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Application provision

1.1 Unless otherwise stated, this Part applies to a CRR firm:

  1. (1) with respect to the carrying on of the following from an establishment in the UK:
    1. (a) regulated activities;
    2. (b) activities that constitute dealing in investments as principal, disregarding the exclusion in article 15 of Regulated Activities Order;
    3. (c) ancillary activities;
    4. (d) in relation to MiFID business, ancillary services; and
    5. (e) unregulated activities in a prudential context;
  2. (2) with respect to the carrying on of passported activities by it from a branch in another EEA state;
  3. (3) in a prudential context with respect to activities wherever they are carried on; and
  4. (4) taking into account any activity of other members of a group of which the firm is a member.

1

Application and Definitions

1.1

03/01/2018

Unless otherwise stated, this Part applies to a CRR firm:

  1. (1) with respect to the carrying on of the following from an establishment in the UK:
    1. (a) regulated activities;
    2. (b) activities that constitute dealing in investments as principal, disregarding the exclusion in article 15 of Regulated Activities Order;
    3. (c) ancillary activities;
    4. (d) in relation to MiFID business, ancillary services; and
    5. (e) unregulated activities in a prudential context;
  2. (2) with respect to the carrying on of passported activities by it from a branch in another EEA state;
  3. (3) in a prudential context with respect to activities wherever they are carried on; and
  4. (4) taking into account any activity of other members of a group of which the firm is a member.

1.2

03/01/2018

In this Part, the following definitions shall apply:

Articles 30, 31 Outsourcing Requirements 

means requirements and obligations as set out in Articles 30 and 31(Outsourcing) of the MODR.

authorisation

means authorisation as an authorised person for the purposes of FSMA.

control

means control as defined in Article 1 of the Seventh Council Directive 83/349/EEC (The Seventh Company Law Directive).

listed activities

means an activity listed in Annex 1 to the CRD.

other matters

means, in relation to a requirement under the MODR, matters within the scope of 1.1 that are not within the scope of that requirement.

relevant services and activities

means regulated activities, listed activities or ancillary services.

2

Outsourcing

2.1

03/01/2018

A firm must:

  1. (1) when relying on a third party for the performance of operational functions which are critical for the performance of relevant services and activities on a continuous and satisfactory basis, ensure that it takes reasonable steps to avoid undue additional operational risk; and
  2. (2) not undertake the outsourcing of important operational functions in such a way as to impair materially:
    1. (a) the quality of its internal control; and
    2. (b) the ability of the PRA to monitor the firm’s compliance with all obligations under the regulatory system and, if different, of a competent authority to monitor the firm’s compliance with all obligations under MiFID II.

Additional Notes


[Note: Article 16(5) first paragraph of MiFID II]

2.1A

03/01/2018

A MiFID investment firm must extend the arrangements and meet the requirements of the Articles 30, 31 Outsourcing Requirements, so they apply with respect to other matters on the following basis: 

  1. (1) references to “authorisation” under MiFID II are references to authorisation under section 31(2) of the Act;
  2. (2) references to “obligations under MiFID II are references to a firm’s obligations under the regulatory system
  3. (3) references to “investment services and activities” are references to relevant services and activities;
  4. (4) references to “client” includes anyone who is a client; and 
  5. (5) references to “competent authority” are references to the PRA or the FCA acting other than in the capacity of a competent authority for the purposes of MiFID II or CRR

 

2.1B

03/01/2018

A firm that is not a MiFID investment firm must comply with the Articles 30, 31 Outsourcing Requirements on the basis set out in 2.1A and as if references to “investment firm“ refer to a firm.