COND 1
Introduction
COND 1.1
Application
- 01/12/2004
Who?
COND 1.1.1
See Notes
COND applies to every firm, except that:
- (1) for an incoming EEA firm or an incoming Treaty firm only threshold conditions 1, 3, 4 and 5 apply and only in so far as relevant to:
- (a) an application for a top-up permission under Part IV of the Act (that is, permission to carry on regulated activities in addition to those permitted through the incoming firm's authorisation under Schedule 3 (EEA Passport Rights) or 4 (Treaty Rights) to the Act); and
- (b) the exercise of the FSA's own-initiative power under section 45 of the Act (Variation etc on the FSA's own initiative) in relation to the top-up permission;
- (2) COND also applies to an applicant for Part IV permission;
- (3) threshold conditions 3, 4 and 5 do not apply to a Swiss General Insurance Company; and
- (4) COND 2.6 (Additional conditions) is only relevant to non-EEA insurers.
- 03/09/2001
COND 1.1.2
See Notes
- 03/09/2001
What?
COND 1.1.3
See Notes
COND applies in relation to all of the regulated activities for which a firm has, or will have, permission, except as stated in COND 1.1.1 G (1).
- 03/09/2001
Where?
COND 1.1.4
See Notes
COND applies in relation to all of the regulated activities wherever they are carried on, except as stated in COND 1.1.1 G (1).
- 03/09/2001
COND 1.2
Purpose
- 01/12/2004
COND 1.2.1
See Notes
COND gives guidance on the threshold conditions set out in or under Schedule 6 to the Act (Threshold conditions). The threshold conditions represent the minimum conditions which a firm is required to satisfy, and continue to satisfy, in order to be given and to retain Part IV permission.
- 03/09/2001
Applications for Part IV permission or variation of Part IV permission
COND 1.2.2
See Notes
- (1) Under section 41(2) of the Act (The threshold conditions), in giving or varying a Part IV permission or imposing or varying any requirement, the FSA must ensure that the firm concerned will satisfy, and continue to satisfy, the threshold conditions in relation to all of the regulated activities for which it has or will have permission.
- (2) If, however, the applicant for permission is an incoming firm seeking top-up permission, or variation of top-up permission, under Part IV of the Act (Permission to carry on regulated activities), then under paragraphs 6 and 7 of Schedule 6 to the Act, the FSA will have regard only to satisfaction of threshold conditions 1, 3, 4 and 5, as relevant to the regulated activities for which the applicant has, or will have, Part IV permission.
- 03/09/2001
Exercise of the FSA's own-initiative power
Approval of acquisitions or increases of control
COND 1.2.4
See Notes
- (1) Under section 186(3) of the Act (Objection to acquisition of control), in deciding whether the approval requirements for a proposed acquisition or increase of control are satisfied, the FSA must have regard, in relation to the control that the acquirer:
- (a) has over the firm; or
- (b) will have over the firm if the proposal which has been notified to the FSA is carried out;
- to its general duty to ensure that the firm will continue to satisfy the threshold conditions.
- (2) The FSA must also have regard to the threshold conditions in imposing any conditions on its approval of an acquisition or increase of control (section 185(2) of the Act (Conditions attached to approval)). See SUP 11.7.3 G (Acquisition or increase of control: procedures).
- 03/09/2001
COND 1.3
General
- 01/12/2004
An overview of the threshold conditions is given in COND 1 Annex 1 G.
COND 1.3.1
See Notes
The guidance in COND 2 explains each
threshold condition in Part I of Schedule 6 (threshold conditions) to the Act and how the
FSA
will interpret it in practice. An overview of the threshold conditions is given in COND 1 Annex 1 G. This guidance is not, however, exhaustive and is written in very general terms. A firm will need to have regard to the obligation placed upon the
FSA
under section 41 (the threshold conditions) of the Act; that is, the
FSA
must ensure that the firm will satisfy, and continue to satisfy, the
threshold conditions in relation to each regulated activity for which it has, or will have, permission.
- 03/09/2001
COND 1.3.2
See Notes
- (1) The FSA will consider whether a firm satisfies, and will continue to satisfy, the threshold conditions in the context of the size, nature, scale and complexity of the business which the firm carries on or will carry on if the relevant application is granted.
- (2) In relation to threshold conditions 4 and 5, the FSA will consider whether a firm is ready, willing and organised to comply, on a continuing basis, with the requirements and standards under the regulatory system which apply to the firm, or will apply to the firm, if it is granted Part IV permission , or a variation of its permission. These matters will also be considered if the FSA is exercising its own-initiative power (see COND 1.2.3 G). Guidance to firms on the implications of this is given under each of those threshold conditions.
- 03/09/2001
COND 1.3.3
See Notes
Although the
FSA
may consider that a matter is relevant to its assessment of a firm, the fact that a matter is disclosed to the
FSA
, for example in an application, does not necessarily mean that the firm will fail to satisfy the
threshold conditions. The
FSA
will consider each matter in relation to the regulated activities for which the firm has, or will have, permission, having regard to the regulatory objectives set out in section 2 of the Act (The FSA's general duties). A firm should disclose each relevant matter but, if it is appropriate to do so, it is encouraged to discuss it with the
FSA
. This will enable the
FSA
to consider fully how material or significant the matter is and how it affects the ability of the firm to satisfy, and continue to satisfy, the
threshold conditions
(see also COND 2.3.5 G, COND 2.4.4 G (3) and COND 2.5.4 G (3)).
- 03/09/2001
Statutory quotations
COND 1.3.4
See Notes
- (1) For ease of reference, the threshold conditions in or under Schedule 6 to the Act have been quoted in full in COND 2.
- (2) As these provisions impose obligations, they are printed in bold type. The use of bold type is not intended to indicate that these quotations are rules made by the FSA .
- (3) Where words have been substituted for the text of these provisions the substitutions are enclosed in square brackets ([ ]). However, none of the changes made by the FSA in these quotations for the purpose of the text in COND can supersede or alter the meaning of the statutory provision concerned.
- 03/09/2001
COND 1 Annex 1
Introduction
- 01/12/2004
See Notes
- 19/01/2003
COND 1 Annex 2
Overview of the threshold conditions (COND 1.3.1 G) applicable to Non-EEA Insurers
- 01/12/2004
See Notes
- 03/09/2001