Related provisions for GEN 1.1.2

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SUP 15.11.1GRP
1Under section 64A of the Act, the FCA may make rules about the conduct of approved persons and certain other 4persons who work for a firm4.
SUP 15.11.2GRP
COCON sets out rules under section 64A of the Act4and guidance on those rules for relevant authorised persons and insurers4.
SUP 15.11.4GRP
Under section 64C of the Act, a firm must notify the FCA if it takes disciplinary action against certain people working for a relevant authorised person4 and the reason for this action is a reason specified in rules made by the FCA (those rules are set out4 in SUP 15.11.6R)4.
SUP 15.11.5GRP
Disciplinary action against a person4 is defined in section 64C of the Act as the issuing of a formal written warning, the suspension or dismissal of that person4 or the reduction or recovery of any of such person's remuneration.
SUP 15.11.6AGRP
4The effect of section 64C of the Act and SUP 15.11.6R is that the reporting obligation in section 64C of the Act and in this section: (a) only applies to relevant authorised persons; and(b) only covers persons who are subject to COCON (who are called conduct rules staff in the FCA Handbook) rather than to the whole workforce of a relevant authorised person.
SUP 15.11.7GRP
A firm should make a separate notification about a person under section 64C of the Act where:(1) it has made a notification to the FCA about a person pursuant to SUP 15.3.11R(1)(a) because of a breach of COCON2; and(2) it subsequently takes disciplinary action against the person for the action, failure to act, or circumstance, that amounted to a breach of COCON.
SUP 15.11.8GRP
If, after a firm has made a notification for a person (A) pursuant to section 64C of the Act,2 it becomes aware of facts or matters which cause it to change its view that A has breached COCON, or cause it to determine that A has breached a provision of COCON other than the provision to which the notification related, the firm should inform the FCA of those facts and matters and its revised conclusion in line with a firm’s obligation to comply with Principle 11, SUP 15.6.4R and,
SUP 15.11.9GRP
If a firm takes disciplinary action as a result of a conduct breach (see SUP 15.11.6R) against an employee but the employee has appealed or plans to appeal, the firm should still report the disciplinary action under section 64C of the Act but should include the appeal in the notification. The firm should update the FCA on the outcome of any appeal.2
SUP 15.11.11GRP
In relation to any conduct rules staff, the FCA does not expect a firm to notify it pursuant to2 section 64C of the Act if the2 breach of COCON occurred before the application of COCON to that firm.
SUP 15.11.12GRP
Where a firm is required to notify the FCA pursuant to2 section 64C of the Act and that notification relates to an SMF manager, SUP 10C sets out how and when the notification must be made, and the relevant notification rules in SUP 10C apply.
SUP 15.11.13RRP
(1) A firm must make any notifications required pursuant to section 64C of the Act relating to conduct rules staff other than SMF managers4in accordance with SUP 15.11.13R to SUP 15.11.15R.3(2) That notification must be made annually.3(3) Each notification must:3(a) cover the 12 month period ending on the last day of August; and3(b) be submitted to the FCA:3(i) within two months of the end of the reporting period; or3(ii) (if the end of the reporting period in (b)(i) falls on
SUP 15.11.14RRP
(1) A firm other than a credit union must make each notification pursuant to SUP 15.11.13R (notifications about section 64C of the Act relating to conduct rules staff other than SMF managers4) by submitting it online through the FCA’s website using the electronic system made available by the FCA for this purpose.3(2) A firm must use the version of Form H (named REP008 – Notification of Disciplinary Action) 4made available on the electronic system referred to in (1), which is based
SUP 15.11.15RRP
A credit union3 must make each notification pursuant to2SUP 15.11.13R (notifications about3 section 64C of the Act relating to conduct rules staff other than SMF managers4) in accordance with the rules and guidance in SUP 15.7, using Form H as set out in SUP 15 Annex 7R3.3
SUP 15.11.17GRP
The obligation to notify pursuant to2 section 64C of the Act or to update or correct a notification under SUP 15.11.13R(4)3 does not replace or limit a firm’s obligation to comply with Principle 11.
SUP 15.11.18GRP
When considering whether to make a notification pursuant to2 section 64C of the Act, a firm should also consider whether a notification should be made under any notification rules, including, without limitation, any notification rules that require a notification to be made to the PRA.
SUP 15.11.19GRP
The obligations to make a notification pursuant to2 section 64C of the Act apply notwithstanding any agreement (for example a 'COT 3' Agreement settled by the Advisory, Conciliation and Arbitration Service (ACAS)) or any other arrangements entered into by a firm and an employee upon termination of the employee's employment. A firm should not enter into any such arrangements or agreements that could conflict with its obligations under this section.
SUP 15.11.20GRP
Failing to disclose relevant information to the FCA may be a criminal offence under section 398 of the Act.
DEPP 2.5.3GRP
FCA6 staff under executive procedures will take the decision to give a warning notice if the FCA6 proposes to:66(1) refuse an application for a Part 4A permission6 or to refuse an application to cancel a Part 4A permission6;66(2) impose a limitation or a requirement which was not applied for, or specify a narrower description of regulated activity than that applied for, on the grant of a Part 4A permission6;6(3) refuse an application to vary a Part 4A permission6, or to restrict
DEPP 2.5.8GRP
A fundamental variation or requirement means:66(1) removing a type of activity or investment from the firm'spermission; or(2) refusing an application to include a type of activity or investment; or(3) [deleted]66(4) imposing or varying an assets requirement (as defined in section 55P6 of the Act (Prohibitions and restrictions)), or refusing an application to vary or cancel such a requirement.6
DEPP 2.5.8AGRP
9The RDC will take the decision under section 63ZB of the Act to vary an approval given to an SMF manager (by imposing a condition, varying a condition, removing a condition or limiting the period for which the approval is to have effect).
DEPP 2.5.8BGRP
9Notwithstanding DEPP 2.5.7G, FCA staff under executive procedures will be the decision maker whenever all of the interested parties (as defined by section 63ZC(6) of the Act) agree not to contest the FCA’s exercise of its power under section 63ZB of the Act.
DEPP 2.5.9GRP
FCA6 staff under executive procedures will take the following statutory notice decisions:6(1) the refusal of an application for listing of securities;(2) the suspension of listing on the FCA's6 own initiative or at the request of the issuer;6(3) [deleted]22(4) the discontinuance of listing of securities at the issuer's request;(5) the exercise of any of the powers in sections 87K or 87L of the Act in respect of a breach of any applicable provision; and2(6) [deleted]22(7) the refusal
DEPP 2.5.11GRP
If securities have matured or otherwise ceased to exist the FCA6 will remove any reference to them from the official list. This is a purely administrative process, and not a discontinuance of listing in the sense used in Part 6 of the Act. Decisions relating to imposition of limitations or other restrictions of sponsors and primary information providers.66
DEPP 2.5.11AGRP
6Under section 88(4)(aa) of the Act, if the FCA proposes to impose limitations or other restrictions on the services to which a sponsor's approval relates, it must give him a warning notice. If, after considering any representations made in response to the warning notice, the FCA decides to impose limitations or other restrictions on the services to which a sponsor's approval relates, it must give him a decision notice. Where the sponsor has requested or otherwise agrees to the
DEPP 2.5.11BGRP
6If the FCA is proposing or deciding to refuse a sponsor's application for the withdrawal or variation of a limitation or other restriction on the services to which a sponsor's approval relates under section 88(8)(d) of the Act, the decision maker will be FCA staff under executive procedures where FCA staff decided to impose the limitation or other restriction. Otherwise, the RDC will take the decision to give the warning notice and decision notice.
DEPP 2.5.11CGRP
6Under section 89P(5)(b) of the Act, if the FCA proposes to impose limitations or other restrictions on the dissemination of regulated information to which a primary information provider's approval relates, it must give him a warning notice. If, after considering any representations made in response to the warning notice, the FCA decides to impose limitations or other restrictions on the dissemination of regulated information to which a primary information provider's approval
DEPP 2.5.11DGRP
6Under section 89P(9)(d) of the Act, if the FCA is proposing or deciding to refuse a primary information provider's application for the withdrawal or variation of a limitation or other restriction on the dissemination of regulated information to which a primary information provider's approval relates, the decision maker will be FCA staff under executive procedures where FCA staff decided to impose the limitation or other restriction. Otherwise, the RDC will take the decision to
DEPP 2.5.13GRP
The decisions referred to in DEPP 2.5.12 G are:(1) the decision to give a supervisory notice pursuant to section 259(3), (8) or 9(b) (directions on authorised unit trust schemes); section 268(3), 7(a) or 9(a) (directions in respect of recognised overseas schemes); or section 282(3), (6) or (7)(b) (directions in respect of relevant recognised schemes) of the Act;(1A) the decision to give a supervisory notice pursuant to section 261Z1(3), (8) or (9)(b) (Procedure on giving directions
DEPP 2.5.16GRP
A notice under paragraph 15A(4) of Schedule 3 to5 the Act relating to the application by an EEA firm for approval to manage a UCITS scheme5 is not a warning notice, but the FCA6 will operate a procedure for this5 notice which will be similar to the procedure for a warning notice.55565
DEPP 2.5.17GRP
The FCA6 expects to adopt a procedure in respect of notices under enactments other than the Act which is similar to that for statutory notices under the Act, but which recognises any differences in the legislative framework and requirements. DEPP 2 Annex 1 and DEPP 2 Annex 2 therefore identify notices to be given pursuant to other enactments and the relevant FCA6 decision maker.66
DEPP 2.5.18GRP
Some of the distinguishing features of notices given under enactments other than the Act are as follows: (1) [deleted]66(2) [deleted]66(3) Friendly Societies Act 1992, section 58A1: The warning notice and decision notice must set out the terms of the direction which the FCA6 proposes or has decided to give and any specification of when the friendly society is to comply with it. A decision notice given under section 58A(3) must give an indication of the society's right, given by
COND 2.3.1AUKRP
(1) 6A must be capable of being effectively supervised by the FCA having regard to all the circumstances including-(a) the nature (including the complexity) of the regulated activities that A carries on or seeks to carry on;(b) the complexity of any products that A provides or will provide in carrying on those activities;(c) the way in which A’s business is organised;(d) if A is a member of a group, whether membership of the group is likely to prevent the FCA’s effective supervision
COND 2.3.1BGRP
6Paragraph 2C of Schedule 6 to the Act sets out the effective supervision threshold condition for firms carrying on, or seeking to carry on, regulated activities which do not include a PRA-regulated activity.
COND 2.3.1DGRP
6Paragraph 3B of Schedule 6 to the Act sets out the effective supervision threshold condition which is relevant to the discharge by the FCA of its functions under the Act in relation to firms carrying on, or seeking to carry on, regulated activities which include a PRA-regulated activity.
COND 2.3.1EGRP
6The guidance in COND 2.3 should be read as applying to both paragraph 2C of Schedule 6 of the Act and, as far as relevant to the discharge by the FCA of its functions under the Act in respect of firms carrying on, or seeking to carry on, a PRA-regulated activity, paragraph 3B of Schedule 6 of the Act.
COND 2.3.1FGRP
6Firms carrying on, or seeking to carry on, a PRA-regulated activity, should note that the PRA is also responsible for assessing effective supervision under its own threshold conditions. Paragraphs 4F and 5F of Schedule 6 to the Act set out the effective supervision threshold conditions which are relevant to the discharge by the PRA of its functions under the Act in relation to firms carrying on, or seeking to carry on, a PRA-regulated activity. For the avoidance of doubt, this
COND 2.3.2GRP
Paragraphs 2C and 3B of Schedule 6 to the Act6 implements requirements of the Single Market Directives8, but the Act extends this condition to firms from outside the EEA and other firms which are outside the scope of the Single Market Directives.688
COND 2.3.3GRP
In assessing the threshold conditions set out in paragraphs 2C and 3B of Schedule 6 to the Act6, factors which the FCA6 will take into consideration include, among other things, whether: 6(1) it is likely that the FCA6 will receive adequate information from the firm, and those persons with whom the firm has close links, to enable it to determine whether the firm is complying with the requirements and standards under the regulatory system for which the FCA is responsible6 and to
COND 2.3.6GRP
(1) Section 420(1) of the Act (Parent and subsidiary undertaking) states that, except in relation to an incorporated friendly society, 'parent undertaking' and 'subsidiary undertaking' have the same meaning as in the Companies Acts (see section 1162 of, and schedule 7 to, the Companies Act 2006)4. These are the cases referred to in COND 2.3.7 G (1)(a) to (f).4(2) Section 420(2) of the Act supplements these definitions in two ways; these are the cases referred to in COND 2.3.7
COND 2.3.7GRP
(1) For the purposes of the threshold conditions set out in paragraphs 2C and 3B of Schedule 6 to the Act,6 and except in relation to an incorporated friendly society, an undertaking is a parent undertaking of another undertaking (a subsidiary undertaking) if any of the following apply to it:6(a) it holds a majority of the voting rights in the subsidiary undertaking; or(b) it is a member of the subsidiary undertaking and has the right to appoint or remove a majority of its board
COND 2.3.10GRP
Section 420(3) of the Act (Parent and subsidiary undertaking) states that an incorporated friendly society is a parent undertaking of another body corporate (a subsidiary undertaking) if it has the following relationship to it:6(1) it holds a majority of the voting rights in the subsidiary undertaking; or(2) it is a member of the subsidiary undertaking and has the right to appoint or remove a majority of the subsidiary undertaking's board of directors; or(3) it is a member of
COND 2.3.11GRP
For the purposes of6 the threshold conditions set out in paragraphs 2C and 3B of Schedule 6 to the Act6, an undertaking is a subsidiary undertaking of another undertaking if:6(1) the other undertaking (its parent) is a member of the undertaking;(2) a majority of the undertaking's board of directors who have held office during the financial year and during the preceding financial year have been appointed solely as a result of the exercise of the parent's voting rights; and(3) no
COND 2.3.11AGRP
5Paragraphs 2C(2)(e) and (f) and 3B(2)(e) and (f)6 of Schedule 6 to the Act reflect legislation initially introduced in the Post-BCCI Directive, which defines close links, in part, by reference to participation. Recital 5 of the Post-BCCI Directive gives further guidance on what is meant by ‘participation’ for the purposes of the directive. It states that the sole fact of having acquired a significant proportion of a company’s capital does not constitute participation for the
SUP 11.3.1GRP
The notification requirements are set out in sections 178, 179, 191D and 191E of the Act and holdings which may be disregarded are set out in section 184 of the Act.10A summary of the notification requirements described in this section is given in SUP 11 Annex 1.4
SUP 11.3.1AGRP
12For the purposes of Part XII (Control over authorised persons) of the Act, and in particular, calculations relating to the holding of shares and/or voting power, the definitions of “shares” and “voting power” are set out in section 191G of the Act.
SUP 11.3.1BGRP
12SUP 11 Annex 6G provides guidance on when one person's holding of shares or voting power must be aggregated with that of another person for the purpose of determining whether an acquisition or increase of control will take place as contemplated by section 181 or 182 of the Act such that notice must be given to the appropriate regulator15 in accordance with section 178 of the Act before making the acquisition or increase. This will be:15(1) where those persons are acting in concert,
SUP 11.3.2GRP
Sections 178(1) and 191D(1)10 of the Act require a person (whether or not he is an authorised person) to notify the appropriate regulator15 in writing if he decides 10to acquire, increase or reduce10control or to cease to have control10 over a UK domestic firm . Failure to notify is an offence under section 191F10 of the Act (Offences under this Part).46101510101010
SUP 11.3.2AGRP
The Treasury have made the following exemptions from the obligations under section 178 of the Act10:(1) controllers and potential controllers of non-directive friendly societiesare exempt from the obligation to notify a change in control (The Financial Services and Markets Act 2000 (Controllers) (Exemption) Order 2009 (SI 2009/77410));10(2) controllers and potential controllers of building societies are exempt from the obligation to notify a change in control unless the change
SUP 11.3.4GRP
If a person decides10 to acquire control or increase control over a UK domestic firm in a way described in SUP 11.4.2 Ror acquire control in a way described in SUP 11.4.2AR (1)4, he must obtain the appropriate regulator's15 approval before doing so. Making an acquisition before the appropriate regulator15 has approved of it10is an offence under section 191F of the Act (Offences under this Part).10101510154610
SUP 11.3.5AGRP
6The appropriate regulator15 recognises that firms acting as investment managers may have difficulties in complying with the prior notification requirements in sections 178 and 191D 10of the Act as a result of acquiring or disposing of listed shares in the course of that fund management activity. To ameliorate these difficulties, the appropriate regulator15 may accept pre-notification of proposed changes in control, made in accordance with SUP D, and may grant approval of such
SUP 11.3.5BDRP
6The appropriate regulator15 may treat as notice given in accordance with sections 178 and 191D15 of the Act a written notification from a firm which contains the following statements:151015(1) that the firm proposes to acquire and/or dispose of control, on one or more occasions, of any UK domestic firm whose shares or those of its ultimate parent undertaking are, at the time of the acquisition or disposal of control, listed, or which are traded or admitted to trading on a MTF
SUP 11.3.7DRP
A section 178 notice10 given to the appropriate regulator15 by a person who is acquiring control or increasing his control over a UK domestic firm, in a way described in SUP 11.4.2 R (1) to (4), or acquiring control in a way described in SUP 11.4.2A R, must contain the information and be accompanied by such documents as are required by the controllers form approved by the appropriate regulator15 for the relevant application. 4610151015
SUP 11.3.10DRP
(1) A person who has submitted a section 178 notice10under SUP 11.3.7 D must notify the appropriate regulator15 immediately if he becomes aware, or has information that reasonably suggests, that he has or may have provided the appropriate regulator15 with information which was or may have been false, misleading, incomplete or inaccurate, or has or may have changed, in a material particular. The notification must include:101515(a) details of the information which is or may be false,
SUP 11.3.11GRP
The appropriate regulator15 will inform a section 178 notice giver as soon as reasonably practicable if it considers the section 178 notice to be incomplete.1065181015
SUP 11.3.12GRP
86 The appropriate regulator15 has power, under section 179(3) 10of the Act (Requirements for section 178 notices1510), to vary or waive these 10requirements in relation to a section 178 notice in particular cases 10if it considers it appropriate to do so.8881015101015108
SUP 11.3.14GRP
Pursuant to section 188 of the Act (Assessment: consultation with EC15 competent authorities), the 10appropriate regulator15 is obliged to consult any appropriate Home State regulator10before making a determination under section 185 of the Act (Assessment: general)10.7101115151067910
SUP 11.3.17GRP
6Notifications to the appropriate regulator15 by proposed controllers and controllers under Part XII of the Act may be made on a joint basis outlined in SUP 11.5.8 G to SUP 11.5.10 G.1510
DEPP 6.2.6GRP
In addition to the general factors outlined in DEPP 6.2.1 G, there are some additional considerations that may be relevant when deciding whether to take action against an individual under6section 66 of the Act. This list of those considerations is non-exhaustive. Not all considerations below may be relevant in every case, and there may be other considerations, not listed, that are relevant.(1) The individual's6 position and responsibilities. The FCA4 may take into account the
DEPP 6.2.6AGRP
6DEPP 6.2.6BG to DEPP 6.2.9G apply to action taken by the FCA under section 66 of the Act, except for action taken by virtue of section 66A(5). DEPP 6.2.9-AG to DEPP 6.2.9-FG apply only to action taken by virtue of section 66A(5).9
DEPP 6.2.9-AGRP
9The FCA is able to take action against an SMF manager under section 66A(5) of the Act where: (1) there has been (or continues to be) a contravention of a relevant requirement by the SMF manager’sfirm;(2) at the time of the contravention, the SMF manager was responsible for the management of any of the firm’s activities in relation to which the contravention occurred; and(3) the SMF manager did not take such steps as a person in their position could reasonably be expected to take
DEPP 6.2.9-BGRP
9When deciding whether to take action further to section 66A(5) of the Act, the FCA will follow the approach in DEPP 6.2.1G and DEPP 6.2.6G.
DEPP 6.2.9-CGRP
9When determining, for the purposes of section 66A(5) of the Act, whether an SMF manager was responsible for the management of any of the firm’s activities in relation to which a contravention of a relevant requirement by the firm occurred, the FCA will consider the full circumstances of each case. A list of considerations that may be relevant for this purpose is set out below. This list is not exhaustive.(1) The SMF manager’sstatement of responsibilities, including whether the
DEPP 6.2.9-DGRP
9Under section 66A(5)(d) of the Act, such steps as a person in the position of the SMF manager could reasonably be expected to take to avoid the firm’s contravention of a relevant requirement occurring (or continuing) are: (1) such steps as a competent SMF manager would have taken:(a) at that time;(b) in that specific individual’s position;(c) with that individual’s role and responsibilities; and(d) in all the circumstances.
DEPP 6.2.9-EGRP
9When determining under section 66A(5)(d) of the Act whether or not an SMF manager has taken such steps as a person in their position could reasonably be expected to take to avoid the contravention of a relevant requirement by the firm occurring (or continuing), additional considerations to which the FCA would expect to have regard include, but are not limited to:(1) the role and responsibilities of the SMF manager (for example, such steps as an SMF manager in a non-executive
DEPP 6.2.9-FGRP
Where action is taken against an SMF manager under section 66A(5) of the Act the onus will be on the FCA to show that the SMF manager has been guilty of misconduct.
DEPP 6.2.9AGRP
3In addition to the general factors outlined in DEPP 6.2.1 G, there are some additional considerations that the FCA4 will have regard to when deciding whether to take action against a person that performs a controlled function without approval contrary to section 63A of the Act.4(1) The conduct of the person. The FCA4 will take into consideration whether, while performing controlled functions without approval, the person committed misconduct in respect of which, if he had been
DEPP 6.2.10GRP
The primary responsibility for ensuring compliance with Part VI of the Act, the Part 6 rules, the prospectus rules or a provision otherwise made in accordance with the Prospectus Directive or a requirement imposed under such provision rests with the persons identified in section 91(1) and section 91(1A) (Penalties for breach of Part 6 rules) of the Act respectively. Normally therefore, any disciplinary action taken by the FCA4 for contraventions of these obligations will in the
DEPP 6.2.11GRP
However, in the case of a contravention by a person referred to in section 91(1)(a) or section 91(1)(b) or section 91(1A) of the Act ("P"), where the FCA4 considers that another person who was at the material time a director of P was knowingly concerned in the contravention, theFCA4 may take disciplinary action against that person. In circumstances where the FCA4 does not consider it appropriate to seek a disciplinary sanction against P (notwithstanding a breach of relevant requirements
DEPP 6.2.14GRP
The Principles are set out in PRIN 2.1.1 R. The Principles are a general statement of the fundamental obligations of firms under the regulatory system. The Principles derive their authority from the FCA's4 rule-making powers set out in section 137A4(General rule-making power) of the Act. A breach of a Principle will make a firm liable to disciplinary action. Where the FCA4 considers this is appropriate, it will discipline a firm on the basis of the Principles alone.444
DEPP 6.2.16GRP
The Listing Principles and Premium Listing Principles5 are set out in LR 7. The Listing Principles set out in LR 7.2.1 R5 are a general statement of the fundamental obligations of all5listed companies. In addition to the Listing Principles, the Premium Listing Principles set out in LR 7.2.1A R are a general statement of the fundamental obligations of all listed companies with a premium listing of equity shares. The Listing Principles and Premium Listing Principles5 derive their
DEPP 6.2.25GRP
In any case where the FCA4 considers that the use of its powers under any of sections 123, 123A, 123B,7 129, 381, 383 or 384 of the Act may be appropriate, if that use may affect the timetable or outcome of a takeover bid or where it is appropriate in the context of any exercise by the Takeover Panel of its powers and authority, the FCA4 will consult the Takeover Panel before using any of those powers.44
SYSC 5.2.4GRP
Under section 63E(1) of the Act, a firm must take reasonable care to ensure that no employee of the firm performs an FCA-specified significant-harm function under an arrangement entered into by the firm in relation to the carrying on by that firm of a regulated activity, unless the employee has a valid certificate issued by that firm to perform the function to which certificate relates.
SYSC 5.2.6GRP
Under section 63F of the Act, a firm may issue a certificate to a person only if the firm is satisfied that the person is a fit and proper person to perform the FCA-specified significant-harm function to which the certificate relates.
SYSC 5.2.7GRP
Under section 63F of the Act, in assessing if a person is fit and proper to perform an FCA-specified significant-harm function, a firm must have regard, in particular, to whether that person:(1) has obtained a qualification;(2) has undergone, or is undergoing, training;(3) possesses a level of competence; or(4) has the personal characteristics,required by general rules made by the FCA.
SYSC 5.2.10GRP
(1) A person seconded from a contractor may fall into the certification regime. The material in SYSC 5.2.21G is relevant to when this is the case.(2) In deciding if a person seconded from a contractor is fit and proper, the firm may take into account information and references from the contractor.(3) In deciding how much reliance to put on the contractor, the firm should take into account:(a) the familiarity of the contractor with the obligations of firms under SYSC 5.2, the corresponding
SYSC 5.2.11GRP
Under section 63F of the Act, a certificate issued by a firm to a person must:(1) state that the firm is satisfied that the person is fit and proper to perform the function to which the certificate relates; and(2) set out the aspects of the affairs of the firm in which the person will be involved in performing the function.
SYSC 5.2.12GRP
(1) The Act says that a certificate is valid for a period of 12 months, beginning with the day on which it is issued. 3(2) The FCA believes that the Act allows a firm to draft a certificate to expire after fewer than 12 months. The FCA interprets the Act in this way because to require a firm to make a certificate last longer than the firm thinks best is likely to make it harder for the firm to ensure the fitness of its certification employees. That would undermine the purpose
SYSC 5.2.13GRP
Under section 63F of the Act, if, after having considered if a person is fit and proper to perform an FCA-specified significant-harm function, a firm decides not to issue a certificate to that person, the firm must give the person a notice in writing stating:(1) what steps (if any) the firm proposes to take in relation to the person as a result of the decision; and(2) the reasons for proposing to take those steps.
SYSC 5.2.14GRP
If, after having considered whether a person is fit and proper to perform an FCA-specified significant-harm function, a firm decides not to issue a certificate to that person, it should consider if the circumstances warrant making a notification to the FCA for a breach of the rules in COCON pursuant to SUP 15.3.11R (Breaches of rules and other requirements in or under the Act or the CCA)4.
SYSC 5.2.15GRP
Under section 63F of the Act, a firm must maintain a record of every employee who has a valid certificate issued by it.
SYSC 5.2.18RRP
In accordance with section 63E of the Act (Certification of employees by relevant authorised persons), a function is an FCA-specified significant-harm function only if, in relation to the carrying on of a regulated activity by a firm, that function:(1) is not a controlled function in relation to the carrying on of that regulated activity by that firm; and(2) will require the person performing it to be involved in one or more aspects of the firm's affairs, so far as relating to
SYSC 5.2.20GRP
The FCA interprets the phrase ‘dealing with’ in SYSC 5.2.19R as including having contact with clients and extending beyond ‘dealing’ as used in the phrase ‘dealing in investments’. ‘Dealing in’ is used in Schedule 2 to the Act to describe in general terms the regulated activities which are specified in Part II of the Regulated Activities Order.
SYSC 5.2.22GRP
(1) A person who works for an appointed representative of a firm may fall into the certification regime. In practice, however, they may not meet the conditions for the certification regime to apply.(2) One condition for the certification regime to apply to a person is that the person performs a specified significant-harm function under an arrangement entered into by the firm (see SYSC 5.2.4G). However, unlike the equivalent parts of the Act for the approved persons regime, the
SYSC 5.2.24GRP
Under section 63E(7) of the Act, SYSC 5.2 does not apply to an arrangement which allows an employee to perform a function if the question of whether the employee is fit and proper to perform the function is reserved under any of the Single Market Directives or the auction regulation to an authority in a country or territory outside the United Kingdom.
SYSC 5.2.29RRP
In accordance with section 63E(3) of the Act, the functions in the table in SYSC 5.2.30R are FCA-specified significant-harm functions.
SUP 10C.14.7RRP
(1) A firm must notify the FCA as soon as practicable after it becomes aware, or has information which reasonably suggests, that it will submit a qualified Form C for an FCA-approved SMF manager.(2) Form C is qualified if the information it contains:(a) relates to the fact that the firm has dismissed, or suspended, the FCA-approved SMF manager from its employment; (b) relates to the resignation by the FCA-approved SMF manager while under investigation by the firm, the FCA or any
SUP 10C.14.15RRP
(1) If any of the details relating to:(a) the arrangements in relation to any of a firm'sFCA-approved SMF managers; or(b) any FCA-designated senior management functions of one of its FCA-approved SMF managers;are to change, the firm must notify the FCA on Form D (SUP 10A Annex 7R).(2) The notification under (1) must be made as soon as reasonably practicable after the firm becomes aware of the proposed change.(3) This rule does not apply to anything required to be notified under
SUP 10C.14.17GRP
(1) Under section 62A of the Act, a firm should provide the FCA with a revised statement of responsibilities if there has been any significant change in the responsibilities of an FCA-approved SMF manager.(2) Details can be found in SUP 10C.11 (Statements of responsibilities).
SUP 10C.14.20GRP
Failing to disclose relevant information to the FCA may be a criminal offence under section 398 of the Act.
SUP 10C.14.22RRP
If a firm is required to notify the FCA about an FCA-approved SMF manager under any of the following:(1) section 63(2A) of the Act (Duty to notify regulator of grounds for withdrawal of approval); or2(2) [deleted]2(3) section 64C of the Act (Requirement for relevant authorised persons to notify regulator of disciplinary action);it must give that notification:(4) under SUP 10C.14.5R (Form C) if that rule applies; (5) under SUP 10C.14.7R (Qualified Form C) if that rule applies;
SUP 10C.14.24GRP
Table: Explanation of the sections of the Act mentioned in SUP 10C.12.22G1SectionSummary of relevant partsOther Handbook materialCommentsSection 63(2A) (Duty to notify regulator of grounds for withdrawal of approval)At least once a year, each firm must, in relation to every SMF manager for whom an approval has been given on the application of that firm:(a) consider whether there are any grounds on which the FCA could withdraw the approval; and(b) if the firm is of the opinion
SUP 10C.14.26GRP
(1) The obligations to supply information to the FCA under:(a) SUP 10C; or(b) the sections of the Act listed in SUP 10C.14.22R;apply notwithstanding any agreement (for example, a 'COT 3' Agreement settled by the Advisory, Conciliation and Arbitration Service (ACAS)) or any other arrangements entered into by a firm and an employee upon termination of the employee's employment. (2) A firm should not enter into any such arrangements or agreements that could conflict with its obligations
SUP 10C.14.27GRP
Failing to disclose relevant information to the FCA may be a criminal offence under section 398 of the Act.
SUP 10C.14.28RRP
This section also applies to a notification about a PRA-approved SMF manager who is not an FCA-approved SMF manager required by any of the provisions of the Act listed in SUP 10C.14.22R.
SUP 10C.14.30GRP
If a firm is required to notify the FCA about a PRA-approved SMF manager who is not an FCA-approved SMF manager under one of the sections of the Act referred to in SUP 10C.14.28R, it should make a single notification under the PRA's requirements. There is no need for a separate notification to the FCA.
EG 19.36.2RP
1The FCA’s approach to enforcing the Packaged Retail and Insurance-based Investment Products Regulations, whether the person is authorised or not, will mirror our general approach to enforcing the Act, as set out in EG 2. We will seek to exercise our enforcement powers in a manner that is transparent, proportionate, responsive to the issue, and consistent with our publicly stated policies. We will also seek to ensure fair treatment when exercising our enforcement powers. Finally,
EG 19.36.5RP
1The Packaged Retail and Insurance-based Investment Products Regulations, for the most part, mirror the FCA’s investigative, sanctioning and regulatory powers under the Act. The FCA has decided to adopt procedures and policies in relation to the use of those powers akin to those it has under the Act. Key features of the FCA’s approach are described below.
EG 19.36.6RP
1The Packaged Retail and Insurance-based Investment Products Regulations apply to much of Part 11 of the Act. The effect of this is to apply the same procedures under the Act for appointing investigators and requiring information when investigating breaches of the Packaged Retail and Insurance-based Investment Products Regulations.
EG 19.36.7RP
1For example, the FCA will notify the subject of the investigation that we have appointed investigators to carry out an investigation under the Packaged Retail and Insurance-based Investment Products Regulations and the reasons for the appointment, unless notification is likely to prejudice the investigation or otherwise result in it being frustrated. The FCA expects to carry out a scoping visit early on in the enforcement process in most cases. The FCA’s policy in civil investigations
EG 19.36.9RP
1The Packaged Retail and Insurance-based Investment Products Regulations do not require the FCA to have published procedures for commencing criminal prosecutions. However, in these situations the FCA expects that it will normally follow its decision-making procedures for the equivalent decisions under the Act, as set out in EG 12.
EG 19.36.10RP
1The Packaged Retail and Insurance-based Investment Products Regulations do not require the FCA to have published procedures to apply to the court for an injunction or restitution order. However, the FCA will normally follow its decision-making procedure for the equivalent decisions under the Act, as set out in EG 10 and EG 11.
EG 19.36.11RP
1The Packaged Retail and Insurance-based Investment Products Regulations require the FCA to give third party rights as set out in section 393 of the Act and to give access to certain material as set out in section 394 of the Act.
EG 19.36.14RP
1As with cases under the Act, the FCA may settle or mediate appropriate cases involving civil breaches of the Packaged Retail and Insurance-based Investment Products Regulations to assist it exercise its functions under the Packaged Retail and Insurance-based Investment Products Regulations in the most efficient and economic way. [Note: See DEPP 5, DEPP 6.7 and EG 5 for further information on the settlement process and the settlement discount scheme.]
EG 19.36.16RP
1The Packaged Retail and Insurance-based Investment Products Regulations apply section 169 of the Act which requires the FCA to publish a statement of policy on the conduct of certain interviews in response to requests from overseas regulators. For the purposes of the Packaged Retail and Insurance-based Investment Products Regulations the FCA will follow the procedures described in DEPP 7.
DEPP 1.2.1GRP
Section 395 of the Act (The FCA's and PRA's procedures) requires the FCA2 to publish a statement of its procedure for the giving of statutory notices. The procedure must be designed to secure, among other things, that the decision which gives rise to the obligation to give a statutory notice is taken by a person not directly involved in establishing the evidence on which that decision is based or by two or more persons who include a person not directly involved in establishing
DEPP 1.2.2GRP
Table: Summary of statutory and related noticesNoticeDescriptionAct referenceFurther informationWarning noticeGives the recipient details about action that the FCA2 proposes to take and about the right to make representations.2Section 387DEPP 2.2Decision noticeGives the recipient details about action that the FCA2 has decided to take. The FCA2 may also give a further decision notice if the recipient of the original decision notice consents.22Section 388DEPP 2.3Notice of discontinuanceIdentifies
DEPP 1.2.4GRP
The requirement in section 395 of the Act to publish a procedure for the giving of notices does not extend to the giving of a notice of discontinuance or a final notice. Neither of these notices is a statutory notice for the purposes of DEPP; nor is the decision to give such a notice a statutory notice associated decision.
DEPP 1.2.4AGRP
2Section 395 of the Act also requires the FCA to publish a statement of its procedure for decisions which give3 rise to an obligation for the PRA to include a statement under section 387(1A) in a warning notice or a statement under section 388(1A) in a decision notice as follows:(1) Section 387(1A) provides that where the FCA proposes to refuse consent for the purposes of section 55F, 55I or 59 of the Act, or to give conditional consent as mentioned in section 55F(5), 55I(8) or
DEPP 1.2.4BGRP
2Where an application for Part 4A permission is made to the PRA as the appropriate regulator (section 55A(2)(a) of the Act), the PRA may only give permission with the consent of the FCA (section 55F of the Act). FCA consent can be conditional on the PRA imposing limitations or specifying the permission is for certain regulated activities only.
DEPP 1.2.4CGRP
2Where an application to vary a Part 4A permission is made to the PRA as the appropriate regulator (section 55A(2)(a) of the Act), the PRA may only give permission with the consent of the FCA (section 55I of the Act). The FCA may withhold its consent to a proposed variation if it appears to it that it is desirable to do so in order to advance one or more of its operational objectives. FCA consent can be conditional on the PRA imposing limitations, or the PRA specifying the permission
DEPP 1.2.4DGRP
2Where an application to perform a controlled function is made to the PRA as the appropriate regulator, the PRA can only approve a person to perform a controlled function with the consent of the FCA (section 59(4)(b) of the Act). Where the application is a relevant senior management application, the FCA’s consent can be conditional on the PRA imposing conditions, or the PRA giving approval only for a limited period.3
DEPP 1.2.5GRP
Decisions on whether to give a statutory notice will be taken by a 'decision maker'. The FCA's2 assessment of who is the appropriate decision maker is subject to the requirements of section 395 of the Act and will depend upon the nature of the decision, including its complexity, importance and urgency. References to the 'decision maker' in DEPP are to:2(1) the Regulatory Decisions Committee (RDC); or(2) FCA2 staff under executive procedures; or2(3) FCA2 staff under the settlement
DEPP 1.2.6GRP
The decision maker will also take decisions associated with a statutory notice (a 'statutory notice associated decision'). Statutory notice associated decisions include decisions:(1) to set or extend the period for making representations;(2) on whether the FCA2 is required to give a copy of the statutory notice to any third party and, if so, the period for the third party to make representations; and2(3) on whether to refuse access to FCA2 material, relevant to the relevant statutory
EG 19.34.2RP
1The FCA’s approach to enforcing under the MiFI Regulations, whether the person is authorised or not, will mirror our general approach to enforcing the Act, as set out in EG 2. We will seek to exercise our enforcement powers in a manner that is transparent, proportionate, responsive to the issue and consistent with our publicly stated policies. We will also seek to ensure fair treatment when exercising our enforcement powers. Finally, we will aim to change the behaviour of the
EG 19.34.5RP
1The MiFI Regulations, for the most part, mirror the FCA’s investigative, sanctioning and regulatory powers under the Act. The FCA has decided to adopt procedures and policies in relation to the use of those powers akin to those we have under the Act. Key features of the FCA’s approach are described below.
EG 19.34.6RP
1The MiFI Regulations apply much of Part 11 of the Act. The effect of this is to apply the same procedures under the Act for appointing investigators and requiring information when investigating breaches of the MiFI Regulations.
EG 19.34.7RP
1The FCA will notify the subject of the investigation that we have appointed investigators to carry out an investigation under the MiFI Regulations and the reasons for the appointment, unless notification is likely to prejudice the investigation or otherwise result in it being frustrated. The FCA expects to carry out a scoping visit early on in the enforcement process in most cases. The FCA’s policy in non-criminal investigations under the MiFI Regulations is to use powers to
EG 19.34.9RP
1The MiFI Regulations do not require the FCA to have published procedures for commencing criminal prosecutions. However, in these situations the FCA expects that we will normally follow our decision making procedures for the equivalent decisions under the Act, as set out in EG 12.
EG 19.34.10RP
1The MiFI Regulations do not require the FCA to have published procedures to apply to the court for an injunction or restitution order. However, the FCA will normally follow our decision making procedures for the equivalent decisions under the Act, as set out in EG 10 and EG 11.
EG 19.34.11RP
1The MiFI Regulations require the FCA to give third party rights as set out in section 393 of the Act and to give access to certain material as set out in section 394 of the Act.
EG 19.34.14RP
1As with cases under the Act, the FCA may settle or mediate appropriate cases involving non-criminal breaches of the MiFI Regulations to assist us to exercise our functions under the MiFI Regulations in the most efficient and economic way. See DEPP 5, DEPP 6.7 and EG 5 for further information on the settlement process and the settlement discount scheme.
EG 19.34.15RP
1The FCA will apply the approach to publicity that is outlined in EG 6, read in light of the applicable publicity provisions in section 391D of the Act.
EG 19.34.21RP
1The MiFI Regulations apply section 169 of the Act which requires the FCA to publish a statement of policy on the conduct of certain interviews in response to requests from overseas regulators. For the purposes of the MiFI Regulations the FCA will follow the procedures described in DEPP 7.
EG 19.35.2RP
1The FCA’s approach to enforcing the DRS Regulations will mirror our general approach to enforcing the Act, as set out in EG 2. We will seek to exercise our enforcement powers in a manner that is transparent, proportionate, responsive to the issue, and consistent with our publicly stated policies. We will also seek to ensure fair treatment when exercising our enforcement powers. Finally, we will aim to change the behaviour of the person who is the subject of our action, to deter
EG 19.35.5RP
1The DRS Regulations, for the most part, mirror the FCA’s investigative, sanctioning and regulatory powers under the Act. The FCA has decided to adopt procedures and policies in relation to the use of those powers akin to those we have under the Act. Key features of the FCA’s approach are described below.
EG 19.35.6RP
1The DRS Regulations apply much of Part 11 of the Act. The effect of this is to apply the same procedures under the Act for appointing investigators and requiring information when investigating breaches of the DRS Regulations.
EG 19.35.7RP
1The FCA will notify the subject of the investigation that we have appointed investigators to carry out an investigation under the DRS Regulations and the reasons for the appointment, unless notification is likely to prejudice the investigation or otherwise result in it being frustrated. The FCA expects to carry out a scoping visit early on in the enforcement process in most cases. The FCA’s policy in non-criminal investigations under the DRS Regulations is to use powers to compel
EG 19.35.10RP
1The DRS Regulations do not require the FCA to have published procedures for commencing criminal prosecutions. However, in these situations the FCA expects that we will normally follow our decision making procedures for the equivalent decisions under the Act, as set out in EG 12.
EG 19.35.11RP
1The DRS Regulations do not require the FCA to have published procedures to apply to the court for an injunction or restitution order. However, the FCA will normally follow our decision making procedure for the equivalent decisions under the Act, as set out in EG 10 and EG 11.
EG 19.35.12RP
1The DRS Regulations require the FCA to give third party rights as set out in section 393 of the Act and to give access to certain material as set out in section 394 of the Act.
EG 19.35.15RP
1As with cases under the Act, the FCA may settle or mediate appropriate cases involving non-criminal breaches of the DRS Regulations to assist us to exercise our functions under the DRS Regulations in the most efficient and economic way.[Note: See DEPP 5, DEPP 6.7 and EG 5 for further information on the settlement process and the settlement discount scheme.]
EG 19.35.16RP
1The FCA will apply the approach to publicity that is outlined in EG 6, read in light of applicable publicity provisions in section 391D of the Act.
EG 19.35.17RP
1The DRS Regulations apply section 169 of the Act which requires the FCA to publish a statement of policy on the conduct of certain interviews in response to requests from overseas regulators. For the purposes of the DRS Regulations the FCA will follow the procedures described in DEPP 7.
DEPP 3.2.10GRP
If the RDC considers it relevant to its consideration, it may ask FCA1 staff to explain or provide any or all of the following:1(1) additional information about the matter (which FCA1 staff may seek by further investigation); or1(2) further explanation of any aspect of the FCA1 staff recommendation or accompanying papers; or1(3) information about FCA1 priorities and policies (including as to the FCA's view on the law or on the correct legal interpretation of provisions of the
DEPP 3.2.11GRP
The RDC has no power under the Act to require persons to attend before it or provide information. It is not a tribunal and will make a decision based on all the relevant information available to it, which may include views of FCA1 staff about the relative quality of witness and other evidence.1
DEPP 3.2.14GRP
If the RDC decides that the FCA1 should give a warning notice or a first supervisory notice:1(1) the RDC will settle the wording of the warning notice or first supervisory notice, and will ensure that the notice complies with the relevant provisions of the Act;(2) the RDC will make any relevant statutory notice associated decisions;(3) the RDC staff will make appropriate arrangements for the notice to be given; and(4) the RDC staff will make appropriate arrangements for the disclosure
DEPP 3.2.14AGRP
1If FCA staff consider that it is appropriate to publish information about the matter to which a warning notice falling within section 391(1ZB) of the and given by the RDC3Act relates, they will make a recommendation to the RDC that such information should be published.
DEPP 3.2.14BGRP
1The RDC will then 3consider whether it is appropriate in all the circumstances to publish information about the matter to which the3warning notice falling within section 391(1ZB) of the Act relates. The FCA's policy on publishing such information is set out in EG 6.
DEPP 3.2.14CGRP
1If the RDC proposes that the FCA should publish information about the matter to which a warning notice falling within section 391(1ZB) of the Act relates:(1) the RDC will settle the wording of the statement it proposes the FCA should publish (warning notice statement);(2) the RDC staff will make appropriate arrangements for the warning notice statement it proposes the FCA should publish to be given to the persons to whom the warning notice was given or copied;(3) the proposed
DEPP 3.2.15GRP
(1) A warning notice or a first supervisory notice will (as required by the Act) specify the time allowed for making representations. This will not be less than 141days.1(2) The FCA1 will also, when giving a warning notice or a first supervisory notice, specify a time within which the recipient is required to indicate whether he wishes to make oral representations.1
DEPP 3.2.22AGRP
3If the person subject to enforcement action notifies the RDC that they wish to make an expedited reference to the Tribunal under DEPP 5.1.8GG, the RDC shall decide whether to give a decision notice in the light of any representations by any third party under section 393 of the Act and any other interested party under section 63 or 67 of the Act (see DEPP 5.1.8IG).
DEPP 3.2.24GRP
If the RDC decides that the FCA1 should give a decision notice or a second supervisory notice:1(1) the RDC will settle the wording of the notice which will include a brief summary of the key representations made and how they have been dealt with, and will ensure that the notice complies with the relevant provisions of the Act;(2) the RDC will make any relevant statutory notice associated decisions, including whether the FCA1 is required to give a copy of the notice to a third
DEPP 3.2.27GRP
A decision by the RDC to give a decision notice or supervisory notice may lead to a reference to the Tribunal under the Act. The conduct of proceedings before the Tribunal is not however a matter for the RDC.
REC 3.3.1GRP
Under section 294 of the Act (Modification or waiver of rules), the FCA1 may, on the application or with the consent of a recognised body (including an ROIE),1 direct that any notification rule is not to apply to the body or is to apply with such modifications as may be specified in the waiver.11
REC 3.3.2GRP
A waiver given under section 294 of the Act may be made subject to conditions.
REC 3.3.3GRP
Under section 294(4) of the Act, before the FCA1 may give a waiver of notification rules, it must be satisfied that:1(1) compliance by the recognised body with those notification rules, or with those rules as unmodified, would be unduly burdensome or would not achieve the purpose for which those rules were made; and(2) the waiver would not result in undue risk to persons whose interests those rules are designed to protect.
REC 3.3.5GRP
There is no application form, but applicants should make their application formally and in writing and in accordance with any direction the FCA1 may make under section 294(2) of the Act. Each application should set out at least:1(1) full particulars of the waiver which is requested; (2) the reason why the recognised body believes that the criteria set out in section 294(4) (and described in REC 3.3.3 G) would be met, if this waiver were granted; and (3) where the recognised body
REC 3.3.6GRP
The FCA1 may request further information from the applicant, before deciding whether to give a waiver under section 294 of the Act.1
REC 3.3.7GRP
Any waiver given by the FCA1 under section 294 of the Act will be made in writing, stating: 1(1) the name of the recognised body in respect of which the waiver is made;(2) the notification rules which are to be waived or modified in respect of that body;(3) where relevant, the manner in which any rule is to be modified;(4) any condition or time limit to which the waiver is subject; and(5) the date from which the waiver is to take effect.
REC 3.3.9GRP
Where the FCA1 wishes to give a waiver under section 294 of the Act with the consent of a recognised body (rather than on the application of a recognised body), the FCA1 will correspond or discuss this with that body in order to agree an appropriate waiver.11
REC 3.3.10GRP
The FCA1 will periodically review any waiver it has given. The FCA1 has the right to revoke a waiver under section 294(6) of the Act. This right is likely to be exercised in the event of a material change in the circumstances of the recognised body or in any fact on the basis of which the waiver was given.11
SUP 5.1.1ARRP
6In respect of the FCA's power in section 166 of the Act (Reports by skilled persons), reference to a firm in SUP 5.5.1 R, SUP 5.5.5 R and SUP 5.5.9 R includes a recognised investment exchange.
SUP 5.1.1BGRP
6In respect of the FCA's power in section 166 of the Act (Reports by skilled persons), the guidance in this chapter applies to a recognised investment exchange in the same way as it applies to a firm.
SUP 5.1.1CDRP
2SUP 5.5.1R and SUP 5.5.5R apply to CBTL firms in relation to their CBTL business as if a reference to firm in these rules were a reference to a CBTL firm and a reference to section 166 of the Act were a reference to section 166 of the Act, as applied by article 23(2)(b) of the MCD Order.
SUP 5.1.1DGRP
2SUP 5.5.1R and SUP 5.5.5R apply to former CBTL firms in relation to their CBTL business as guidance and as if:(1) a reference to firm in those rules were a reference to a CBTL firm;(2) section 166 of the Act were a reference to section 166 of the Act as applied by article 23(2)(b) of the MCD Order; and(3) the word “must” were replaced by the word “should”.
SUP 5.1.1EGRP
2The guidance in SUP 5.2.1G, SUP 5.3, SUP 5.4 (except SUP 5.4.1AG), and SUP 5.5 (except SUP 5.5.10G and SUP 5.5.11G) applies to CBTL firms and former CBTL firms in relation to their CBTL business as if:(1) a reference to firm in that guidance included a CBTL firm;(2) a reference to a section of the Act were a reference to that section as applied by article 23 of the MCD Order if applicable; and(3) a reference to the FCA's functions under the Act were a reference to the FCA's functions
SUP 5.1.2GRP
This chapter (other than the rules, and guidance on rules, in SUP 5.5 (Duties of firms)) is also relevant to certain unauthorised persons within the scope of section 166 of the Act (Reports by skilled persons) (see SUP 5.2.1 G).
SUP 5.1.2AGRP
(1) 3This chapter also applies, as guidance, to a designated bank,5designated credit reference agency or a designated finance platform5:(a) in relation to its activities under the Small and Medium Sized Business (Credit Information) Regulations or in relation to its activities under the Small and Medium Sized Business (Finance Platforms) Regulations, as the case may be5;(b) as if, in relation to the activities in (a), references to “must” in SUP 5 were read as “should”; and (c)
SUP 5.1.3GRP
6The purpose of this chapter is to give guidance on the FCA’s4 use of the power in section 166 (Reports by skilled persons) and section 166A (Appointment of skilled person to collect and update information) of the Act. The purpose is also to make rules requiring a firm to give assistance to a skilled person and, where a firm is required to appoint a skilled person, to include certain provisions in its contract with a skilled person. These rules are designed to ensure that the
EG 19.29.2RP
1The FCA's approach to taking enforcement action under the Immigration Regulations will mirror its general approach to enforcing the Act, as set out in EG 2. It will seek to exercise its enforcement powers in a manner that is transparent, proportionate and responsive to the issue and consistent with its publicly stated policies. It will also seek to ensure fair treatment when exercising its enforcement powers. Finally, it will aim to change the behaviour of the person who is
EG 19.29.3RP
1The Immigration Regulations, for the most part, mirror the FCA's investigative and sanctioning powers under the Act. The FCA has adopted procedures and policies for the use of those powers that are akin to those it has under the Act. Key features of the FCA's approach are described below.
EG 19.29.4RP
1The Immigration Regulations apply much of Part 11 of the Act. The effect of this is to apply the same procedures under the Act for appointing investigators and requiring information when investigating contraventions of the relevant provisions of the Immigration Act or the Immigration Regulations.
EG 19.29.5RP
1The FCA will notify the subject of the investigation that it has appointed investigators to carry out an investigation under the Immigration Regulations and the reasons for the appointment, unless notification is likely to result in the investigation being frustrated. In most cases, the FCA expects to carry out a scoping visit early on in the enforcement process. The FCA's policy in civil investigations under the Immigration Regulations is to use powers to
EG 19.29.7RP
1The Immigration Regulations do not require the FCA to publish procedures to commence criminal prosecutions. However, the FCA will normally follow its equivalent decision-making procedures for similar decisions under the Act, as set out in EG 12.
EG 19.29.8RP
1The Immigration Regulations apply sections 393 and 394 of the Act to warning notices and decision notices given under the Immigration Regulations and so require the FCA to give third party rights and to give access to material.
EG 19.29.9RP
1The Immigration Regulations apply the procedural provisions of Part 9 of the Act, as modified by the Immigration Regulations, in respect of matters that can be referred to the Tribunal. Referral to the Tribunal in respect of decision notices given under regulation 25(1) of the Immigration Regulations are treated as disciplinary referrals for the purpose of section 133 of the Act.
EG 19.29.11RP
1As with cases under the Act, the FCA may settle or mediate appropriate cases involving civil breaches of the Immigration Regulations to assist it to exercise its functions. DEPP 5, DEPP 6.7 and EG 5 set out information on the FCA’s settlement process and the settlement discount scheme.
SUP 10C.10.3GRP
(1) Section 59 of the Act (Approval for particular arrangements) says that a firm must take reasonable care to ensure that no one performs an FCA controlled function (including an FCA-designated senior management function) unless that person is acting in accordance with an approval given by the FCA.(2) That means that where a candidate will be performing one or more FCA-designated senior management functions, a firm must take reasonable care to ensure that the candidate does not
SUP 10C.10.4GRP
(1) If a person performs an FCA controlled function (including an FCA-designated senior management function) without approval, it is not only the firm that is accountable. Under section 63A of the Act (Power to impose penalties), if the FCA is satisfied that:(a) a person (‘P’) has at any time performed an FCA controlled function without approval; and(b) at that time P knew, or could reasonably be expected to have known, that P was performing an FCA controlled function without
SUP 10C.10.5GRP
In accordance with section 60 of the Act (Applications for approval), applications must be submitted by, or on behalf of, the firm itself, not by:(1) the FCA candidate; or(2) (where the FCA candidate works for the firm'sparent undertaking or holding company) by the firm'sparent undertaking or holding company.
SUP 10C.10.6GRP
(1) The firm that is employing the FCA candidate to perform the FCA-designated senior management function will usually make the submission itself. (SUP 10C.10.7G describes some common situations.) (2) Where a firm has outsourced the performance of an FCA-designated senior management function, the details of the outsourcing determines whom the FCA anticipates will submit the FCA-approved persons application forms.(3) The firm which is outsourcing is referred to as ‘A’ and the
SUP 10C.10.8DRP
(1) An application by a firm for the FCA's approval under section 59 of the Act (Approval for particular arrangements) for the performance of an FCA-designated senior management function must be made by completing Form A (SUP 10C Annex 2D), except where SUP 10C.10.9D requires Form E.(2) If a firm must make an application using Form A, it must use Form A (shortened form) if:(a) the person has current approved person approval to perform:(i) an FCA controlled function that is a significant
SUP 10C.10.9DRP
(1) A firm must use Form E (SUP 10C Annex 3D) where an approved person is both ceasing to perform one or more controlled functions and needs to be approved in relation to one or more FCA-designated senior management function within the same firm or group. (2) A firm must not use Form E if the approved person has never before been approved to perform for any firm:(a) an FCA controlled function that is a significant influence function;(b) an FCA-designated senior management function;
SUP 10C.10.11GRP
An application by a firm for the FCA's approval under section 59 of the Act (Approval for particular arrangements) for the performance of an FCA-designated senior management function should be accompanied by a statement of responsibilities.
SUP 10C.10.14GRP
Under section 60A of the Act, before a firm makes an application for approval, it should be satisfied that the candidate is a fit and proper person to perform the function to which the application relates. In deciding that question, the firm should have particular regard to whether the candidate, or any person who may perform a function on the candidate's behalf:(1) has obtained a qualification; (2) has undergone, or is undergoing, training; (3) possesses a level of competence;
SUP 10C.10.24GRP
The Act sets out the time that the FCA has to consider an application and come to a decision.
SUP 10C.10.30GRP
(1) Application forms must always be completed fully and honestly. Further notes on how to complete the form are contained in each form. (2) If forms are not completed fully and honestly, applications will be subject to investigation and the FCA candidate's suitability to be approved to undertake an FCA controlled function will be called into question. (3) A person who provides information to the FCA that is false or misleading may commit a criminal offence and could face prosecution
SUP 10C.10.37GRP
Under section 61(5) of the Act (Determination of applications), the firm may withdraw an application only if it also has the consent of:(1) the candidate; and(2) the person by whom the candidate is or would have been employed, if this is not the firm making the application.
EG 19.28.2RP
1The FCA's approach to taking enforcement action under the Referral Fees Regulations will mirror its general approach to enforcing the Act, as set out in EG 2. It will seek to exercise its enforcement powers in a manner that is transparent, proportionate and responsive to the issue and consistent with its publicly stated policies. It will also seek to ensure fair treatment when exercising its enforcement powers. Finally, it will aim to change the behaviour of the person who
EG 19.28.3RP
1The Referral Fees Regulations, for the most part, mirror the FCA's investigative and sanctioning powers under the Act. The FCA has adopted procedures and policies for the use of those powers that are akin to those it has under the Act. Key features of the FCA's approach are described below.
EG 19.28.4RP
1The Referral Fees Regulations apply much of Part 11 of the Act. The effect of this is to apply the same procedures under the Act for appointing investigators and requiring information when investigating contraventions of the relevant provisions of the LASPO Act or the Referral Fees Regulations.
EG 19.28.5RP
1The FCA will notify the subject of the investigation that it has appointed investigators to carry out an investigation under the Referral Fees Regulations and the reasons for the appointment, unless notification is likely to result in the investigation being frustrated. In most cases, the FCA expects to carry out a scoping visit early on in the enforcement process. The FCA's policy in civil investigations under the Referral Fees Regulations is to use powers
EG 19.28.7RP
1The Referral Fees Regulations do not require the FCA to publish procedures to commence criminal prosecutions. However, the FCA will normally follow its equivalent decision-making procedures for similar decisions under the Act, as set out in EG 12.
EG 19.28.8RP
1The Referral Fees Regulations do not require the FCA to publish procedures to apply to the court for an injunction or restitution order. However, the FCA will normally follow its equivalent decision-making procedures for similar decisions under the Act, as set out in EG 10 and EG 11.
EG 19.28.9RP
1The Referral Fees Regulations apply sections 393 and 394 of the Act to warning notices and decision notices given under the Referral Fees Regulations and so require the FCA to give third party rights and to give access to material.
EG 19.28.10RP
1The Referral Fees Regulations apply the procedural provisions of Part 9 of the Act, as modified by the Referral Fees Regulations, in respect of matters that can be referred to the Tribunal. Referral to the Tribunal in respect of decision notices given under regulation 26(1) of the Referral Fees Regulations are treated as disciplinary referrals for the purpose of section 133 of the Act.
EG 19.28.12RP
1As with cases under the Act, the FCA may settle or mediate appropriate cases involving civil breaches of the Referral Fees Regulations to assist it to exercise its functions. DEPP 5, DEPP 6.7 and EG 5 set out information on the FCA's settlement process and the settlement discount scheme.
DEPP 5.1.6GRP
The terms of any proposed settlement:(1) will be put in writing and be agreed by FCA4 staff and the person concerned;4(2) may refer to a draft of the proposed statutory notices setting out the facts of the matter and the FCA's4 conclusions; 4(3) may, depending upon the stage in the enforcement process at which agreement is reached, include an agreement by the person concerned to: (a) waive and not exercise any rights under sections 387 (Warning notices) and 394 (Access to Authority
DEPP 5.1.8BGRP
5The terms of any proposed focused resolution agreement:(1) will be put in writing and be agreed by FCA staff and the person concerned;(2) may refer to a draft of the proposed warning notice; and (3) may, depending upon the stage in the enforcement process at which agreement is reached, include an agreement by the person concerned to: (a) waive and not exercise any rights under sections 387 (Warning notices) and 394 (Access to Authority material) of the Act to notice of, or access
DEPP 5.1.8GGRP
5To use the expedited reference procedure, the person subject to enforcement action must notify the FCA that they:(1) wish to make an expedited reference to the Tribunal; and(2) waive and will not exercise any rights under section 387(2) of the Act in respect of the warning notice given (or to be given) in relation to the proposed action.
DEPP 5.1.8HGRP
5To use the expedited reference procedure before a warning notice has been given:(1) the notification set out in DEPP 5.1.8GG must be given to FCA staff; (2) the decision to issue a warning notice will then be taken by the settlement decision makers; and(3) the decision to issue a decision notice will also be taken by the settlement decision makers, taking into consideration any representations by any third party under section 393 of the Act or any interested party under section
DEPP 5.1.8IGRP
5To use the expedited reference procedure after a warning notice has been given:(1) the notification set out in DEPP 5.1.8GG must be given to the RDC; and(2) the decision to issue a decision notice will then be taken by the RDC in light of any representations by any third party under section 393 of the Act and any interested party under section 63 or 67 of the Act.
DEPP 5.1.8JGRP
5Once a decision notice has been given as part of the expedited reference procedure (whether by the settlement decision makers or the RDC), it is the responsibility of the person subject to enforcement action to seek to refer the matter to the Tribunal under the Act if they so wish. If the matter is not referred to the Tribunal within the time required under section 390(1) of the Act, the FCA will, on taking the action to which the decision notice relates, give a final notice
DEPP 5.1.8KGRP
5If FCA staff consider that it is appropriate to publish information about the matter to which a warning notice falling within section 391(1ZB) of the Act relates and is given by the settlement decision makers, they will make a recommendation to the settlement decision makers that such information should be published.
DEPP 5.1.8LGRP
5The settlement decision makers will then consider whether it is appropriate in all the circumstances to publish information about the matter to which the warning notice falling within section 391(1ZB) of the Act relates. The FCA's policy on publishing such information is set out in EG 6.
DEPP 5.1.8MGRP
5If the settlement decision makers propose that the FCA should publish information about the matter to which a warning notice falling within section 391(1ZB) of the Act relates:(1) the settlement decision makers will settle the wording of the statement it proposes the FCA should publish (warning notice statement);(2) the FCA staff will make appropriate arrangements for the warning notice statement that the settlement decisions makers propose the FCA should publish to be given
DEPP 5.1.10GRP
(1) DEPP 2.4 sets out the FCA's4 approach to giving third parties copies of statutory notices pursuant to section 393 (Third party rights) of the Act.4(2) The decision to give a warning notice or a decision notice to a third party is a statutory notice associated decision.(3) In cases therefore where the decision to give a warning notice or decision notice is taken by settlement decision makers, those decision makers will decide whether a copy of the notice should be given to
SUP 5.3.1GRP
The appointment of a skilled person to produce a report under section 166 of the Act (Reports by skilled persons) is one of the FCA's5 regulatory tools. The tool may be used:66(1) for diagnostic purposes, to identify, assess and measure risks; (2) for monitoring purposes, to track the development of identified risks, wherever these arise;(3) in the context of preventative action, to limit or reduce identified risks and so prevent them from crystallising or increasing; and (4)
SUP 5.3.2GRP
The decision by the FCA5 to require a report by a skilled person under section 166 of the Act5 (Reports by skilled persons) 6will normally be prompted by a specific requirement for information, analysis of information, assessment of a situation,4 expert advice or recommendations or by a decision to seek assurance in relation to a regulatory return4. It may4 be part of the risk mitigation programme applicable to a firm, or the result of an event or development relating or relevant
SUP 5.3.2AGRP
6The decision by the FCA5 to require the collection or updating of information by a skilled person under section 166A of the Act (Appointment of skilled person to collect and update information) will be prompted where the FCA5 considers there has been a breach of a requirement by a firm to collect, and keep up to date, information of a description specified in the FCA's5rules.
SUP 5.3.3GRP
When making the decision to require a report by a skilled person under section 166 (Reports by skilled persons) or the collection or updating of information by a skilled person under section 166A (Appointment of skilled person to collect and update information) of the Act, the FCA5 will have regard, on a case-by-case basis, to all relevant factors. Those are likely to include:66(1) circumstances relating to the firm;(2) alternative tools available, including other statutory powers;(3)
SUP 5.3.5GRP
The FCA5 will have regard to alternative tools that may be available, including for example:66(1) obtaining what is required without using specific statutory powers (for example, by a visit by staff5 of the FCA5 or a request for information on an informal basis); 66(2) requiring information from firms and others, including authorising an agent to require information, under section 165 of the Act (Power6 to require information);6(3) appointing investigators to carry out general
SUP 5.3.6GRP
The FCA5 will have regard to legal and procedural considerations including:66(1) statutory powers: whether one of the other available statutory powers is more appropriate for the purpose than the power in section 166 (Reports by skilled persons) or section 166A (Appointment of skilled person to collect and update information) of the Act;66(2) subsequent proceedings: whether it is desirable to obtain an authoritative and independent report for use in any subsequent proceedings;
SUP 5.3.7GRP
The FCA5 will have regard to the objectives of its enquiries, and the relative effectiveness of its available powers to achieve those objectives. For example:66(1) historic information or evidence: if the objectives are limited to gathering historic information, or evidence for determining whether enforcement action may be appropriate, the FCA's5 information gathering and investigation powers under sections 165 (Power to require information), 167 (Appointment of investigator
SUP 5.3.8GRP
In accordance with its general policy the FCA5 will have regard to the question of cost, which is particularly pertinent in relation to skilled persons because:66(1) if the FCA5 uses the section 166 power (Reports by skilled persons) or the section 166A power (Appointment of skilled person to collect and update information), either 6the firm will appoint, and will have to pay for the services of, the skilled person, or the FCA5 will appoint, and will require under FEES 3.2.7
SUP 5.3.9GRP
In having regard to the cost implications of using the section 166 power (Reports by skilled persons) or the section 166A power (Appointment of skilled person to collect and update information) 6alternative options (such as visits) or other powers, the FCA5 will take into account relevant factors, including:66(1) whether the firm may derive some benefit from the work carried out and recommendations made by the skilled person, for instance a better understanding of its business
DISP 3.7.2RRP
Except in relation to a “relevant complaint” within the meaning of section 404B(3) of the Act9, a8 money award may be such amount as the Ombudsman considers to be fair compensation for one or more of the following:8(1) financial loss (including consequential or prospective loss); or(2) pain and suffering; or(3) damage to reputation; or(4) distress or inconvenience;whether or not a court would award compensation.16
DISP 3.7.2AGRP
8In relation to a “relevant complaint” within the meaning of section 404B(3) of the Act9, a money award is a payment of such amount as the Ombudsman determines that a respondent should make (or should have made) to a complainant under the scheme.
DISP 3.7.4AGRP
3The effect of section 404B(5) of the Act is that the maximum award which the Ombudsman may make also applies in relation to a “relevant complaint” within the meaning of section 404B(3) of the Act.9
DISP 3.7.6GRP
16If the Ombudsman considers that fair compensation requires payment of a larger amount, he may recommend that the respondent pays the complainant the balance. The effect of section 404B(6) of the Act is that this is also the case in relation to a “relevant complaint” within the meaning of section 404B(3) of the Act.98
DISP 3.7.8RRP
16 Except in relation to a “relevant complaint” within the meaning of section 404B(3) of the Act9, an8 interest award may provide for the amount payable under the money award to bear interest at a rate and as from a date specified in the award.8
DISP 3.7.11RRP
16 Except in relation to a “relevant complaint” within the meaning of section 404B(3) of the Act9, a8 direction may require the respondent8 to take such steps in relation to the complainant as the Ombudsman considers just and appropriate (whether or not a court could order those steps to be taken).88
DISP 3.7.11AGRP
8In relation to a “relevant complaint” within the meaning of section 404B(3) of the Act9, a direction may require the respondent to take such action as the Ombudsman determines the respondent should take (or should have taken) under the scheme.
DISP 3.7.13GRP
16Under the Act, a complainant can enforce through the courts a money award registered by the Ombudsman or a direction made by the Ombudsman.