Related provisions for SYSC 4.4.2

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SYSC 4.3A.-1RRP
2In SYSC 4.3A.6 R and SYSC 4.3A.8 R a ‘CRR firm that is significant’ means a significant IFPRU firm.
SYSC 4.3A.1RRP
1A CRR firm must ensure that the management body defines, oversees and is accountable for the implementation of governance arrangements that ensure effective and prudent management of the firm, including the segregation of duties in the organisation and the prevention of conflicts of interest. The firm must ensure that the management body:(1) has overall responsibility for the firm;(2) approves and oversees implementation of the firm's strategic objectives, risk strategy and
SYSC 4.3A.2RRP
A CRR firm must ensure that the chairman of the firm's management body does not exercise simultaneously the PRA’s Chief Executive function controlled function (SMF1) or 3chief executive function within the same firm, unless justified by the firm and authorised by the FCA3.[Note: article 88(1)(e) of CRD]
SYSC 4.3A.3RRP
A CRR firm must ensure that the members of the management body of the firm: (1) are of sufficiently good repute;(2) possess sufficient knowledge, skills and experience to perform their duties;(3) possess adequate collective knowledge, skills and experience to understand the firm's activities, including the main risks;(4) reflect an adequately broad range of experiences; (5) commit sufficient time to perform their functions in the firm; and(6) act with honesty, integrity and independence
SYSC 4.3A.4RRP
A CRR firm must devote adequate human and financial resources to the induction and training of members of the management body.[Note: article 91(3) of CRD]
SYSC 4.3A.5RRP
A CRR firm must ensure that the members of the management body of the firm do not hold more directorships than is appropriate taking into account individual circumstances and the nature, scale and complexity of the firm's activities.[Note: article 91(3) of CRD]
SYSC 4.3A.6RRP
2(1) A CRR firm that is significant must ensure that the members of the management body of the firm do not hold more than one of the following combinations of directorship in any organisation at the same time:(a) one executive directorship with two non-executive directorships; and(b) four non-executive directorships. (2) Paragraph (1) does not apply to members of the management body that represent the United Kingdom.[Note: article 91(3) of CRD]
SYSC 4.3A.8RRP
A CRR firm that is significant must:(1) establish a nomination committee composed of members of the management body who do not perform any executive function in the firm;(2) ensure that the nomination committee is able to use any forms of resources the nomination committee deems appropriate, including external advice; and(3) ensure that the nomination committee receives appropriate funding. [Note: article 88(2) of CRD]
SYSC 4.3A.9RRP
A CRR firm that has a nomination committee must ensure that the nomination committee:(1) engage a broad set of qualities and competences when recruiting members to the management body and for that purpose puts in place a policy promoting diversity on the management body; (2) identifies and recommends for approval, by the management body or by general meeting, candidates to fill management body vacancies, having evaluated the balance of knowledge, skills, diversity and experience
SYSC 4.3A.10RRP
A CRR firm that does not have a nomination committee must engage a broad set of qualities and competences when recruiting members to the management body. For that purpose a CRR firm that does not have a nomination committee must put in place a policy promoting diversity on the management body.[Note: article 91(10) of CRD]
SYSC 8.1.1RRP
1A common platform firm must:(1) when relying on a third party for the performance of operational functions which are critical for the performance of regulated activities, listed activities or ancillary services (in this chapter "relevant services and activities") on a continuous and satisfactory basis, ensure that it takes reasonable steps to avoid undue additional operational risk; (2) not undertake the outsourcing of important operational functions in such a way as to impair
SYSC 8.1.3GRP
SYSC 4.1.1 R requires a firm to have effective processes to identify, manage, monitor and report risks and internal control mechanisms. Except in relation to those functions described in SYSC 8.1.5 R, where a firm relies on a third party for the performance of operational functions which are not critical or important for the performance of relevant services and activities (see SYSC 8.1.1 R (1)) on a continuous and satisfactory basis, it should take into account, in a manner that
SYSC 8.1.4RRP
For the purposes of this chapter an operational function is regarded as critical or important if a defect or failure in its performance would materially impair the continuing compliance of a common platform firm with the conditions and obligations of its authorisation or its other obligations under the regulatory system, or its financial performance, or the soundness or the continuity of its relevant services and activities.[Note: article 13(1) of the MiFID implementing Direc
SYSC 8.1.6RRP
If a firm outsources critical or important operational functions or any relevant services and activities, it remains fully responsible for discharging all of its obligations under the regulatory system and must comply, in particular, with the following conditions:2(1) the outsourcing must not result in the delegation by senior personnel of their responsibility;(2) the relationship and obligations of the firm towards its clients under the regulatory system must not be altered;(3)
SYSC 8.1.11RRP
A common platform firm must make available on request to the appropriate regulator and any other relevant competent authority all information necessary to enable the appropriate regulator and any other relevant competent authority to supervise the compliance of the performance of the outsourced activities with the requirements of the regulatory system.[Note: article 14(5) of the MiFID implementing Directive]
SYSC 10.1.4AGRP
3Other firms should take account of the rule on the types of conflicts (see SYSC 10.1.4 R) as if it were guidance (and as if "should" appeared in that rule instead of "must") as explained in SYSC 1 Annex 1.3.3 G4, except when they produce or arrange the production of investment research in accordance with COBS 12.2, or produce or disseminate non-independent research in accordance with COBS 12.3 (see SYSC 10.1.16 R).
SYSC 10.1.6AGRP
3Other firms should take account of the rule on records of conflicts (see SYSC 10.1.6 R) as if it were guidance (and as if "should" appeared in that rule instead of "must", as explained in SYSC 1 Annex 1.3.3 G4), except when they produce or arrange the production of investment research in accordance with COBS 12.2, or produce or disseminate non-independent research in accordance with COBS 12.3 (see SYSC 10.1.16 R).
SYSC 10.1.11AGRP
3Other firms should take account of the rules relating to conflicts of interest policies (see SYSC 10.1.10 R and SYSC 10.1.11 R) as if they were guidance (and as if "should" appeared in those rules instead of "must", as explained in SYSC 1 Annex 1.3.3 G4), except when they produce or arrange the production of investment research in accordance with COBS 12.2, or produce or disseminate non-independent research in accordance with COBS 12.3 (see SYSC 10.1.16 R).
SYSC 10.1.16RRP
3The rules relating to:(1) types of conflict (see SYSC 10.1.4 R);(2) records of conflicts (see SYSC 10.1.6 R); and(3) conflicts of interest policies (see SYSC 10.1.10 R and SYSC 10.1.11 R);also apply to a firm which is not a common platform firm when it produces, or arranges for the production of, investment research that is intended or likely to be subsequently disseminated to clients of the firm or to the public in accordance with COBS 12.2, and when it produces or disseminates
SYSC 5.1.1RRP
1A firm must employ personnel with the skills, knowledge and expertise necessary for the discharge of the responsibilities allocated to them.[Note:article 5(1)(d) of the MiFID implementing Directive, articles 12(1)(a) and 14(1)(c) of the UCITS Directive and article 5(1) of the UCITS implementing Directive]63
SYSC 5.1.7RRP
The senior personnel of a common platform firm must define arrangements concerning the segregation of duties within the firm and the prevention of conflicts of interest.[Note: article 88 of the CRD and 8annex V paragraph 1 of the Banking Consolidation Directive]
SYSC 5.1.13RRP
The systems, internal control mechanisms and arrangements established by a firm in accordance with this chapter must take into account the nature, scale and complexity of its business and the nature and range of financial services and activities 3undertaken in the course of that business.[Note:article 5(1) final paragraph of the MiFID implementing Directiveand articles 4(1) final paragraph and 5(4) of the UCITS implementing Directive]66
SYSC 4.1.1RRP
3(1) A firm must have robust governance arrangements, which include a clear organisational structure with well defined, transparent and consistent lines of responsibility, effective processes to identify, manage, monitor and report the risks it is or might be exposed to, and internal control mechanisms, including sound administrative and accounting procedures and effective control and safeguard arrangements for information processing systems.8(2) [deleted]1313[Note: article 74
SYSC 4.1.2RRP
For a common platform firm, the 3 arrangements, processes and mechanisms referred to in SYSC 4.1.1 R must be comprehensive and proportionate to the nature, scale and complexity of the risks inherent in the business model and of13SYSC 4.1.7 R, SYSC 5.1.7 R ,8SYSC 7 and whichever of the following as applicable:317131312817(1) (for a firm to which SYSC 19A applies) SYSC 19A (IFPRU Remuneration Code);(2) (for a full-scope UK AIFM) SYSC 19B (AIFM Remuneration Code);(3) (for a
SYSC 4.1.4RRP
A firm (with the exception of a sole trader who does not employ any person who is required to be approved under section 59 of the Act (Approval for particular arrangements))3 must, taking into account the nature, scale and complexity of the business of the firm, and the nature and range of the financial services and activities 3undertaken in the course of that business:310(1) (if it is a common platform firm or a management company)10 establish, implement and maintain decision-making
SYSC 4.1.4AGRP
3A firm that is not a common platform firm or a management company10 should take into account the decision-making procedures and effective internal reporting rules (SYSC 4.1.4R (1),10(3) and (4))10 as if they were guidance (and as if "should" appeared in those rules instead of "must") as explained in SYSC 1 Annex 1.3.3 G5.
SYSC 4.1.6RRP
A common platform firm must take reasonable steps to ensure continuity and regularity in the performance of its regulated activities. To this end the common platform firm3 must employ appropriate and proportionate systems, resources and procedures.[Note: article 13(4) of MiFID]
SYSC 4.1.8GRP
The matters dealt with in a business continuity policy should include:(1) resource requirements such as people, systems and other assets, and arrangements for obtaining these resources;(2) the recovery priorities for the firm's operations; (3) communication arrangements for internal and external concerned parties (including the appropriate regulator, clients and the press);(4) escalation and invocation plans that outline the processes for implementing the business continuity
SYSC 4.2.1RRP
The senior personnel of a common platform firm, a management company3, a full-scope UK AIFM,5 or of the UK branch of a non-EEA bank1must be of sufficiently good repute and sufficiently experienced as to ensure the sound and prudent management of the firm.[Note: article 9(1) of MiFID, article 7(1)(b) of the UCITS Directive3 article 8(1)(c) of AIFMD5, article 11(1) second paragraph of the Banking Consolidation Directive and article 13(1) of the CRD4]
SYSC 4.2.2RRP
A common platform firm, a management company, a full-scope UK AIFM53 and the UK branch of a non-EEA bank1must ensure that its management is undertaken by at least two persons meeting the requirements laid down in SYSC 4.2.1 R and, for a full-scope UK AIFM, SYSC 4.2.7 R5.[Note: article 9(4) first paragraph of MiFID, article 7(1)(b) of the UCITS Directive3, article 8(1)(c) of AIFMD5and article 13(1) of CRD]66
SYSC 4.2.4GRP
At least two independent minds should be applied to the formulation and implementation of the policies of a common platform firm, a management company3, a full-scope UK AIFM5 and the UK branch of a non-EEA bank1. Where a firm1 nominates just two individuals to direct its business, the appropriate regulator will not regard them as both effectively directing the business where one of them makes some, albeit significant, decisions relating to only a few aspects of the business.
SYSC 4.2.5GRP
Where there are more than two individuals directing the business of a common platform firm, a management company3, a full-scope UK AIFM5 or the UK branch of a non-EEA bank,1 the appropriate regulator does not regard it as necessary for all of these individuals to be involved in all decisions relating to the determination of strategy and general direction. However, at least two individuals should be involved in all such decisions. Both individuals' judgement should be engaged
SYSC 4.2.6RRP
If a common platform firm, (other than a credit institution or AIFM investment firm5) or the UK branch of a non-EEA bank1, is:1(1) a natural person; or(2) a legal person managed by a single natural person; it must have alternative arrangements in place which ensure sound and prudent management of the firm.[Note: article 9(4) second paragraph of MiFID]
SYSC 9.1.-2RRP
[deleted]1
SYSC 9.1.1RRP
A firm must arrange for orderly records to be kept of its business and internal organisation, including all services and transactions undertaken by it, which must be sufficient to enable the appropriate regulator or any other relevant competent authority under MiFID or the UCITS Directive4 to monitor the firm's compliance with the requirements under the regulatory system, and in particular to ascertain that the firm has complied with all obligations with respect to clients.[Note: article
SYSC 9.1.2RRP
A common platform firm3must retain all records kept by it under this chapter in relation to its MiFID business for a period of at least five years.[Note: article 51 (1) of the MiFID implementing Directive]3
SYSC 9.1.6GRP
Schedule 1 to each module of the Handbook sets out a list summarising the record-keeping requirements of that module.11[Note: article 51(3) of MiFID implementing Directive]
SYSC 6.1.4ARRP
(1) 4A firm which is not a common platform firm or management company8 and which carries on designated investment business with or for retail clients or professional clients must allocate to a director or senior manager the function of:(a) having responsibility for oversight of the firm's compliance; and(b) reporting to the governing body in respect of that responsibility.(2) In SYSC 6.1.4A R (1) compliance means compliance with the rules in:(a) COBS (Conduct of Business sourcebook);(b)
SYSC 6.1.7RRP
(1) 9This rule applies to a common platform firm conducting investment services and activities from a branch in another EEA State.(2) References to the regulatory system in SYSC 6.1.1R, SYSC 6.1.2 R and SYSC 6.1.3 R apply in respect of a firm'sbranch as if regulatory system includes a Host State's requirements under MiFID and the MiFID implementing Directive which are applicable to the investment services and activities conducted from the firm'sbranch.[Note: article 13(2) of
SYSC 7.1.4RRP
The management body13 of a common platform firm must approve and periodically review the strategies and policies for taking up, managing, monitoring and mitigating the risks the firm is or might be exposed to, including those posed by the macroeconomic environment in which it operates in relation to the status of the business cycle.[Note: 13article 76(1) of CRD]1313
SYSC 7.1.4AGRP
For a common platform firm included within the scope of SYSC 20 (Reverse stress testing), the strategies, policies and procedures for identifying, taking up, managing, monitoring and mitigating the risks to which the firm is or might be exposed include conducting reverse stress testing in accordance with SYSC 20. A common platform firm which falls outside the scope of SYSC 20 should consider conducting reverse stress tests on its business plan as well. This would further senior
SYSC 7.1.8GRP
2(1) [deleted]1313(2) The term 'risk management function' in SYSC 7.1.6 R and SYSC 7.1.7 R refers to the generally understood concept of risk assessment within a firm, that is, the function of setting and controlling risk exposure.32917(3) For a firm that is not a relevant authorised person, the risk management function is not a controlled function itself, but is part of the systems and controls function or the PRA's systems and controls controlled function (CF28).17(4) For a
SYSC 19A.2.2GRP
(1) If a firm'sremuneration policy is not aligned with effective risk management it is likely that employees will have incentives to act in ways that might undermine effective risk management.(2) The Remuneration Code covers all aspects of remuneration that could have a bearing on effective risk management including salaries, bonuses, long-term incentive plans, options, hiring bonuses, severance packages and pension arrangements. In applying the Remuneration Code, a firm should
SYSC 1.4.2RRP
A contravention of a rule in SYSC 11 to 2SYSC 213 does not give rise to a right of action by a private person under section 138D of the Act (and each of those rules is specified under section 138D(3) of the Act as a provision giving rise to no such right of action). 344
COBS 6.1.4RRP
A firm must provide a retail client with the following general information, if relevant:(1) the name and address of the firm, and the contact details necessary to enable a client to communicate effectively with the firm;(2) in the case of MiFID or equivalent third country business, the languages in which the client may communicate with the firm, and receive documents and other information from the firm;(3) the methods of communication to be used between the firm and the client
SUP 10A.7.2GRP
In requiring someone to apportion responsibility, neither4 a common platform firm nor a Solvency II firm4 or small non-directive insurer5 should 4apply for that person or persons to be FCA-approved to perform the apportionment and oversight function (see SUP 10A.7.1 R, SYSC 2.1.3 R and SYSC 1 Annex 1).
SYSC 4.3.1RRP
Afirm (with the exception of a sole trader who does not employ any person who is required to be approved under section 59 of the Act (Approval for particular arrangements)),2 when allocating functions internally, must ensure that senior personnel and, where appropriate, the supervisory function, are responsible for ensuring that the firm complies with its obligations under the regulatory system1. In particular, senior personnel and, where appropriate, the supervisory function
SYSC 6.2.2GRP
(1) The term 'internal audit function' in SYSC 6.2.1R (and SYSC 4.1.11G) refers to the generally understood concept of internal audit within a firm, that is, the function of assessing adherence to and the effectiveness of internal systems and controls, procedures and policies.6(2) 6For a firm that is not a relevant authorised person, the internal audit function is not a controlled function itself, but is part of the systems and controls function or the PRA's systems and controls
SYSC 19D.2.2GRP
(1) The dual-regulated firms Remuneration Code covers all aspects of remuneration that could have a bearing on effective risk management, including salaries, bonuses, long-term incentive plans, options, hiring bonuses, severance packages and pension arrangements.(2) As with other aspects of a firm's systems and controls, in accordance with SYSC 4.1.2R (general organisational requirements) remuneration policies, procedures and practices must be comprehensive and proportionate to
SYSC 3.1.6RRP
2A firm which is not a common platform firm must employ personnel with the skills, knowledge and expertise necessary for the discharge of the responsibilities allocated to them.