Qualifying for authorisation under the Act

Part

AUTH Authorisation (to see AUTH derivations and destinations tables, go to Useful links)

Chapter

Qualifying for authorisation under the Act

Printed on: 01/11/2024

Rulebook at: 21/04/2005

AUTH 5

Qualifying for authorisation under the Act

AUTH 5.1

Application and purpose

01/12/2004

AUTH 5.1.1

(1) This chapter applies to an EEA firm that wishes to exercise an entitlement to establish a branch in, or provide cross border services into, the United Kingdom under a Single Market Directive. (The Act refers to such an entitlement as an EEA right and its exercise is referred to in the Handbook as "passporting"). (See SUP App 3 (Guidance on passporting issues) for further guidance on passporting).

(2) The chapter also applies to:

(a) a Treaty firm that wishes to exercise rights under the Treaty in respect of regulated activities not covered by the Single Market Directives and qualify for authorisation under Schedule 4 to the Act (Treaty Rights); and

(b) a UCITS qualifier, that is, an operator, trustee or depositary of a recognised collective investment scheme, constituted in another EEA State, and which qualifies for authorisation under Schedule 5 to the Act (Persons concerned in collective investment schemes).

(3) The provisions implementing the Single Market Directives are within the coordinated field (see AUTH 2.9.18 G (1) ). So, where an incoming ECA provider intends to provide electronic commerce activity that consist of activities that fall within one of the Single Market Directives, the passporting requirements on exercising an EEA right in this chapter will apply.

01/07/2003

AUTH 5.1.2

This chapter does not apply to:

(1) an EEA firm that wishes to carry on in the United Kingdom activities which are outside the scope of its EEA right and the scope of a permission granted under Schedule 4 to the Act; in this case the EEA firm requires a "top-up permission" under Part IV of the Act and `should refer to AUTH 3 (Applications for Part IV permission); or

(2) a person participating in a community co-insurance operation by the provision of services and otherwise than as leading insurer, carrying on any insurance activity; by virtue of Article 11 of the Regulated Activities Order Community co-insurance operation is treated as authorised on completion by the leading insurer of the requirements of Schedule 3 to the Act.

(3) a Treaty firm that wishes to provide electronic commerce activities into the United Kingdom.

21/08/2002

AUTH 5.1.3

(1) Under The Gibraltar Order made under section 409 of the Act (Gibraltar), a Gibraltar firm is treated as an EEA firm under Schedule 3 to the Act if it is:

(a) authorised in Gibraltar under the Insurance Directives; or

(b) authorised in Gibraltar under the Banking Consolidation Directives.

(2) A Gibraltar insurance company is allowed to passport its services into the United Kingdom if it complies with the relevant notification procedures. Similarly, a Gibraltar credit institution is allowed to passport into the United Kingdom to provide banking services provided those services fall within items 1 to 6 in Annex 1 to the Banking Consolidation Directive. So, any references in this chapter to EEA State or EEA right include references to Gibraltar and the entitlement under the Gibraltar Order where appropriate.

(3) The entitlement in the Gibraltar Order does not, however, extend to investment services as Gibraltar investment firms have not been granted the right to passport into the United Kingdom.

01/12/2001

Purpose

AUTH 5.1.4

(1) This chapter explains how an EEA firm and a Treaty firm can qualify for authorisation under Schedules 3 and 4 to the Act and how a UCITS qualifier is authorised under Schedule 5 to the Act.

(2) This chapter also provides guidance on Schedule 3 to the Act for an incoming EEA firm that wishes to establish a branch in the United Kingdom instead of, or in addition to, providing cross border services into the United Kingdom or vice versa.

01/12/2001

AUTH 5.1.5

(1) EEA firms should note that the chapter only addresses the procedures which the FSA will follow under the Act after it has received a consent notice or been notified of an EEA firm's intentions by its Home State regulator. So, an EEA firm should consider this guidance in conjunction with the requirements with which it will have to comply in its Home State.

(2) The guidance in this chapter represents the FSA's interpretation of the Single Market Directives the Act and the secondary legislation made under the Act. The guidance is not exhaustive and should not be seen as a substitute for a person consulting the legislation or taking legal advice.

21/02/2002

AUTH 5.2

EEA firms and Treaty firms

01/12/2004

AUTH 5.2.1

A person will only be an EEA firm or a Treaty firm if it has its head office in an EEA State other than the United Kingdom. EEA firms and Treaty firms are entitled to exercise both the right of establishment and the freedom to provide services under the Treaty. The difference, however, is that an EEA firm has a right to passport under a Single Market Directive, whereas a Treaty firm carries on activities which do not fall within the scope of a Single Market Directive. An EEA firm may also be a Treaty firm if it carries on such activities. A person may be a Treaty firm, where, for example, it carries on business that:

(1) comprises regulated activities, such as reinsurance, which are not covered by any Single Market Directives; or

(2) includes regulated activities which do not fall within the scope of the Single Market Directive under which it is entitled to exercise an EEA right.

01/12/2001

AUTH 5.2.2

An EEA firm may passport those activities which fall within the scope of the relevant Single Market Directive as long as they are included in its Home State authorisation.

01/12/2001

AUTH 5.3

Qualification for authorisation under the Act

01/12/2004

EEA firms

AUTH 5.3.1

Section 31 of the Act (Authorised persons) states that an EEA firm is authorised for the purposes of the Act if it qualifies for authorisation under Schedule 3 to the Act (EEA Passport Rights). Under paragraph 12 of Part II of that Schedule, an EEA firm qualifies for authorisation if:

(1) it is seeking to establish a branch in the United Kingdom in exercise of an EEA right and satisfies the establishment conditions (see AUTH 5.4.2 G); or

(2) it is seeking to provide cross border services into the United Kingdom in exercise of an EEA right and satisfies the service conditions (see AUTH 5.5.3 G).

01/12/2001

AUTH 5.3.2

(1) On qualifying for authorisation, subject to AUTH 5.3.2 G (1A), an EEA firm will have permission to carry on each permitted activity (see (2) below) which is a regulated activity:

(a) through its UK branch (if it satisfies the establishment conditions); or
(b) by providing cross border services into the United Kingdom (if it satisfies the service conditions).

(1A)

(a) Paragraph (1) does not apply to the activity of dealing in units in a collective investment scheme in the United Kingdom where:

(i) the firm is an EEA UCITS management company;
(ii) the firm satisfies the establishment conditions in AUTH 5.4.2 G; and
(iii) the FSA notifies the EEA firm and the EEA firm's Home State regulator that the way in which it intends to market a relevant scheme in the United Kingdom does not comply with the law in force in the United Kingdom.

(b) The FSA's notice under (1A)(a)(iii) has to be given to the EEA firm within two months of receiving the consent notice (AUTH 5.4.2 G(1)) and will be similar to a warning notice.
(c) For details of the FSA's procedures for the giving of warning notices and references to the Tribunal, see DEC 2.2 (Statutory notice procedure: Warning notice and decision notice procedure) and DEC 5 (References to the Tribunal, publication and services of notices).

(2) The permitted activities of EEA firm are those activities identified in the consent notice, regulator's notice or notice of intention. Permitted activities may include activities that are within the scope of a Single Market Directive but which are unregulated activity in the United Kingdom.
(3) Paragraph 15(2) of Part II of Schedule 3 to the Act states that this permission is treated as being on terms equivalent to those appearing in the consent notice, regulator's notice or notice of intention. For example, it will reflect any limitations or requirements which are included in the firm's Home State authorisation.

13/02/2004

AUTH 5.3.3

An EEA firm which has qualified for authorisation is referred to in the Handbook as an incoming EEA firm.

01/12/2001

Treaty firms

AUTH 5.3.4

Under section 31 of the Act, a Treaty firm is authorised for the purposes of the Act if it qualifies for authorisation under Schedule 4 (Treaty Rights), that is:

(1) the Treaty firmis seeking to carry on a regulated activity; and

(2) the conditions set out in paragraph 3(1) of Schedule 4 to the Act are satisfied.

01/12/2001

AUTH 5.3.5

The conditions in paragraph 3(1) of Schedule 4 to the Act are that:

(1) the Treaty firm has received authorisation under the law of its Home State to carry on the regulated activities it seeks to carry on (under paragraph 3(2)). A Treaty firm is not to be regarded as so authorised unless its Home State regulator has so informed the FSA in writing); and

(2) the relevant provisions of the law of the firm's Home State:

(a) afford equivalent protection (see AUTH 5.3.6 G); or

(b) satisfy the conditions laid down by a Community instrument for the co-ordination or approximation of laws, regulations, or administrative provisions of EEA States relating to the carrying on of that activity; and

(3) the Treaty firm has no EEA right to passport in relation to that activity under one of the Single Market Directives in respect of that activity.

01/12/2001

AUTH 5.3.6

Paragraph 3(3) of Schedule 4 to the Act states that Home State provisions afford equivalent protection if, in relation to the Treaty firm carrying on of the regulated activity, they afford consumers protection which is at least equivalent to that afforded by or under the Act in relation to that activity. A certificate issued by the Treasury that the provisions of the law of a particular EEA State afford equivalent protection in relation to the activities specified in the certificate is conclusive evidence of that fact.

01/12/2001

AUTH 5.3.7

On qualifying for authorisation a Treaty firm will have permission to carry on each permitted activity which is a regulated activity. This permission will be treated on the same terms as those which apply to the Treaty firm's Home State authorisation. For example, it will reflect any limitations or requirements which are included in the firm's Home State authorisation.

01/12/2001

AUTH 5.3.8

The effect of paragraph 5(1) and 5(2) of Schedule 4 to the Act is that a Treaty firm which qualifies for authorisation under that Schedule must, at least seven days before it carries on any of the regulated activities covered by its permission, give the FSA written notice of its intention to do so. Failure to do so is a criminal offence under paragraph 6(1) of that Schedule.

01/12/2001

AUTH 5.3.9

(1) A notice from a Treaty firm under paragraph 5 (2) of the Schedule 4 to the Act must be given in writing in the manner directed, and with the information required, in the information pack provided by the FSA.

(2) The notice must be:

(a) given to a member of, or addressed for the attention of, the Enquiries and Application Department (Applications team); and

(b) delivered to the FSA by one of the methods in (3).

(3) The notice may be delivered by:

(a) post to the address in AUTH 5.3.11 G below; or

(b) leaving the application at the address in AUTH 5.3.11 G below and obtaining a time-stamped receipt; or

01/07/2003

AUTH 5.3.10

(1) The information pack required by AUTH 5.3.9 D should be accompanied by confirmation of the Treaty firm's authorisation from the Home State regulator, as referred to in AUTH 5.3.5 G (1).

(2) An information pack may be obtained from the Authorisation and Approvals Department (Authorisation teams).

01/07/2003

AUTH 5.3.11

(1) To contact the Authorisation and Approvals Department (Authorisation teams):

(a) telephone on +4420 7066 3954 or fax on +4420 7066 xxxx; or

(b) write to: Authorisation and Approvals Department (Authorisation teams), The Financial Services Authority, 25 The North Colonnade, Canary Wharf, London, E14 5HS; or

01/07/2003

AUTH 5.3.12

(1) The guidance in AUTH 2 (Authorisation and regulated activities) is relevant to Treaty firms to help them determine if they require authorisation under the Act.

(2) A Treaty firm which qualifies for authorisation is referred to in the Handbook as an incoming Treaty firm. It has, for each regulated activity for which the conditions in AUTH 5.3.5 G are satisfied, permission, under paragraph 4 of Schedule 4 to theAct, to carry it on through its UK branch or by providing cross border services into the United Kingdom.

01/12/2001

AUTH 5.3.13

(1) An EEA firm that is carrying on both direct insurance and reinsurance business will be entitled to passport under Schedule 3 to the Act in relation to the direct insurance business. It will also have a Treaty right under Schedule 4 to the Act. Such EEA firms are advised to discuss their particular circumstances with the Enquiries and Applications Department (Applications team) before sending in their notification under AUTH 5.5.3 G.

(2) An insurance company with its head office in an EEA State other than the United Kingdom that is carrying on pure reinsurance business in that State, and which wishes to carry on such business in the United Kingdom, is advised to discuss its particular requirements with the Enquiries and Applications Department (Applications team). It may be entitled to exercise a Treaty right provided it satisfies the conditions in paragraph 3(1) of Schedule 4 to the Act (see AUTH 5.3.5 G). Otherwise, it will have to seek a Part IV permission (see AUTH 3 (Applications for Part IV Permission)).

01/07/2003

UCITS qualifiers

AUTH 5.3.14

Under Schedule 5 to the Act (Persons concerned in collective investment schemes), a person who for the time being is an operator, trustee or depository of a scheme which is a recognised scheme under section 264 of the Act is an authorised person. Such a person is referred to in the Handbook as a UCITS qualifier.

01/12/2001

AUTH 5.3.15

A UCITS qualifier has permission under paragraph 2 of Schedule 5 to the Act, to carry on, as far as is appropriate to the capacity in which it acts in relation to the scheme:

(1) the establishing, operating or winding up of a collective investment scheme, and

(2) any activity in connection with, or for the purposes of, the scheme.

01/07/2003

AUTH 5.3.16

A UCITS qualifier should refer to COLLG or to the following sections of COLL and CIS for requirements for recognised schemes:

(1) COLLG 9.2.1G and CIS 16.1.8 G for guidance on notifications;

(2) COLLG 9.2.1G and CIS 17.2 for guidance on information and documentation requirements; and

(3) COLL 9.4 and CIS 17.4 which includes guidance on what facilities need to be maintained.

01/04/2004

AUTH 5.4

EEA firms establishing a branch in the United Kingdom

01/12/2004

What constitutes a branch?

AUTH 5.4.1

There is guidance for UK firms in SUP 13 Annex X [to be added later] on what constitutes a branch. EEA firms may find this of interest although they should follow the guidance of their Home State regulators.

01/12/2001

The conditions for establishing a branch

AUTH 5.4.2

Before an EEA firm exercises an EEA right to establish a branch in the United Kingdom other than under the Insurance Mediation Directive, the Act requires it to satisfy the establishment conditions, as set out in paragraph 13(1), Part II of Schedule 3 to the Act (EEA Rights). These conditions are that:

(1) the FSA has received notice (a consent notice) from the EEA firm's Home State regulator that it has given the EEA firm consent to establish a branch in the United Kingdom;

(2) the consent notice:

(a) is given in accordance with the relevant Single Market Directive;

(b) identifies the activities to which the consent relates; and

(c) includes the information prescribed under regulation 2 of the EEA Passport Rights Regulations (see AUTH 5 Annex 1 G);

(3) the EEA firm has been informed of the applicable provisions or two months have elapsed beginning with the date on which the FSA received the consent notice.

01/12/2001

AUTH 5.4.2A

Where an EEA firm exercises its EEA right to establish a branch in the United Kingdom under the Insurance Mediation Directive, the Act requires it to satisfy the establishment conditions, as set out in paragraph 13(1A) Part II of Schedule 3 to the Act (EEA Rights). These conditions are that:

(1) the EEA firm has given its Home State regulator notice of its intention to establish a branch in the United Kingdom;

(2) the FSA has received notice ("a regulator's notice") from the EEA firm's Home State regulator that the EEA firm intends to establish a branch in the United Kingdom;

(3) the EEA firm's Home State regulator has informed the EEA firm that the regulator's notice has been sent to the FSA; and

(4) one month has elapsed beginning with the date when the EEA firm's Home State regulator informed the EEA firm that it had sent the regulator's notice to the FSA.

14/01/2005

AUTH 5.4.3

For the purposes of paragraph 13 of Part II of Schedule 3 to the Act, the applicable provisions may include FSA rules. The EEA firm is required to comply with relevant rules when carrying on a passported activity through a branch in the United Kingdom as well as with relevant UK legislation.

01/12/2001

The notification procedure

AUTH 5.4.4

(1) When the FSA receives a consent notice from the EEA firm's Home State regulator, it will, under paragraphs 13(2)(b), (c) and 13(3) of Part II of Schedule 3 to the Act, notify the applicable provisions (if any) to:

(a) the EEA firm; and

(b) in the case of an EEA firm passporting under Insurance Directives, the Home State regulator;

within two months of the date on which the FSA received the consent notice.

(2) Although the FSA is not required to notify the applicable provisions to an EEA firm passporting under the Insurance Mediation Directive, these provisions are set out in AUTH 5 Annex 3 G (Application of the Handbook to Incoming EEA Firms).

01/12/2001

AUTH 5.5

EEA firms providing cross border services into the United Kingdom

01/12/2004

Is the service provided within the United Kingdom?

AUTH 5.5.1

There is guidance for UK firms in SUP 13 Annex X on when a service is provided cross border [to be added later]. EEA firms may find this of interest although they should follow the guidance of their Home State regulators.

01/12/2001

AUTH 5.5.2

An EEA firm should note that the requirement under the Single Market Directives to give a notice of intention to provide cross border services applies whether or not:

(1) it has established a branch in the United Kingdom; or

(2) those cross border services are regulated activities.

01/12/2001

The conditions for providing cross border services into the United Kingdom

AUTH 5.5.3

Before an EEA firm exercises an EEA right to provide cross border services into the United Kingdom, the Act requires it to satisfy the service conditions, as set out in paragraph 14 of Part II of Schedule 3 to the Act. These conditions are that:

(1) the EEA firm has given its Home State regulator notice of its intention to provide cross border services into the United Kingdom (a notice of intention);

(2) if the EEA firm is passporting under the Investment Services Directive, the Insurance Directives, or the Insurance Mediation Directive, the FSA has received notice ("a regulator's notice") from the EEA firm's Home State regulator containing the information prescribed under regulation 3 of the EEA Passport Rights Regulations (see AUTH 5 Annex 2 G);

(3) if the EEA firm is passporting under the Insurance Directives or the Insurance Mediation Directive, its Home State regulator has informed the EEA firm that it has sent the regulator's notice to the FSA; and

(4) if the EEA firm is passporting under the Insurance Mediation Directive, one month has elapsed beginning with the date when the EEA firm's Home State regulator informed the EEA firm that it had sent the regulator's notice to the FSA.

01/12/2001

The notification procedure

AUTH 5.5.4

(1) Unless the EEA firm is passporting under the Insurance Mediation Directive, if the FSA receives a regulator's notice or, where no notice is required (in the case of an EEA firm passporting under the Banking Consolidation Directive), is informed of the EEA firm's intention to provide cross border services into the United Kingdom, the FSA will, under paragraphs 14(2)(b) and 14(3) of Part II of Schedule 3 to the Act, notify the EEA firm of the applicable provisions (if any) within two months of the day on which the FSA received the regulator's notice or was informed of the EEA firm's intention.

01/12/2001

AUTH 5.5.5

An EEA firm that has satisfied the service conditions in AUTH 5.5.3 G is entitled to start providing cross border services into the United Kingdom. However, a EEA firm that wishes to start providing cross border services but has not yet received notification of the applicable provisions may wish to contact the FSA's Passport Notification Unit (see AUTH 5.8.1 G (2)).

01/12/2001

AUTH 5.6

Which rules will an incoming EEA firm be subject to?

01/12/2004

AUTH 5.6.1

AUTH 5 Annex 3 G summarises how the Handbook applies to incoming EEA firms.

01/12/2001

AUTH 5.6.2

An incoming EEA firm or incoming Treaty firm carrying on business in the United Kingdom must comply with the applicable provisions (see AUTH 5.5.4 G) and other relevant UK legislation. For example where the business includes:

(1) business covered by the Consumer Credit Act 1974, then an incoming EEA firm or incoming Treaty firm must comply with the provisions of that Act, as modified by paragraph 15(3) of Schedule 3 to the Act; or

(2) effecting or carrying out contracts covering motor vehicle third party liability risks as part of direct insurance business, then an incoming EEA firm or incoming Treaty firm is required to become a member of the Motor Insurers' Bureau.

01/12/2001

AUTH 5.6.3

In particular, an EEA firm or Treaty firm must comply with the applicable provisions in SUP 10 (Approved persons). An EEA firm or Treaty firm should read AUTH 6 (Approved persons) but also refer to SUP 10.1 (Application) which sets out the territorial provisions of the approved persons regime.

01/12/2001

AUTH 5.6.4

Under the EEA Passport Rights Regulations, references in section 60 of the Act (applications for approval for persons to perform controlled functions) to "the authorised person concerned" include an EEA firm with respect to which the FSA has received a consent notice or regulator's notice under paragraph 13 of Schedule 3 to the Act (see AUTH 5.4.2 G (1) and AUTH 5.4.2A G (2)) or a regulator's notice under paragraph 14 of that Schedule (see AUTH 5.5.3 G (2)), and which will be the authorised person concerned if the EEA firm qualifies for authorisation under that Schedule.

01/12/2001

AUTH 5.6.5

AUTH 5 Annex 3 G does not apply to incoming ECA providers. Such persons should refer to ECO for information on how the Handbook applies to them.

01/12/2001

AUTH 5.7

Top-up permission

01/12/2004

AUTH 5.7.1

If a person established in the EEA:

(1) does not have an EEA right;

(2) does not have permission as a UCITS qualifier; and

(3) does not have, or does not wish to exercise, a Treaty right (see AUTH 5.3.4 G to AUTH 5.3.9 D);

to carry on a particular regulated activity in the United Kingdom, it must seek Part IV permission from the FSA to do so (see AUTH 3). This might arise if the activity itself is outside the scope of the Single Market Directives, or where the activity is included in the scope of a Single Market Directive but is not covered by the EEA firm's Home State authorisation. If a person also qualifies for authorisation under Schedules 3, 4 or 5 of the Act as a result of its other activities, the Part IV permission is referred to in the Handbook as a top-up permission.

01/12/2001

AUTH 5.7.2

Where the FSA grants a top-up permission to an incoming EEA firm to carry on regulated activities for which it has neither an EEA right nor a Treaty right, the FSA is responsible for the prudential supervision of the incoming EEA firm, to the extent that the responsibility is not reserved to the incoming EEA firm's Home State regulator.

01/12/2001

AUTH 5.7.3

Top-up permission will normally be required, for example, for:

(1) the marketing of life insurance contracts by intermediaries; and

(2) designated investment business activities carried on in relation to commodity derivatives.

01/12/2001

AUTH 5.7.4

For guidance on how to apply for Part IV permission under the Act, see AUTH 3 (Applications for Part IV permission). If an EEA firm or Treaty firm wishes to make any subsequent changes to its top-up permission, it can make an application for variation of that permission (see SUP 6 (Applications to vary and cancel Part IV permission)).

01/12/2001

AUTH 5.8

Sources of further information

01/12/2004

AUTH 5.8.1

For further information on UK regulation, an EEA firm, aTreaty firm or a UCITS qualifier should contact the Authorisation and Approvals Department (Authorisation Enquiries) at the FSA. Questions about the passporting notification procedures can be addressed to the Passport Notification Unit.

(1) To contact the Authorisation Enquiries team:

(a) telephone on +44 20 7066 0082 or fax on +44 20 7066 9719;
(b) write to: Authorisation and Approvals Department (Authorisation Enquiries), The Financial Services Authority, 25 The North Colonnade, Canary Wharf, London E14 5HS.

(2) To contact the Passport Notification Unit:

(a) telephone on +44 20 7066 1000 or fax on +44 20 7066 xxxx;
(b) write to: Passport Notification Unit, The Financial Services Authority, 25 The North Colonnade, Canary Wharf, London E14 5HS;
(c) email: passport.notifications@ fsa.gov.uk.

01/12/2001

AUTH 5 Annex 1

Establishment of a branch: Contents of Consent Notice G

01/12/2004

Type of firm

Para No.

Contents of consent notice (Regulation 2)

Investment firm

(2)(a)

a statement that the firm is an investment firm;

(b)

the requisite details of the branch (see SUP 13 Annex 1 );

(c)

details of any compensation scheme which is intended to protect the branch's investors.

EEA UCITS management company

(2A)(a)

a statement that the firm is an EEA UCITS management company;

(b)

the requisite details of the branch; and

(c)

details of any compensation scheme which is intended to protect the branch's investors.

Credit institution
or

(3)(a)

a statement that the firm is a credit institution;

(b)

the requisite details of the branch (see SUP 13 Annex 1 );

(c)

the amount of the firm's own funds (as defined in Section 1 of Chapter 2 of Title V to the Banking Consolidation Directive); and

(d)

the solvency ratio of the firm (calculated in accordance with the Banking Consolidation Directive).

Financial institution

(4)(a)

a statement that:

(i)

the firm is a financial institution;

(ii)

the firm is a subsidiary undertaking of a credit institution which is authorised in the EEA State in question and which holds at least 90 per cent of the voting rights in the firm (and for the purpose of this paragraph any two or more credit institutions which are authorised in that EEA State and hold voting rights in the firm are to be treated as a single credit institution, and as being "parent undertakings" of the firm);

(iii)

the firm carries on in that EEA State the EEA activities in question;

(iv)

the memorandum and articles of association, or other constituent instrument, of the firm permit it to carry on those activities;

(v)

the consolidated supervision of the firm's parent undertaking or, if more than one of them, any one of them effectively includes supervision of the firm;

(vi)

the firm's parent undertaking has guaranteed or, if more than one, they have jointly and severally guaranteed, the firm's obligations, with the consent of the Home State regulator;

(vii)

the firm's business is being conducted in a prudent manner.

(b)

the requisite details of the branch (see SUP 13 Annex 1 );

(c)

the amount of the firm's own funds (as defined in Section 1 of Chapter 2 of Title V to the Banking Consolidation Directive);

(d)

the solvency ratio of the firm's parent undertaking (calculated in accordance with the Banking Consolidation Directive).

Insurance undertaking

(5)(a)

a scheme of operations prepared in accordance with such requirements as may be imposed by the firm's Home State regulator, setting out (among other things) the types of business to be carried on and the structural organisation of the branch;

(b)

the name of the firm's authorised agent;

(c)

the address in the United Kingdom from which information about the business may be obtained, and a statement that this is the address for service on the firm's authorised agent;

(d)

in the case of a firm which intends to cover relevant motor vehicle risks, a declaration by the firm that it has become a member of the Motor Insurers' Bureau (being a company limited by guarantee and incorporated under the Companies Act 1929(1) on 14 ^th June 1946); and

(e)

a statement by the firm's Home State regulator attesting that the firm has the minimum margin of solvency calculated in accordance with such of the following as are appropriate:

(i)

articles 16 and 17 of the First Non-Life Insurance Directive; and;

(ii)

articles 18, 19 and 20 of the First Life Insurance Directive.

13/02/2004

AUTH 5 Annex 2

Provision of services: Contents of regulator's notice G

01/12/2004

Type of firm

Para No.

Contents of regulator's notice (Regulation 3)

Investment firm

(2)(a)

a statement that the firm is an investment firm; and

(b)

particulars of the programme of operations to be carried on in the United Kingdom including a description of the particular activities which the firm is seeking to carry on in the United Kingdom in the exercise of an EEA right.

EEA UCITS management company

(2A)(a)

a statement that the firm is an EEA UCITS management company;

(b)

(c)

details of any compensation scheme which is intended to protect the branch's investors.

Insurance undertaking

(3)(a)

a statement of the classes of business which the firm is authorised to carry on in accordance with Article 6 of the First Non-Life Directive or Article 6 of the First Life Directive;

(b)

the name and address of the firm;

(c)

the nature of the risks or commitments which the firm proposes to cover in the United Kingdom;

(d)

in the case of a firm which intends to cover relevant motor vehicle risks:

(i)

the name and address of the claims representative (Note); and

(ii)

a declaration by the firm that it has become a member of the Motor Insurers' Bureau (being a company limited by guarantee and incorporated under the Companies Act 1929 (1) on 14 ^th June 1946); and

(e)

a statement by the firm's Home State regulator attesting that the firm has a minimum margin of solvency calculated in accordance with such of the following as are appropriate:

(i)

articles 16 and 17 of the First Non-Life Insurance Directive ; and

(ii)

article 18, 19 and 20 of the First Life Insurance Directive

Insurance intermediary

(4)

that the firm intends to carry on insurance mediation or reinsurance mediation by providing services in the United Kingdom.

13/02/2004

AUTH 5 Annex 3

Application of the Handbook to Incoming EEA Firms G

01/12/2004

The table below summarises the application of the Handbook to an incoming EEA firm. Where the table indicates that a particular module of the Handbook may apply, its application in relation to any particular activity is dependent on the detailed application provisions in that module. The table does not apply to incoming ECA providers. These should refer to ECO 1 for guidance on how the Handbook applies to them.

In some cases, the application of the Handbook depends on whether responsibility for a matter is reserved under a European Community instrument to the incoming EEA firm's Home State regulator. Guidance on the reservation of responsibility is contained in SYSC App 1 (Matters reserved to a Home State regulator).

For an incoming EEA firm which has permission for cross-border services only, many parts of the Handbook apply only if the firm carries on regulated activities in the United Kingdom. Those parts of the Handbook will therefore not apply if the firm confines its activities to those within the overseas persons exclusions in article 72 of the Regulated Activities Order, or which would not be regarded as carried on in the United Kingdom. Further guidance may be found in AUTH 2.4 (Link between activities and the United Kingdom) and AUTH 2.9.15 G to AUTH 2.9.17 G (Overseas persons).

(1) Module of Handbook

(2) Potential application to an incoming EEA firm with respect to activities carried on from an establishment of the firm (or its appointed representative) in the United Kingdom

(3) Potential application to an incoming EEA firm with respect to activities carried on other than from an establishment of the firm (or its appointed representative) in the United Kingdom

PRIN

The Principles apply only in so far as responsibility for the matter in question is not reserved by a European Community instrument to the firm's Home State regulator (PRIN 3.1.1 R).
For an incoming EEA firm which is a BCD credit institution without a top-up permission, Principle 4 applies only in relation to the liquidity of a branch established in the United Kingdom (PRIN 3.1.1 R (2)).

The Principles do not apply if the firm has permission only for cross-border services and does not carry on regulated activities in the United Kingdom (PRIN 3.1.1 R (2)).
The Principles have limited application for activities which are not carried on from a UK establishment (see PRIN 3.3.1 R).
Otherwise, see column (2).

SYSC

SYSC 1 contains application provisions only. SYSC 2 and SYSC 3 apply as set out in SYSC 1.1.1 R (1):
(1) SYSC 2.1.1 R and SYSC 2.1.2 G do not apply;
(2) SYSC 2.1.3 R to SYSC 2.2.3 G apply, but only in relation to allocation of the function in SYSC 2.1.3 R (2) and only in so far as responsibility for the matter in question is not reserved by a European Community instrument to the firm's Home State regulator; and
(3) SYSC 3 applies, but only in so far as responsibility for the matter in question is not reserved by a European Community instrument to the firm's Home State regulator.
SYSC 1.1.7 R (Where?) further restricts the territorial application of SYSC 1 to SYSC 3 for an incoming EEA firm. Further guidance is contained in SYSC 2.1.6 G, Question 12.
SYSC 4 applies to the extent that the Public Interest Disclosure Act 1998 applies to the firm.

SYSC 1 to SYSC 3 do not apply if the firm has permission only for cross-border services and does not carry on regulated activities in the United Kingdom (SYSC 1.1.1 R (2)).
SYSC 1 to SYSC 3 have limited application for activities which are not carried on from a UK establishment (see SYSC 1.1.7 R).
Otherwise, see column (2).

COND

COND does not apply if the firm does not have, or apply for, a top-up permission.
Otherwise, only threshold conditions 1, 3, 4 and 5 apply and only in so far as relevant to:
(1) an application for a top-up permission under Part IV of the Act (that is, a permission to carry on regulated activities in addition to those permitted through its authorisation under Schedule 3 to the Act (EEA Passport Rights)); and
(2) the exercise of the FSA's own-initiative power in relation to the top-up permission.
(COND 1.1.1 G.)

As column (2).

APER

APER applies to approved persons (APER 1.1.1 G). See below under SUP 10 as to whether controlled functions are performed, and approval therefore required.

Not relevant because SUP 10 does not apply.

FIT

FIT applies to a firm wishing to establish a branch in the United Kingdom or to apply for a top-up permission in respect of any application that it makes for the approval of a person to perform a controlled function (FIT 1.1). See under SUP 10 below as to whether such approval is required.

Does not apply.

GEN

GEN applies (GEN 1.1, GEN 2.1, GEN 3.1, GEN 4.1, GEN 5.1 and GEN 6.1). However, (a) GEN 4 does not apply to the extent that the firm is subject to equivalent rules imposed by its Home State (4.1.1 R (3)) and (b) GEN 6 only applies to business that can be regulated under section 138 of the Act (General rule-making power). It does not therefore apply if, or to the extent that, responsibility has been reserved to an incoming firm's Home State regulator by a European Community instrument.

GEN 4 does not apply if the firm has permission only for cross-border services and does not carry on regulated activities in the United Kingdom.
Otherwise, as column (2).

IPRU(BANK)

Only the following apply, and only if the firm is a credit institution other than an electronic money institution within the meaning of article 1(3)(a) of the E-Money Directive that has the right to benefit from the mutual recognition arrangements under the Banking Consolidation Directive (IPRU(BANK) 3.2.1R):
(1) IPRU(BANK) 3.3.15R, IPRU(BANK) 3.3.16G and IPRU(BANK) 3.5.1R; and
(2) chapter CO (which provides an overview of the underlying policy) and the more detailed guidance in chapters CB, CA, BC, BO, FX, CM, DU, TI, TE, TC, TL, TU, TS and TV.

Does not apply. But if the firm is a credit institution whose notification to the FSA of its intention to provide services in the United Kingdom covers services provided through a branch, see column (2).

IPRU(BSOC)

Does not apply because an incoming EEA firm cannot be a building society (IPRU(BSOC) X.2.1R).

IPRU(FSOC)

Does not apply because an incoming EEA firm cannot be a friendly society (IPRU(FSOC) 1.1).

IPRU(INS)

Only IPRU(INS) 3.6 and 3.7 (Linked long-term contracts) apply, and only if the firm is an insurer (IPRU(INS) 1.1(b)).

As column (2).

IPRU(INV)

IPRU(INV) does not apply unless the firm:
(1) has a top-up permission;
(2) is an authorised professional firm, investment management firm, members' adviser, personal investment firm, securities and futures firm, service company or underwriting agent; and
(3) is not a lead regulated firm or a media firm.
(IPRU(INV) 1.1.1R and 1.2R)

As column (2).

PRU

PRU 9.1 (Responsibility for insurance mediation activity) does not apply unless the firm has a top-up permission.
PRU 9.2 (Professional indemnity insurance requirements for insurance and mortgage mediation activity and mortgage lending and administration) does not apply unless the firm has a top-up permission.

As column (2).
As column (2).

PRU

PRU 9.3 (Capital resources for insurance and mortgage mediation activity and mortgage lending and administration) does not apply unless the firm has a top-up permission. See PRU 9.3.2 G for more detailed guidance.
PRU 9.4 (Insurance undertakings and mortgage lenders using insurance or mortgage mediation services) does not apply unless the firm has a top-up permission.
Otherwise, PRU does not apply unless the firm is an insurer to which PRU 7.6.33 R applies

As column (2).
As column (2).

COB

COB applies.

Where the activity:
(1) (a) would fall within the overseas persons exclusions in article 72 of the Regulated Activities Order; or
(b) would not be regarded as carried on in the United Kingdom; or
(c) is not carried on with or for a client in the United Kingdom;
then only the following apply:
(d) COB 3 (Financial promotion), but see the territorial scope in COB 3.3 (Where?);
(e) COB 5.5.7 R (Overseas business);
(f) certain parts of COB 6 (Product disclosure and the customer's right to cancel or withdraw) but only in relation to long-term insurance business carried on with a customer habitually resident in the United Kingdom or if the State of the risk is the FSA (see COB 1.4.7 R and COB 1.4.8 R); and
(g) (i) COB 4.3.19 R to COB 4.3.25 R save that the firm must also comply with those rules as if they also applied to a firm carrying out the activities in COB 4.3.19R (1) with or on behalf of all private customers;
(ii) COB 5.2.12 R to COB 5.2.14 R; and
(iii) COB 5.3.18 R (1) and COB 5.3.18A R to COB 5.3.18C R;
but only in relation to activities passported under the IMD (see COB 1.4.12R (3));
(2) concerns a distance contract and is carried on with retail customers in the United Kingdom from an establishment maintained by the firm in an EEA State which:
(a) has implemented the DMD; or
(b) has obligations in its domestic law corresponding to those provided for by the DMD;
COB 4.2, COB 5, and COB 6 do not apply.
Otherwise, as column (2), (COB 1.4.3 R).

ICOB

ICOB applies.

Only the following provisions of ICOB apply:
(a) ICOB 3 (Financial promotion), but see the territorial scope in ICOB 3.4 (Application: where?)
(b) ICOB 5.5.20 R, but only in relation to general insurance contracts if the state of the risk is the United Kingdom;
(c) ICOB 5.5.20 Rand ICOB 5.5.20 R, but only in respect of non-investment insurance contracts which are pure protection contracts where the habitual residence of the customer, other than an EEA ECA recipient, is in the United Kingdom;
(d) ICOB 6 (Cancellation), but only in respect of non-investment insurance contracts which are pure protection contracts where the habitual residence of the customer, other than an EEA ECA recipient, is in the United Kingdom.

CASS

CASS does not apply with respect to the firm's passported activities unless the firm is an insurer (CASS 1.2.3 R (2)).

As column (2).

MAR

MAR 1 (Code of market conduct)
Applies if the firm is seeking guidance as to whether or not behaviour amounts to market abuse (MAR 1.1.1 G).

MAR 1 (Code of market conduct) As column (2).

MAR 2 (Price stabilising rules)
Applies if the firm undertakes stabilising action and wishes to show that it has acted in conformity with price stabilising rules, or that its behaviour conforms with rules in accordance with section 118(8)of the Act (Market abuse) (MAR 2.1 Application))

MAR 2 (Price stabilising rules)
Only applies in so far as the firm undertakes stabilising action and wishes to rely on a defence that it has acted in conformity with price stabilising rules, or that its behaviour conforms with rules in accordance with section 118(8)of the Act (Market abuse) (MAR 2.1.6 R (1)

MAR 3 (Inter-professional conduct)
Applies (MAR 3.1.4 R).

MAR 3 (Inter-professional conduct)
Does not apply (MAR 3.1.4 R).

MAR 4 (Endorsement of the Take-over Code)
Applies to firms whose permission includes, or ought to include, any designated investment business, except as set out in MAR 4.4.1 R.

MAR 4 (Endorsement of the Take-over Code)
Does not apply (MAR 4.4.1 R (4)(b)).

MAR 5 (Alternative Trading Systems)
Does not apply (MAR 5.1.1 R).

TC applies, but only in so far as responsibility for any matter it covers is not reserved by a European Community instrument to the firm's Home State regulator.

TC 1 (Commitments):
(1) contains guidance relevant to compliance with Principle 3, satisfaction of threshold condition 5 and the fit and proper test for approved persons; it is therefore relevant only if they apply to the firm (see the guidance on application of PRIN, COND and FIT above);
(2) in particular, does not therefore apply if the firm has permission only for cross-border services and does not carry on regulated activities in the United Kingdom.
TC 2 (Rules and guidance) does not apply (TC 2.1.2 R (2)).

Applies (ML 1.1.2 R).

Does not apply (ML 1.1.2 R).

AUTH

AUTH applies to the firm if it:
(1) is considering carrying on activities in the United Kingdom which may fall within the scope of the Act and is seeking guidance on whether it needs a top-up permission; or
(2) is, or is considering, applying to the FSA to carry on regulated activities in the United Kingdom under a top-up permission; or
(3) is, or is considering, establishing a branch or providing cross-border services into the United Kingdom using EEA rights.

As column (2).

SUP

SUP 1 (The FSA's approach to supervision)
Applies, but contains only guidance.

SUP 1 (The FSA's approach to supervision)
As column (2).

SUP 2 (Information gathering by the FSA on its own initiative)
The application of this chapter is the same as for Principle 11 (see under PRIN above).

SUP 2 (Information gathering by the FSA on its own initiative)
As column (2).

SUP 3 (Auditors)
Applies to the firm (and its auditor) only if the firm has a top-up permission.

SUP 3 (Auditors)
As column (2).

SUP 4 (Actuaries)
Does not apply.

SUP 4 (Actuaries)
Does not apply

SUP 5 (Skilled persons)
Applies only if the firm is required by the FSA to provide a report under section 166 of the Act (Reports by skilled persons).

SUP 5 (Skilled persons)
As column (2).

SUP 6 (Applications to vary and cancel Part IV permission)
Applies only if the firm has a top-up permission.

SUP 6 (Applications to vary and cancel Part IV permission)
As column (2).

SUP 7 (Individual requirements)
Applies only if the firm has a top-up permission. It contains only guidance on the exercise of the FSA's own-initiative power to vary that permission. The FSA has similar, but more limited, powers of intervention under Part XIII of the Act in relation to the permission of the firm under Schedule 3 to the Act (see ENF 4).

SUP 7 (Individual requirements)
As column (2).

SUP 8 (Waiver and modification of rules)
Applies only if the firm wishes to apply for, or consent to, or has been given, a waiver of the FSA's rules (SUP 8.1.1 R).

SUP 8 (Waiver and modification of rules)
As column (2).

SUP 9 (Individual guidance)
Applies only if the firm wishes to obtain individual guidance from the FSA or if the FSA gives the firm individual guidance on its own initiative (SUP 9.1.1 G).

SUP 9 (Individual guidance)
As column (2).

SUP 10 (Approved persons)
Applies, but the applicable controlled functions are limited. See SUP 10.1 (Application) for more detailed guidance.

SUP 10 (Approved persons)
Does not apply (SUP 10.1.6 R).

SUP 11 (Controllers and close links)
Does not apply (SUP 11.1.1 R (2)).

SUP 12 (Appointed representatives)
Applies only if the firm has permission to carry on designated investment business, insurance mediation activity or mortgage mediation activity and wishes to appoint, or has appointed, an appointed representative (SUP 12.1.1 R (1)).

SUP 12 (Appointed representatives)
As column (2).

SUP 13 (Exercise of passport rights by UK firms)
Does not apply.

SUP 14 (Incoming EEA Firms: Changing detail and cancelling qualifications for authorisation)
Applies.

SUP 14 (Incoming EEA Firms: Changing detail and cancelling qualifications for authorisation)
Applies

SUP 15 (Notifications to the FSA)
Applies in full if the firm has a top-up permission. Otherwise, the application is modified as set out in SUP 15 Annex 1.

SUP 15 (Notifications to the FSA)
Does not apply if the firm has permission only for cross-border services and does not carry on regulated activities in the United Kingdom (SUP 15 Annex 1).Otherwise, as column (2).

SUP 16 (Reporting requirements)
Parts of this chapter may apply if the firm has a top-up permission or if the firm is:
(a) a bank; or
(b) a depositary of an ICVC; or
(c) an OPS firm; or
(d) a trustee of an AUT; or
(e) an insurer with permission to effect or carry out life policies; or
(f) a firm with permission to establish, operate or wind up a stakeholder pension scheme; or
(g) a firm with permission to advise on investments, arrange (bring about) deals in investments, make arrangements with a view to transactions in investments, or arrange safeguarding and administration of assets.
(SUP 16.1.)

SUP 16 (Reporting requirements)
Parts of this chapter may apply if the firm has a top-up permission or if the firm is:
(a) a depositary of an ICVC; or
(b) an OPS firm; or
(c) a trustee of an AUT; or
(d) an insurer with permission to effect or carry out life policies; or
(e) a firm with permission to establish, operate or wind up a stakeholder pension scheme; or
(f) a firm with permission to advise on investments, arrange (bring about) deals in investments, make arrangements with a view to transactions in investments, or arrange safeguarding and administration of assets
(SUP 16.1.)

SUP 17 (Transaction reporting)
Does not apply in relation to the firm's passported activities. Otherwise, this chapter applies only if the firm is a securities and futures firm, a personal investment firm or an ISD investment firm (SUP 17.1.1).

SUP 17 (Transaction reporting)
Does not apply (SUP 17.1.1 (2)(a)).

SUP 18 (Transfers of business) SUP 18.4
Does not apply. SUP 18.1, SUP 18.2 and SUP 18.3 may be relevant if the firm proposes to transfer the whole or part of its business by an insurance business transfer scheme or to accept such a transfer or proposes to accept certain transfers of insurance business taking place outside the United Kingdom.

SUP 18 (Transfers of business)
As column (2).

SUP 19 (Commodity Futures Trading Commission Part 30 Exemption)
This chapter may be relevant if the firm intends to trade on behalf of US customers on non-US futures and options exchanges.

SUP 19 (Commodity Futures Trading Commission Part 30 Exemption)
Does not apply (SUP 19.1.1 G (2)).

SUP 20 (Fees)
Applies (SUP 20.1.1 R) but modified (SUP 20.4.7 G - SUP 20.4.10 R).

SUP 20 (Fees)
As column (2).

SUP App 1 (Prudential categories)
Applies and provides guidance on the prudential categories used in the Handbook.

SUP App 1 (Prudential categories)
As column (2).

SUP App 2 (Insurers: Scheme of operations)
Does not apply (SUP App 2.1.1 R).

ENF

ENF applies and contains guidance on the use of the FSA's enforcement powers (ENF 1).

DEC

DEC applies and contains guidance on the FSA's decision making procedures (DEC 1).

DISP

Applies (DISP 1.1.1 R).

Does not apply (DISP 1.1.1 R).

COMP

Applies, except in relation to the passported activities of an ISD investment firm or a BCD credit institution (see the definition of "participant firm") other than an electronic money institution within the meaning of article 1(3)(a) of the E-Money Directive that has the right to benefit from the mutual recognition arrangements under the Banking Consolidation Directive. However, an ISD investment firm or BCD credit institution may be able to apply for top-up cover in relation to its passported activities (see COMP 14 (Participation by EEA Firms)).

Does not apply in relation to the passported activities of an ISD investment firm or a BCD credit institution (see the definition of "participant firm"). Otherwise, COMP may apply, but the coverage of the compensation scheme is limited for non-UK activities (see COMP 5).

COAF

Applies if the firm wishes to bring a complaint under the complaints scheme, provided the complaint meets the requirements of the complaints scheme (COAF 1.2).

As column (2).

COLL and CIS

COLL and CIS apply if the firm:
(a) is the operator or depositary of an AUT or ICVC; or
(b) wishes to apply for an authorisation order to establish an AUT or ICVC; or
(c) is the operator of a recognised scheme; or
(d) wishes to apply for recognition of a recognised scheme.

As column (2).

CRED

Does not apply.

ECO

ECO 2 applies if the firm is an outgoing ECA provider. ECO 3 applies if the firm is a domestic ECA provider. ECO 1 does not apply.

ECO 1 applies if the firm is an incoming ECA provider except for ECO 1.2.1 R which does not apply if:.
(a) the electronic commerce activity is not insurance business which:
(i) satisfies the conditions in ECO 1.2.3 R; and
(ii) is carried on by an insurer; and
(b) the EEA State from which the activity is provided has implemented the DMD with the result that the obligations provided for by the DMD are applied when the incoming ECA provider is carrying on the activity from an establishment in that State with a UK ECA recipient in the United Kingdom.
ECO 2 and ECO 3 do not apply.

ELM

Only ELM 6 and (in so far as it applies to the rules in ELM 6) ELM 5.6.1R apply.

Does not apply.

LLD

Does not apply.

MCOB

Applies where the activity is carried on with or for a customer resident in the United Kingdom or another EEA State at the time that the activity is carried on, but see the territorial scope in MCOB 3.3 (Application: where?).

Applies where the activity is carried on with or for a customer resident in the United Kingdom at the time, that the activity is carried on but see MCOB 1.3.4 R (Distance contracts entered into from an establishment in another EEA State) and MCOB 3.3 (Application: where?).

PROF

PROF applies only if the firm is an authorised professional firm.

As column (2).

REC

Does not apply.

14/01/2005