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Application provision

1.1 Unless stated otherwise, this Part applies to every firm.

 

1

Application and Definitions

1.1

02/04/2015

Unless stated otherwise, this Part applies to every firm.

 

1.2

03/01/2018

In this Part, the following definitions shall apply:

consumer

has the meaning given in the FCA Handbook for the purposes of the FCA’s rule in GEN 4.4.1(1)(a)(i).

customer

has the meaning given in the FCA Handbook for the purposes of the FCA’s rules in GEN 4.4.1R(1)(a)(ii) and GEN 4.5.1R(1).

equivalent business of a third country investment firm

the business of a third country investment firm carried on from an establishment in the UK that would be MiFID business if that firm were a MiFID investment firm.

financial penalty

means a financial penalty that the PRA has imposed, or may impose, under FSMA. It does not include a financial penalty imposed by any other body.

GEN

means the part of the FCA Handbook in High Level Standards which has the title General Provisions.

habitual residence

    1. (1) if the policyholder is an individual, the address given by the policyholder as his residence if it reasonably appears to be a residential address and there is no evidence to the contrary; or
    2. (2) if the policyholder is not an individual or a group of individuals, the State in which the policyholder has its place of establishment, or, if it has more than one, its relevant place of establishment.

home finance transaction

has the meaning given in the FCA Handbook.

incoming ECA provider

has the meaning given in the FCA Handbook.

MiFID or equivalent third country business

MiFID business or the equivalent business of a third country investment firm.

non-investment insurance contract

has the meaning given in the FCA Handbook.

regulated market

has the meaning given in Article 4(1)(21) of MiFID II.

State of the risk

means references to the EEA State in which a risk is situated in accordance with paragraphs 6(3) and 6(4) of Schedule 12 to FSMA.

UK domestic firm

means a firm that has its registered office (or, if it has no registered office, its head office) in the UK.

2

Emergency

2.1

02/04/2015

This Chapter applies to every person to whom a PRA rule applies.

2.2

02/04/2015

  1. (1) If any emergency arises which:
    1. (a) makes it impracticable for a person to comply with a particular PRA rule;
    2. (b) could not have been avoided by the person taking all reasonable steps; and
    3. (c) is outside the control of the person, its associates and agents (and of its and their employees),
  2.       the person will not be in contravention of that rule to the extent that, in consequence of the emergency, compliance with that rule is impracticable.
  3. (2) (1) applies only for so long as:
    1. (a) the consequences of the emergency continue; and
    2. (b) the person can demonstrate that it is taking all practicable steps to deal with those consequences, to comply with the rule, and to mitigate losses and potential losses to its clients (if any).
  4. (3) The person must notify the PRA as soon as practicable of the emergency and of the steps the person is taking and proposes to take to deal with the consequences of the emergency.

3

Disclosure to Retail Clients

3.1

02/04/2015

This Chapter:

  1. (1) subject to (2), applies to:
    1. (a) every firm and with respect to every regulated activity;
    2. (b) activities carried on from an establishment maintained by the firm (or by its appointed representative) in the UK;
    3. (c) letters delivered by hand, sent by post and sent by fax and also electronic mail;
    4. (d) letters sent by any of the firm’s employees, which includes its appointed representatives and their employees.
  2. (2) does not apply to:
    1. (a) an incoming ECA provider when the firm is acting as such;
    2. (b) an incoming EEA firm which has permission only for cross border services and which does not carry on regulated activities in the UK;
    3. (c) an incoming firm not falling under (a) or (b), to the extent that the firm is subject to equivalent rules imposed by its home Member State;
    4. (d) MiFID or equivalent third country business;
    5. (e) general insurance business if:
      1. (i) the State of the risk is an EEA State other than the UK; or
      2. (ii) the State of the risk is outside the EEA and the policyholder is not in the UK when the contract of insurance is entered into;
    6. (f) long-term insurance business if:
      1. (i) the policyholder’s habitual residence is in an EEA State other than the UK; or
      2. (ii) the policyholder’s habitual residence is outside the EEA and is not present in the UK when the contract of insurance is entered into; or
    7. (g) text messages, account statements, business cards or compliment slips (used as such).

3.2

02/04/2015

A firm must take reasonable care to ensure that every letter (or electronic equivalent) which it or its employees send to a retail client, with a view to or in connection with the firm carrying on a regulated activity, includes the following disclosure:

  1. (1) for a UK domestic firm, "Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority";
  2. (2) for an overseas firm (which is not an incoming firm), "[Authorised and regulated by [name of the overseas regulator of the overseas firm in the jurisdiction of that overseas firm’s registered office (or, if it has no registered office, its head office)]]. Authorised by the Prudential Regulation Authority. Subject to regulation by the Financial Conduct Authority and limited regulation by the Prudential Regulation Authority. Details about the extent of our regulation by the Prudential Regulation Authority are available from us on request."
    1. (a) If the overseas firm (which is not an incoming firm) translates the name of the overseas regulator into English it must ensure that the State in which the regulator is based is clear;
    2. (b) An overseas firm (which is not an incoming firm) is not required to disclose its applicable authorisation or regulation by the overseas regulator if it is not so authorised or regulated.
  3. (3) for an incoming firm without a top-up permission either:
    1. (a) "Authorised by [name of home Member State regulator]"; or
    2. (b) "Authorised by [name of home Member State regulator] and subject to limited regulation by the Financial Conduct Authority and Prudential Regulation Authority. Details about the extent of our regulation by the Financial Conduct Authority and Prudential Regulation Authority are available from us on request".
    3. If the incoming firm without a top-up permission:
    4. (c) translates the name of the home Member State regulator into English it must ensure that the State in which the regulator is based is clear;
    5. (d) indicates or implies to a customer that is regulated by the PRA or the FCA, it must make the disclosure in (b).
  4. (4) for an incoming firm with a top-up permission, "Authorised by [name of home Member State regulator] and the Prudential Regulation Authority and subject to limited regulation by the Financial Conduct Authority and Prudential Regulation Authority. Details about the extent of our authorisation and regulation by the Prudential Regulation Authority, and regulation by the Financial Conduct Authority are available from us on request";
  5.       If the incoming firm with a top-up permission translates the name of the home Member State regulator into English it must ensure that the State in which the regulator is based is clear.
  6. (5) for an appointed representative of a firm, "[Name of appointed representative] is an appointed representative of [name of firm] which is [then continue with the required disclosure of the firm]".
  7.       If the appointed representative has more than one principal, the disclosure must relate to the principal or principals responsible for the regulated activity or regulated activities concerned. The required disclosure of the firm is that which would apply were the firm to make the disclosure under the rules applicable to the firm.
  8. (6) for the Society, “Authorised under the Financial Services and Markets Act 2000".

3.3

02/04/2015

If a firm offers to make details about the extent of its authorisation by the PRA or regulation by the FCA or PRA available on request and a customer requests such details, it must provide those details in a way that is clear, fair and not misleading.

3.4

02/04/2015

Any person to which this Chapter applies is permitted to add words to the relevant required disclosure statement but only if the person has taken reasonable steps to satisfy itself that the presentation of its statutory status will, as a consequence, be fair, clear and not misleading and be likely to be understood by the average member of the group to whom it is directed or by whom it is likely to be received.

4

Referring to Approval by the PRA

4.1

02/04/2015

This Chapter applies to every firm and with respect to the carrying on of both regulated activities and activities that are not regulated activities.

4.2

02/04/2015

  1. (1) Unless required to do so under the regulatory system, a firm must ensure that neither it nor anyone acting on its behalf claims in any way that any aspect of its affairs have the approval or endorsement of the PRA or another competent authority.
  2. (2) (1) does not apply to statements that explain, in a way that is fair, clear and not misleading, that:
    1. (a) the firm is an authorised person;
    2. (b) the firm has permission to carry on a specific activity;
    3. (c) the firm’s approved persons have been approved by the PRA for the purposes of section 59 of FSMA (Approval for particular arrangements); or
    4. (d) the firm has been given express written approval by the PRA in respect of a specific aspect of the firm’s affairs.

5

Statements About Authorisation and Regulation by the PRA

5.1

02/04/2015

This Chapter:

  1. (1) subject to (2), applies to: 
    1. (a) every firm and with respect to every regulated activity
    2. (b) activities carried on from an establishment maintained by the firm (or by its appointed representative) in the UK, provided that, in the case of the MiFID business of an incoming EEA firm, it only applies to business conducted within the territory of the UK
    3. (c) communicating with a customer.
  2. (2) does not apply to: 
    1. (a) an incoming ECA provider when the firm is acting as such; 
    2. (b) an incoming EEA firm which has permission only for cross border services and which does not carry on regulated activities in the UK
    3. (c) an incoming firm not falling under (a) or (b), to the extent that the firm is subject to equivalent rules imposed by its home Member State
    4. (d) MiFID or equivalent third country business that is a transaction:
      1. (i) between an MTF operator and a member of participant in relation to the use of the MTF;
      2. (ii) concluded under the rules governing an MTF between members or participants of the MTF, unless the member or participant is, acting on its client’s behalf, executing the client’s orders on an MTF; or
      3. (iii) concluded on a regulated market by members or participants of the regulated market, unless the member or participant is, acting on its client’s behalf, executing the client’s orders on a regulated market.

5.2

02/04/2015

A firm must not indicate or imply that it is authorised by the PRA in respect of business for which it is not so authorised.

5.3

02/04/2015

A firm must not indicate or imply that it is regulated or otherwise supervised by the PRA in respect of business for which it is not regulated by the PRA.

6

Disclosure to Retail Clients on Activities from Non-UK Establishments

6.1

02/04/2015

This Chapter:

  1. (1) subject to (2), applies to every firm and with respect to every regulated activity, in any communication:
    1. (a) made to:
      1. (i) (in relation to a non-investment insurance contract) a consumer;
      2. (ii) (in relation to a home finance transaction) a customer; or
      3. (iii) (in all other cases) a retail client; and
    2. (b) in connection with a regulated activity carried on from an establishment of the firm (or its appointed representative) that is not in the UK;
  2. (2) does not apply to:
    1. (a) an incoming ECA provider when the firm is acting as such;
    2. (b) an incoming EEA firm which has permission only for cross border services and which does not carry on regulated activities in the UK;
    3. (c) an incoming firm not falling under (a) or (b), to the extent that the firm is subject to equivalent rules imposed by its home Member State;
    4. (d) MiFID or equivalent third country business.

6.2

02/04/2015

If the firm indicates that it is a PRA-authorised person it must also, where relevant, and with equal prominence, indicate in writing that in some or all respects the regulatory system applying will be different from that of the UK. The firm may also indicate the protections and complaints or compensation arrangements available under another relevant system of regulation.

6.3

02/04/2015

A firm need not provide the information required by 6.2 if it has already provided it in writing to the customer to whom the communication is made.

7

Insurance Against Financial Penalties

7.1

02/04/2015

This Chapter applies to every firm, but only with respect to business that can be regulated under section 137G of FSMA.

7.2

02/04/2015

No firm may pay a financial penalty imposed on a present or former employee, director or partner of the firm or of an affiliated company.

7.3

02/04/2015

No firm may enter into, arrange, claim on or make a payment under a contract of insurance that is intended to have, or has or would have, the effect of indemnifying any person against all or part of a financial penalty.

7.4

02/04/2015

The Society and managing agents must not cause or permit any member, in the conduct of that member’s insurance business at the Society, to enter into, arrange, claim on or make a payment under a contract of insurance that is intended to have, or has or would have, the effect of indemnifying any person against all or part of a financial penalty.