Supervision

Part

Credit Unions New sourcebook

Chapter

Supervision

Printed on: 16/11/2024

Rulebook at: 31/03/2012

CREDS 8

Supervision

CREDS 8.1

Application and purpose

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Application

CREDS 8.1.1

This section applies to all credit unions.

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Purpose

CREDS 8.1.2

The purpose of this section is to provide additional rules and guidance relating to reporting requirements that are specific to credit unions. Credit unions also need to comply with the relevant provisions of SUP relating to reporting, including SUP 16.3 and SUP 16.12.

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CREDS 8.2

Reporting requirements

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Quarterly return

CREDS 8.2.1

SUP 16.12.5 R states that a credit union must submit a quarterly return. The content, reporting frequency and due date in relation to that report are shown in CREDS 8.2.2 G. The form can be found at SUP 16 Annex 14(1)R.

[Note: a transitional provision applies to SUP 16.12.5 R: see CREDS TP 1.17.]

[Note: a transitional provision applies in respect of the form to be used at SUP 16 Annex 14(1)R (see CREDS TP 1.4).]

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CREDS 8.2.2

This table belongs to CREDS 8.2.1 G

Content of report

Form

Frequency

Due date

Key financial data

Quarterly

One month after quarter end

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Annual return

CREDS 8.2.3

SUP 16.12.5 R states that a credit union must submit an annual return. The content, reporting frequency and due date in relation to that report are shown in CREDS 8.2.4 G. The form can be found at SUP 16 Annex 14(2) R.

[Note: transitional provisions apply to the requirement in SUP 16.12.5 R (see ) and in respect of the form to be used at SUP 16 Annex 14(2)R (see )CREDS TP 1.4.]

[Note: a transitional provision applies to SUP 16.12.5 R: see CREDS TP 1.18.]

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CREDS 8.2.4

This table belongs to CREDS 8.2.3 G

Content of report

Form

Frequency

Due date

Extended financial data

Annually

Six months after financial year end

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CREDS 8.2.5

The form may be updated from time to time. Credit unions should use the form in force at the end of the financial year on which they are reporting.

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Accounts and audit

CREDS 8.2.6

(1) Every credit union must send to the FSA a copy of its audited accounts published in accordance with section 3A of the Friendly and Industrial and Provident Societies Act 1968 or provided in accordance with article 49 of the Credit Unions (Northern Ireland) Order 1985.

(2) The accounts must:

(a) be made up for the period beginning with the date of the credit union's registration or with the date to which the credit union's last annual accounts were made up, whichever is the later, and ending on the credit union's most recent financial year end; and

(b) accompany the annual return submitted to the FSA under SUP 16.12.5 R (see CREDS 8.2.3 G), unless they have been submitted already.

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CREDS 8.2.7

Every credit union must supply free of charge, to every member or person interested in the funds of the credit union who applies for it, a copy of the latest audited accounts of the credit union sent to the FSA under CREDS 8.2.6 R.

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Financial penalties for late submission of reports

CREDS 8.2.8

(1) Financial penalties may be imposed for the late submission of:

(a) the quarterly and annual returns referred to in SUP 16.12.5 R; and

(b) the audited accounts referred to in CREDS 8.2.6 R.

(2) Details of the FSA's policy and procedures on financial penalties are given in DEPP.

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CREDS 8.3

Approved persons

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CREDS 8.3.1

The purpose of this section is to set out further guidance relating to the approved persons regime that is specific to credit unions. Credit unions should also read Chapter 10 of the Supervision manual (SUP) concerning approved persons.

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Introduction

CREDS 8.3.2

The effect of section 59 of the Act and SUP 10 is that a credit union must apply to the FSA for the approval of one or more individuals to perform the functions which are known as controlled functions. Controlled functions fall within two groups:

(1) The significant influence functions describe the roles performed by the governing body and senior managers of the firm who exert a significant influence over the regulated activities of the firm.

(2) The customer functions describe the roles of individuals who deal with customers or with the property of customers. These customer functions do not extend to activities in relation to accepting deposits or general insurance and therefore will not be relevant to credit unions with permission for accepting deposits only.

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Controlled functions

CREDS 8.3.3

The complete list of all controlled functions is located in SUP 10.4.5 R. Guidance on those controlled functions most likely to be relevant to credit unions is provided below.

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CREDS 8.3.4

SUP 10.6: the governing functions:

(1) SUP 10.6.4 R: the director function, This is the function of acting in the capacity of a director of a credit union.

(2) SUP 10.6.8 R: the non-executive director function. It is unusual for a credit union to appoint non-executive directors as such. But this function would include membership of a credit union's supervisory committee and any other committee which scrutinises the approach of executive management, the credit union's performance, and its standards of conduct.

(3) SUP 10.6.11 R: the chief executive function. Acting in the capacity of chief executive, whether or not using that title. This role includes anyone having the responsibility, alone or jointly with one or more others, under the immediate authority of the committee of management, for the conduct of the whole of the business.

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CREDS 8.3.5

SUP 10.7: the required functions:

(1) SUP 10.7.1 R: the apportionment and oversight function. This is the function of dealing with apportionment of responsibilities under SYSC 4.4.3 R, and of overseeing the establishment and maintenance of systems and controls under SYSC 4.1.1 R.

(2) SUP 10.7.13 R: the money laundering reporting function. This is the function of acting in the capacity of the money laundering reporting officer of a credit union.

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CREDS 8.3.6

SUP 10.8: the systems and controls function. This is the function of acting as an employee with responsibility for reporting to the committee of management in relation to:

(1) the credit union's financial affairs; or

(2) setting and controlling its risk exposure; or

(3) adherence to internal systems and controls, procedures and policies.

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CREDS 8.3.7

Where an employee performs the systems and controls function the FSA would expect the credit union to ensure that the employee had sufficient expertise and authority to perform that function effectively, for example by occupying the role of a director or senior manager.

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CREDS 8.3.8

SUP 10.9 : the significant management functions: This controlled function will only apply to the credit union if the function is not being performed by a member of the committee of management and the credit union has followed the guidance in SUP 10.9.3 G.

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