approved to perform the executive3director function, A stops performing the other local responsibility function. The firm should use Form E to apply for approval for A to perform the executive3director function.

(7) ‘A’ is appointed to perform:

(a) the compliance oversight function for one firm (Firm X) in a group (which may or may not be a relevant authorised person); and

(b) a function coming within the scope of the other local responsibility function for another firm (which is a third-country relevant authorised person) in the same group (Firm Y).

A needs approval to perform the compliance oversight function for Firm X and the other local responsibility function for Firm Y.

(8) ‘A’ is appointed to take on some functions that come within the other local responsibility function. Later, A is appointed as chief risk officer.

On A’s first appointment, A will need to be approved to perform the other local responsibility function.

On being approved as chief risk officer, A stops performing the other local responsibility function as being chief risk officer is a PRA designated senior management function.

(9) ‘A’ is appointed as an executive director. A then resigns and takes up a job with the same firm coming within the other overall responsibility function.

On A’s first appointment, A will need to be approved to perform the executive3director function. A will need to get approval to perform the other overall responsibility function before A gives up being a director.

Note: Local responsibility is explained in SYSC 4.8.10R (Third-country relevant authorised persons: Allocation of responsibilities)

CREDS 8.3.9GRP
2As well as listing the FCA’sdesignated senior management functions for credit unions and other relevant authorised persons, SUP 10C has other requirements about SMF managers:(1) SUP 10C sets out the procedures for applying for, granting, removing and varying approval as an SMF manager.(2) SUP 10C requires firms to give various types of reports to the FCA about their SMF managers.(3) SUP 10C explains that each firm must prepare a statement of responsibilities for each of its SMF
SYSC 18.4.1GRP
(1) A UK relevant authorised person2 is required under SYSC 4.7.5R(1)2 to allocate the FCA-prescribed senior management responsibility for acting as the firm’swhistleblowers’ champion. (2) SYSC 18.4.2R requires the appointment by an insurer of a director or senior manager as its whistleblowers’ champion. (3) This section sets out the role of the whistleblowers’ champion.(4) The FCA expects that a firm will appoint a non-executive director as its whistleblowers’ champion. A firm
CREDS 10.1.3GRP

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 all9credit 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.

99999

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.

3Code of Conduct (COCON)

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.

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.

999

3

3

939

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

939

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.

9

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.

3Insurance: Conduct of Business sourcebook (ICOBS)

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.

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: 10SUP 1A10 (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 4A9permission), SUP 7 (Individual requirements), SUP 8 (Waiver and modification of rules), SUP 9 (Individual guidance), 10SUP 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.

99999109999

3Consumer Credit sourcebook (CONC)

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.

Decision, Procedure and Penalties manual (DEPP)

DEPP is relevant to credit unions because it sets out:

(1) the FCA's9 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's9 policy with respect to the imposition and amount of penalties under the Act (see DEPP 6).

99

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.9

The Enforcement Guide (EG)

The Enforcement Guide (EG) describes the FCA's9 approach to exercising the main enforcement powers given to it by the Act and by other legislation.2

9

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.