GEN General Provisions sourcebook

Part

GEN General Provisions sourcebook

Printed on: 22/11/2024

Rulebook at: 04/10/2013

Chapters

GEN 1 Appropriate regulator approval and emergencies
GEN 2 Interpreting the Handbook
GEN 4 Statutory status disclosure
GEN 6 Insurance against financial penalties
Transitional Provisions and Schedules

GEN 1

Appropriate regulator approval and emergencies

GEN 1.1

Application

01/12/2004

[Note: ESMA has also issued guidelines under article 16(3) of the ESMA Regulation covering various topics relating to automated trading and direct electronic access.

See www.fca.org.uk

]

GEN 1.1.1

(1) This chapter applies to every firm. GEN 1.3 (Emergency) also applies to an unauthorised person to whom a rule in the Handbook applies.
(2) For a UCITS qualifier, this chapter applies only with respect to the communication and approval of financial promotions to which COBS 4 (Communicating with clients, including financial promotion) applies and to the maintenance of facilities to which COLL 9.4 (Facilities in the United Kingdom) applies.

01/04/2013

GEN 1.2

Referring to approval by the appropriate regulator

01/04/2013

GEN 1.2.1

The purpose of GEN 1.2.2 R is to prevent clients being misled about the extent to which the appropriate regulator has approved a firm's affairs.

01/04/2013

GEN 1.2.2

(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 a public statement or to a client, expressly or by implication, that its affairs, or any aspect of them, have the approval or endorsement of the appropriate regulator or another competent authority.
(2) Paragraph (1) does not apply to statements that explain, in a way that is fair, clear and not misleading, that:

(a) the firm is an authorised person;
(b) the firm has permission to carry on a specific activity;
(c) an authorisation order has been made in relation to an AUT, ACS or ICVC;
(d) a recognised scheme has that status;
(e) the firm's approved persons have been approved by the appropriate regulator for the purposes of section 59 of the Act (Approval for particular arrangements);
(f) the firm has been given express written approval by the appropriate regulator in respect of a specific aspect of the firm's affairs.

(3) Paragraph (1) applies with respect to the carrying on of both regulated activities and unregulated activities.

01/07/2013

GEN 1.2.3

GEN 1.2.2 R (2)(f) is confined to written approval because of the need for clarity as to the scope of any approval given by the appropriate regulator.

01/04/2013

GEN 1.3

Emergency

01/12/2004

GEN 1.3.1

The appropriate regulator recognises that there may be occasions when, because of a particular emergency, a person (generally a firm, but in certain circumstances, for example in relation to price stabilising rules, an unauthorised person) may be unable to comply with a particular rule in the Handbook. The purpose of GEN 1.3.2 R is to provide appropriate relief from the consequences of contravention of such a rule in those circumstances.

01/04/2013

GEN 1.3.2

(1) If any emergency arises which:

(a) makes it impracticable for a person to comply with a particular rule in the Handbook;
(b) could not have been avoided by the person taking all reasonable steps; and
(c) is outside the control of the person, its associates and agents (and of its and their employees);

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.
(2) Paragraph (1) applies only for so long as:

(a) the consequences of the emergency continue; and
(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).

(3) The person must notify the appropriate regulator as soon as practicable of the emergency and of the steps it is taking and proposes to take to deal with the consequences of the emergency.
(4) A notification under (3) must be given to or addressed and delivered in accordance with SUP 15.7 (Form and method of notification) (whether or not the person is a firm). If the person is not a firm, the notification must be given to or addressed for the attention of: Firm Contact Centre, The Financial Conduct Authority, 25 The North Colonnade, Canary Wharf, London E14 5HS (tel: 0845 606 9966).

01/04/2013

GEN 1.3.3

A firm should continue to keep the appropriate regulator informed of the steps it is taking under GEN 1.3.2 R (3), in order to comply with its obligations under Principle 11 (Relations with regulators).

01/04/2013

GEN 1.3.4

In the context of GEN 1.3.2 R, an action is not practicable if it involves a person going to unreasonable lengths.

01/04/2013

GEN 1.3.5

GEN 1.3.2 R operates on the appropriate regulator's rules. It does not affect the appropriate regulator's powers to take action against a firm in an emergency, based on contravention of other requirements and standards under the regulatory system. For example, the appropriate regulator may exercise its own-initiative power in appropriate cases to vary a firm's Part 4A permission based on a failure or potential failure to satisfy the threshold conditions (see SUP 7 (Individual requirements) and EG 8 (Variation and cancellation of permission and imposition of requirements on the FCA's own initiative and intervention against incoming firms)).

01/04/2013

GEN 2

Interpreting the Handbook

GEN 2.1

Introduction

06/07/2006

Application

GEN 2.1.2

This chapter applies to every person to whom any provision in the Handbook applies. In relation to a provision other than a rule, the rules in this chapter apply as if they were part of that provision.

01/04/2013

The Reader's Guide

GEN 2.1.10

The Reader's Guide supplements this chapter. It provides an introduction to the structure and contents of the Handbook and its related materials, explaining how the different modules fit together and how to interpret and use the Handbook.

01/04/2013

GEN 2.2

Interpreting the Handbook

01/12/2004

Purposive interpretation

GEN 2.2.1

Every provision in the Handbook must be interpreted in the light of its purpose.

01/04/2013

GEN 2.2.2

The purpose of any provision in the Handbook is to be gathered first and foremost from the text of the provision in question and its context among other relevant provisions. The guidance given on the purpose of a provision is intended as an explanation to assist readers of the Handbook. As such, guidance may assist the reader in assessing the purpose of the provision, but it should not be taken as a complete or definitive explanation of a provision's purpose.

01/04/2013

Evidential provisions

GEN 2.2.3

Any rule in the Handbook which has the status letter "E" in the margin or heading:

(1) is to be taken also to provide that contravention of the rule does not give rise to any of the consequences provided for by provisions of the Act other than section 138C (Evidential provisions); and
(2) incorporates the status letter "E" in the margin or heading as part of the rule.

01/04/2013

GEN 2.2.4

(1) The rules to which section 138C of the Act applies ("evidential provisions") are identified in the Handbook by the status letter "E" in the margin or heading.
(2) Other provisions in the Handbook, although also identified by the status letter "E" in the margin or heading, are actually not rules but provisions in codes and GEN 2.2.3 R does not apply to them. These code provisions are those provisions in the Code of Practice for Approved Persons (APER 3 and APER 4) and the Code of Market Conduct (MAR 1) with the status letter "E".

01/04/2013

GEN 2.2.5

Chapter 6 of the Reader's Guide contains an explanation of the significance of the status letters R, E, G, D, UK, EU, P and C, and includes further information on Handbook provisions, including evidential provisions.

01/04/2013

Use of defined expressions

GEN 2.2.6

Expressions with defined meanings appear in italics in the Handbook, unless otherwise stated in individual sourcebooks or manuals.

01/04/2013

GEN 2.2.7

In the Handbook (except IPRU, unless otherwise indicated):

(1) an expression in italics which is defined in the Glossary has the meaning given there; and
(2) an expression in italics which relates to an expression defined in the Glossary must be interpreted accordingly.

01/04/2013

GEN 2.2.8

Examples of related expressions are:

(1) "advice on investments" and "advise on investments", which should be interpreted by reference to "advising on investments";
(2) "closely linked", which should be interpreted by reference to "close links";
(3) "controls" and "controlled", which should be interpreted by reference to "control"; and
(4) "effect", as for example in "effect a life policy", which should be interpreted by reference to "effecting contracts of insurance".

01/04/2013

GEN 2.2.9

Unless the context otherwise requires or unless otherwise stated in a particular sourcebook or manual, where italics have not been used, an expression bears its natural meaning (subject to the Interpretation Act 1978; see GEN 2.2.11 R to GEN 2.2.12 G).

01/04/2013

GEN 2.2.10

The Interim Prudential sourcebooks (IPRU) have individual arrangements for defined terms and each contains rules or guidance on its own arrangements. In respect of those sourcebooks, reliance should not be placed on the definitions which appear in the Glossary unless otherwise indicated.

01/04/2013

Application of the Interpretation Act 1978

GEN 2.2.11

The Interpretation Act 1978 applies to the Handbook.

01/04/2013

GEN 2.2.12

The application of the Interpretation Act 1978 to the Handbook has the effect, in particular, that:

(1) expressions in the Handbook used in the Act have the meanings which they bear in the Act, unless the contrary intention appears;
(2) where reference is made in the Handbook to an enactment, it is a reference to that enactment as amended, and includes a reference to that provision as extended or applied by or under any other enactment, unless the contrary intention appears; and
(3) unless the contrary intention appears:

(a) words in the Handbook importing the masculine gender include the feminine and words importing the feminine gender include the masculine;
(b) words in the Handbook in the singular include the plural and words in the plural include the singular.

01/04/2013

Civil partnership - references to stepchildren etc

GEN 2.2.12A

Any reference in a provision of the Handbook made before 5 December 2005 to a stepchild, step-parent, stepdaughter, stepson, stepbrother or stepsister is to be interpreted in accordance with section 246 of the Civil Partnership Act 2004.

01/04/2013

GEN 2.2.12B

GEN 2.2.12A R and sections 246 and 247 of the Civil Partnership Act 2004 amend each reference in the Handbook to a stepchild, step-parent and certain related expressions to take account of civil partnerships. As a result a reference (for example) to a stepchild of a person (A) includes a reference to the child of the civil partner of A where that child is not A's child.

01/04/2013

Cross-references in the Handbook

GEN 2.2.13

A reference in the Handbook to another provision in the Handbook is a reference to that provision as amended from time to time.

01/04/2013

GEN 2.2.13A

Unless a contrary intention appears, to the extent that a provision made by the appropriate regulator ('the referring provision') contains a cross-reference to another provision that is not made by that regulator ('the referred provision'), the referred provision is to be taken to have been made by the appropriate regulator to the extent necessary to make the referring provision function with the full effect indicated by the reference.

01/04/2013

References to writing

GEN 2.2.14

If a provision in the Handbook refers to a communication, notice, agreement or other document "in writing" then, unless the contrary intention appears, it means in legible form and capable of being reproduced on paper, irrespective of the medium used. Expressions related to writing must be interpreted accordingly.

01/04/2013

GEN 2.2.15

GEN 2.2.14 R means that, for example, electronic media may be used to make communications which are required by a provision of the Handbook to be "in writing", unless a contrary intention appears, or the use of electronic media would contravene some other requirement. GEN 2.2.14 R does not, however, affect any other legal requirement which may apply in relation to the form or manner of executing a document or agreement.

01/04/2013

GEN 2.2.16

"Document" is a defined term in the Glossary, the definition of which includes information recorded in any form, including electronic form.

01/04/2013

Activities covered by general rules

GEN 2.2.17

A general rule (that is a rule made by the appropriate regulator under the general rule making powers) is to be interpreted as:

(1) applying to a firm with respect to the carrying on of all regulated activities, except to the extent that a contrary intention appears; and
(2) not applying to a firm with respect to the carrying on of unregulated activities, unless and then only to the extent that a contrary intention appears.

01/04/2013

Continuity of authorised partnerships and unincorporated associations

GEN 2.2.18

(1) If a firm, which is a partnership or unincorporated association, is dissolved, but its authorisation continues to have effect under section 32 of the Act (Partnerships and unincorporated associations) in relation to any partnership or unincorporated association which succeeds to the business of the dissolved firm, the successor partnership or unincorporated association is to be regarded as the same firm for the purposes of the Handbook unless the context otherwise requires.
(2) [deleted]
(3) [deleted]

01/04/2013

GEN 2.2.19

In principle, it is possible to view a change of partners in a partnership, or a change in the membership of the unincorporated association, as the formation of a new partnership or association. GEN 2.2.18 R reflects section 32 of the Act (Partnerships and unincorporated associations), which provides for the continuing authorisation of partnerships and unincorporated associations following a change in partners or members if certain conditions are satisfied. GEN 2.2.18 R ensures a similar effect to section 32 in relation to the status of the partnership or unincorporated associations as a "firm" or "authorised person" for the purposes of the Handbook.

01/04/2013

European Economic Area (EEA)

GEN 2.2.21

The agreement on the European Economic Area, signed at Oporto on 2 May 1992, extends certain EU legislation to those EEA States which are not Member States of the EU, namely Norway, Iceland and Liechtenstein. References in the Handbook concerning the territorial scope of EU law should therefore be read as extending throughout the EEA where the context requires.

01/04/2013

Treaty of Lisbon

GEN 2.2.22

As a result of the Treaty of Lisbon, the European Union has replaced and succeeded the European Community. References in the Handbook to the European Community should therefore be interpreted as references to the European Union, where the context requires. In particular, references which are copied out directly from EU or UK legislation may contain references to the Community which should be read in conjunction with section 3 of the European Union (Amendment) Act 2008.

01/04/2013

Application of provisions made by both the FCA and the PRA

GEN 2.2.23

(1) This rule applies to Handbook provisions made by both the FCA and the PRA. It may affect their application by the FCA to PRA-authorised persons and PRA approved persons, and may affect their application by the PRA to any authorised person or approved person.
(2) Where a Handbook provision (or part of one) goes beyond the FCA's or PRA's powers or regulatory responsibilities, it is to be interpreted as applied by that regulator to the extent of that regulator's powers and regulatory responsibilities only.
(3) The extent of a Handbook provision is to be interpreted as cut back under GEN 2.2.23R (2) by the minimum degree necessary.

01/04/2013

GEN 2.2.24

The published Memorandum of Understanding between the FCA and the PRA describes their regulatory responsibilities.

01/04/2013

GEN 2.2.25

Examples of rules being interpreted as cut back by GEN 2.2.23 R include the following:

(1) BIPRU 4 imposes capital requirements that, for a PRA-authorised person such as a bank, are the exclusive responsibility of the PRA; accordingly this section is not applied by the FCA to a PRA-authorised person.
(2) SYSC 6.1.1 R requires a firm to maintain adequate policies and procedures to ensure compliance with its obligations under the regulatory system; SYSC 6.1.1 R should be interpreted:

(a) as applied by the FCA in respect of a PRA-authorised person's compliance with regulatory obligations that are the responsibility of the FCA (for example, in respect of a bank maintaining policies and procedures to ensure compliance with banking conduct requirements in BCOBS); and,
(b) as applied by the PRA in respect of a PRA-authorised person's compliance with those regulatory obligations that are the responsibility of the PRA (for example, in respect of a bank maintaining policies and procedures to ensure compliance with financial resources requirements in BIPRU).

(3) COMP 5.2.1 R sets out types of protected claims to be covered by the FSCS. The powers of the FCA and the PRA to make this type of rule are set out in the order made under section 213(1A) of the Act. The rule must be read as applying only to the extent of those powers. For example, the PRA has no power to make COMP 5.2.1 R (3) creating protected claims in connection with protected investment business, and the FCA has no power to make COMP 5.2.1 R (1) as creating protected claims for a protected deposit. As such, those provisions are to be interpreted as not applied by the PRA and FCA, respectively.

01/04/2013

GEN 4

Statutory status disclosure

GEN 4.1

Application

31/10/2008

Who? What?

GEN 4.1.1

This chapter applies to every firm and with respect to every regulated activity, except that:

(1) for an incoming ECA provider, this chapter does not apply when the firm is acting as such;
(2) for an incoming EEA firm which has permission only for cross-border services and which does not carry on regulated activities in the United Kingdom, this chapter does not apply;
(3) for an incoming firm not falling under (1) or (2), this chapter does not apply to the extent that the firm is subject to equivalent rules imposed by its Home State;
(4) for a UCITS qualifier, this chapter does not apply; and
(5) only GEN 4.5 (Statements about authorisation and regulation by the appropriate regulator) applies in relation to MiFID or equivalent third country business and only where that MiFID or equivalent third country business is not business falling within paragraph 2 (Transactions between an MTF operator and its users), 3 (Transactions concluded on an MTF) or 4 (Transactions concluded on a regulated market) of Part 1 of COBS 1 Annex 1.

01/04/2013

Where?

GEN 4.1.2

GEN 4.3 (Letter disclosure) applies in relation to activities carried on from an establishment maintained by the firm (or by its appointed representative) in the United Kingdom, subject to GEN 4.3.4 R (Exception: insurers).

01/04/2013

GEN 4.1.3

GEN 4.4 (Business for private customers from non-UK offices) applies in connection with a regulated activity carried on from an establishment of the firm (or its appointed representative) that is not in the United Kingdom.

01/04/2013

GEN 4.1.4

GEN 4.5 (Statements about authorisation and regulation by the appropriate regulator) applies in relation to activities carried on from an establishment maintained by the firm (or by its appointed representative) in the United Kingdom, provided that, in the case of the MiFID business of an EEA MiFID investment firm or the activities of an EEA UCITS management company, it only applies to business conducted within the territory of the United Kingdom.

01/04/2013

GEN 4.2

Purpose

01/12/2004

GEN 4.2.1

This chapter requires the provision of appropriate minimum information about the identity of the regulator that authorised a firm. It also governs the way in which a firm may describe its regulation by the appropriate regulator.

01/04/2013

GEN 4.2.1C

This chapter assists in the achievement the PRA's general objective to ensure the safety and soundness of firms.

01/04/2013

GEN 4.3

Letter disclosure

01/12/2004

Disclosure in letters to retail clients

GEN 4.3.1

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 disclosure in GEN 4 Annex 1 (firms that are not PRA-authorised persons) or GEN 4 Annex 1AR (PRA-authorised persons) as applicable.

01/04/2013

GEN 4.3.1A

Where a letter covers both activities to which this section applies and activities to which this section does not apply, the firm should comply with the rules in this chapter in relation to the business to which it applies.

01/04/2013

GEN 4.3.2B

For a UK domestic firm that is a PRA-authorised person, the required disclosure in GEN 4 Annex 1AR is "Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority".

04/10/2013

GEN 4.3.3

(1) GEN 4.3.1 R (Disclosure in letters to retail clients) covers letters delivered by hand, sent by post and sent by fax and also electronic mail, but not text messages, account statements, business cards or compliment slips (used as such).
(2) GEN 4.3.1 R (Disclosure in letters to retail clients) applies in relation to letters sent by any of the firm's employees, which includes its appointed representatives and their employees.
(3) Firms are likely to find it convenient to include the required disclosure in their letterhead.

01/04/2013

Exception: insurers

GEN 4.3.4

GEN 4.3.1 R (Disclosure in letters to retail clients) does not apply in relation to:

(1) general insurance business if:

(a) the State of the risk is an EEA State other than the United Kingdom; or
(b) the State of the risk is outside the EEA and the client is not in the United Kingdom when the contract of insurance is entered into; or

(2) long-term insurance business if:

(a) the client is habitually resident in an EEA State other than the United Kingdom; or
(b) the client is habitually resident outside the EEA and is not present in the United Kingdom when the contract of insurance is entered into.

01/04/2013

GEN 4.4

Business for retail clients from non-UK offices

01/11/2007

GEN 4.4.1

(1) If, in any communication:

(a) made to:

(i) (in relation to a non-investment insurance contract) a consumer;
(ii) (in relation to a home finance transaction) a customer; or
(iii) (in all other cases) a retail client; and

(b) in connection with a regulated activity carried on from an establishment of the firm (or its appointed representative) that is not in the United Kingdom;

the firm indicates that it is an authorised person, it must also, where relevant, and with equal prominence, give the information in (2) in writing.
(2) The information required is that in some or all respects the regulatory system applying will be different from that of the United Kingdom. The firm may also indicate the protections and complaints or compensation arrangements available under another relevant system of regulation.
(3) A firm need not provide the information required by (1) if it has already provided it in writing to the customer to whom the communication is made.

01/04/2013

GEN 4.5

Statements about authorisation and regulation by the appropriate regulator

01/04/2013

Application

GEN 4.5.1

This section applies to a firm:

(1) communicating with a customer; or
(2) communicating or approving a financial promotion other than:

(a) a financial promotion that would benefit from an exemption in the Financial Promotion Order if it were communicated by an unauthorised person;
(b) a promotion of an unregulated collective investment scheme that would breach section 238(1) of the Act if made by an authorised person (firms may not communicate or approve such promotions).

01/04/2013

GEN 4.5.2

GEN 4.5.1R (1) does not apply to a firm when communicating with an eligible counterparty.

01/04/2013

The duty

GEN 4.5.3A

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.

01/04/2013

GEN 4.5.4A

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.

01/04/2013

GEN 4.5.5

SUP 13A Annex 1 provides guidance on the application of the Handbook to an incoming EEA firm.

01/04/2013

GEN 4.5.6

(1) Neither an incoming EEA firm nor an incoming Treaty firm is authorised by the FCA or PRA when acting as such.
(2) It is likely to be misleading for a firm that is not authorised by the FCA or PRA to state or imply that it is so authorised. It is also likely to be misleading for a firm to state or imply that a client will have recourse to the Financial Ombudsman Service or the FSCS where this is not the case.
(3) [deleted]

01/04/2013

GEN 4 Annex 1A

Statutory status disclosure (PRA-authorised persons)

01/04/2013

This rule applies to firms that are PRA-authorised persons:

Type of firm

Required disclosure (Note 5)

(1)

UK domestic firm

"Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority"
(Note 1)

(2)

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."
(Notes 1, 2, 3, and 3a)

(3)

Incoming firm without a top-up permission

(a) "Authorised by [name of Home State regulator]" or
(b) "Authorised by [name of Home 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"
(Notes 1, 2, 2a, 2b and 3)

(4)

Incoming firm with a top-up permission

"Authorised by [name of Home 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"
(Notes 1, 2, 2b and 3)

(5)

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]"
(Note 4)

(6)

Society of Lloyd's

"Authorised under the Financial Services and Markets Act 2000"

Note 1 = A firm must use the formulation "Financial Conduct Authority" or "Prudential Regulation Authority" and not the abbreviated formulation "FCA" or "PRA" respectively.
Note 2 = An incoming firm or overseas firm is free to translate the name of its Home State regulator or overseas regulator into English if it wishes. In doing so, it must ensure that the State in which the regulator is based is clear.
Note 2a = An incoming firm without a top-up permission may make either disclosure (a) or disclosure (b) unless it otherwise indicates or implies to the customer that it is regulated or supervised by the FCA or PRA, in which case it must make disclosure (b).
Note 2b = An incoming EEA firm exercising establishment rights in the UK under the Banking Consolidation Directive, which do not include the activity of acceptance of deposits and other repayable funds, will be subject to branch liquidity and other supervision by the FCA.
Note 3 = 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.
Note 3a = An overseas firm that is not an incoming firm is only required to disclose its authorisation and/or regulated by an overseas regulator if it is so authorised and/or regulated.
Note 4 = If the appointed representative has more than one principal, the disclosure must relate to the principal or principals responsible for the regulated activity or 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.
Note 5 = Any firm listed in this table is permitted to add words to the relevant required disclosure statement but only if the firm 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.

01/04/2013

GEN 6

Insurance against financial penalties

GEN 6.1

Payment of financial penalties

06/03/2011

Application

GEN 6.1.1

This chapter applies to every firm, but only with respect to business that can be regulated under sections 137A (The FCA's general rules) and 137G (The PRA's general rules) of the Act.

01/04/2013

GEN 6.1.2

For the purposes of GEN 2.2.17 R (Activities covered by general rules), the chapter applies to regulated and unregulated activities carried on in the United Kingdom or overseas.

01/04/2013

Purpose

GEN 6.1.3

The purpose of this section is to ensure that financial penalties are paid by the person on whom they are imposed.

01/04/2013

Interpretation

GEN 6.1.4

In this chapter 'financial penalty' means a financial penalty that the appropriate regulator has imposed, or may impose, under the Act. It does not include a financial penalty imposed by any other body.

01/04/2013

Payment of a penalty imposed on an employee

GEN 6.1.4A

No firm, except a sole trader, may pay a financial penalty imposed by the appropriate regulator on a present or former employee, director or partner of the firm or of an affiliated company.

01/04/2013

Insurance against financial penalties

GEN 6.1.5

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

01/04/2013

GEN 6.1.6

The Society, managing agents and members' agents must not cause or permit any member, in the conduct of his insurance business at Lloyd's, 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.

01/04/2013

GEN 6.1.7

GEN 6.1.4A R, GEN 6.1.5 R and GEN 6.1.6 R do not prevent a firm or member from entering into, arranging, claiming on or making any payment under a contract of insurance which indemnifies any person against all or part of the costs of defending appropriate regulator enforcement action or any costs they may be ordered to pay to the appropriate regulator.

01/04/2013

Transitional Provisions and Schedules

GEN TP 1

Transitional provisions

GEN TP 1.3

(3) Transitional Provisions applying to GEN only

(1)

(2) Material to which the transitional provision applies

(3)

(4) Transitional provision

(5) Transitional provision: dates in force

(6) Handbook provision: coming into force

Expired

Expired

Expired

Expired

GEN 6.1 does not:
(1) apply to an unamended contract of insurance, first entered into on or before 24 July 2003; or
(2) prohibit a firm from claiming on, or making a payment under, a contract of insurance:
(a) in connection with a financial penalty imposed by the FSA pursuant to a warning notice issued before 25 July 2003; or
(b) first entered into between 25 July 2003 and 31 December 2003 in respect of a financial penalty imposed by the FSA by a final notice issued on or before 31 December 2003.
(For these purposes only, a contract of insurance will be regarded as unamended if:
(i) it was amended on or before 24 July 2003; or
(ii) it was amended after 24 July 2003, but the amendments did not affect the duration or scope of any indemnity against a financial penalty imposed by the FSA under the Act.)

From 1 January 2004

1 January 2004

GEN 4.3.1 R

Expired

GEN 4.3.1 R

Expired

GEN 5 Annex 1 G

A firm may continue to use a keyfacts logo which is not accompanied by a regulatory mark (®).

From 6 November 2006 to 6 November 2007

6 November 2006

GEN 4.3.1 R

(1) For the purpose of this rule, a regulated activity does not include a home purchase activity or home reversion activity.
(2) If a firm in a letter (or electronic equivalent) which it or its employees send to a customer, with a view to or in connection with the firm carrying out a home purchase activity or a reversion activity, makes a statement about its statutory or regulated status under the Act for carrying on that regulated activity, the firm must include the disclosure in GEN 4 Annex 1 in that letter.

From 6 April 2007 for six months

6 April 2007

GEN 4.5

(1) A firm is not required to comply with GEN 4.5.

(2) In relation to the regulated activity of accepting deposits, an incoming EEA firm may not rely on this transitional rule and must comply with GEN 4.5.

From 31 October 2008 to 30 September 2009.

31 October 2008.

GEN 4 Annex 1

(1) A firm may comply with GEN 4 Annex 1 as in force on 30 October 2008.

(2) In relation to the regulated activity of accepting deposits, an incoming EEA firm may not rely on this transitional rule and must comply with GEN 4.5.

From 31 October 2008 to 30 September 2009.

31 October 2008.

GEN 4.3.1 R, GEN 4 Annex 1 and GEN 4 Annex 1A

A firm may comply with GEN 4.3.1 R and GEN 4 Annex 1 as in force on 31 March 2013.

From 1 April 2013 till 1 April 2014

1 April 2013

GEN 4.5.3 R and GEN 4.5.4 R

A firm can continue to make statements about authorisation and regulation by the FSA as long as such statements would not have breached GEN 4.5.3 R and GEN 4.5.4 R if made on 31 March 2013.

From 1 April 2013 till 1 April 2014

1 April 2013

02/04/2013

GEN TP 2

Transitional Provisions applying across the FCA and PRA Handbooks

Table: 1 Transitional Provisions applying across the FCA and PRA Handbooks

(1)

The purpose of these transitional provisions is to assist a smooth transition at cutover. They comprise various technical provisions that will apply across the whole FCA and PRA Handbooks and achieve results that most people would probably expect to apply in any event.

(2)

These transitional provisions consist of general transitional provisions, which apply at a high level of generality, and more specific transitional provisions in relation to record keeping and notification rules.

(3)

The more specific transitional provisions relating to record keeping and notification rules override the general transitional provisions. Both the general and the more specific transitional provisions do not apply if the context requires otherwise and are subject to any more specific transitional provision elsewhere in the FCA and PRA Handbooks relating to the matter.

(4)

Definitions for these transitional provisions, additional to those in the Glossary, are provided at paragraph 15 of the table.

Table 2: Transitional Provisions applying across the FCA and PRA Handbooks

(1)

(2) Material to which the transitional provision applies

(3)

(4) Transitional provision

(5) Transitional provision: dates in force

(6) Handbook provision: coming into force

Every provision in the FCA and PRA Handbooks, unless the context otherwise requires and subject to any more specific transitional provision relating to the matter

Acts under pre-cutover provisions
Anything done, or having effect as done, under or for the purposes of any pre-cutover provision has effect as if done under or for the purposes of any substantially similar provision in the FCA and PRA Handbooks.

From cutover

Cutover

Paragraph 1

For example, a firm may rely on action to establish the best price, taken shortly before cutover for the purposes of the FSA's best execution rule, for the purposes of compliance with the FCA's best execution rule, even if the transaction is executed after cutover.

From cutover

Cutover

Every provision in the FCA and PRA Handbooks, unless the context otherwise requires and subject to any more specific transitional provision relating to the matter

Series of events
If the application of any provision in the FCA or PRA Handbooks is dependent on the occurrence of a series of events, some of which occur before, and some of which occur after, cutover, the provision applies with respect to the events that occur after cutover.

From cutover

Cutover

Paragraph 3

For example, a firm which executes an aggregated order shortly before cutover must comply with COBS 11.3.8 R (Requirement for fair allocation) if the allocation occurs after cutover.

From cutover

Cutover

Every provision in the FCA and PRA Handbooks, unless the context otherwise requires and subject to any more specific transitional provision relating to the matter

Deemed references to pre-cutover provisions
Any reference (express or implied) in a provision in the FCA or PRA Handbooks to a provision of or made under the Act is to be read (so far as the context permits and according to the context) as being or including, in relation to times, circumstances and purposes before cutover, a reference to any substantially similar pre-cutover provision.

From cutover

Cutover

Paragraph 5

For example, SUP 11.6.4 R requires a firm authorised by the FCA to notify the FCA when a change in control, previously notified under SUP 11.4.2 R, has taken place. Such a firm must notify a change in control that takes place after cutover, even if previously notified under SUP 11.4.2 R as made by the FSA (and SUP 11.6.4 R is to be read as referring to that pre-cutover provision).

From cutover

Cutover

Every provision in the FCA and PRA Handbooks, unless the context otherwise requires and subject to any more specific transitional provision relating to the matter

Time starting before cutover
If, at cutover, time has begun to run for any purpose under any pre-cutover provision applicable to a firm or other person, then: (1) time will be regarded as having started to run, for the purposes of any substantially similar provision in the FCA or PRA Handbooks, when it started to run for that other purpose; and (2) the firm or other person will be relieved of its obligation to comply with the relevant pre-cutover provision if and to the extent that it complies with the substantially similar provision as extended by this transitional provision.

From cutover

Cutover

Paragraph 7

For example, certain firms were required to submit product sales data reports within 20 business days of the end of the quarter by SUP 16.11.3 R as made by the FSA. If the quarter end fell five days before cutover, the firms must still submit the report within 20 business days, but in accordance with SUP 16.7.8 R as made by the FCA.

From cutover

Cutover

Every rule in the FCA and PRA Handbooks requiring a record to be made or retained (see schedule 1), unless the context otherwise requires and subject to any more specific transitional provision relating to the matter

Record keeping
A firm or other person will not contravene a rule in the FCA or PRA Handbooks requiring a record to be made or retained to the extent that the firm or other person:
(1) made a record of the matter before cutover in accordance with the rule or with a substantially similar pre-cutover provision applicable to the firm or other person; and
(2) retains that record as if the rule was in force when the record was made.

From cutover

Cutover

This transitional provision makes specific provision, in relation to record keeping, for the matters covered by paragraph 1. It is included for clarity and overrides those general transitional provisions.

From cutover

Cutover

A firm or other person must retain a record in accordance with a rule in the FCA or PRA Handbooks requiring a record of that sort to be retained, if the firm or other person was required to make and retain that record before cutover under a substantially similar pre-cutover provision applicable to the firm or other person.

From cutover

Cutover

Paragraph 9

This transitional provision makes specific provision, in relation to records, for the matters covered by paragraphs 5 and 7. It is included for clarity and overrides those general transitional provisions.

From cutover

Cutover

Every notification rule in the FCA and PRA Handbooks (see schedule 2), unless the context otherwise requires and subject to any more specific transitional provision relating to the matter

Notification
A firm (or its auditor, appointed actuary or appropriate actuary) or other person will not contravene a notification rule in the FCA or PRA Handbooks to the extent that notice of the relevant matter was given to the FSA before cutover in accordance with:
(1) the notification rule; or
(2) a substantially similar pre-cutover provision applicable to the firm or other person.

From cutover

Cutover

Paragraph 13

This transitional provision makes specific provision, in relation to notifications, for the matters covered by paragraphs 1 and 3. It is included for clarity and overrides those general transitional provisions.

From cutover

Cutover

As paragraphs 1 to 14

Definitions
In these transitional provisions:
(1) "pre-cutover provision" means a provision repealed or revoked by, or under, the Financial Services Act 2012 or a rule or guidance of the FSA, including (where the context permits) any relevant provision which it replaced before cutover;

From cutover

Cutover

(2) "substantially similar" means substantially similar in purpose and effect; and

(3) a reference to a "provision" in the FCA or PRA Handbooks means every type of provision, including rules, guidance, provisions in codes, and so on.

Paragraph 17

Application for provisions which are not rules
The purpose of paragraph 17 is to ensure that the transitional provisions in paragraphs 1 to 8 apply throughout the FCA and PRA Handbooks.

From cutover

Cutover

Statements of Principle, the Code of Practice for Approved Persons and Code of Market Conduct and directions and requirements and guidance and other provisions in the FCA Handbook and PRA Handbook (that is, provisions with the status letter "D" or "G" in the margin or heading) unless the context otherwise requires and subject to any more specific transitional provision relating to the matter

The provisions in paragraphs 1 to 10 apply to every person to whom the provisions referred to in column (2) apply as if the rules in those paragraphs were part of those provisions.

From cutover

Cutover

01/04/2013

GEN Sch 1

Record keeping requirements

01/12/2004

GEN Sch 1.1

There are no record keeping requirements in GEN.

01/04/2013

GEN Sch 2

Notification requirements

01/12/2004

GEN Sch 2.1

The aim of the guidance in the following table is to give the reader a quick overall view of the relevant requirements for notification and reporting.

It is not a complete statement of those requirements and should not be relied on as if it were.

01/04/2013

GEN Sch 2.2

Handbook reference

Matter to be notified

Contents of notification

Trigger event

Time allowed

GEN 1.3.2 R

An emergency which makes it impracticable for a firm to comply with a particular rule.

Notification of the emergency and of the steps the firm is taking and proposes to take to deal with its consequences

An emergency which makes it impracticable for a firm to comply with a particular rule.

Notification as soon as practicable

01/04/2013

GEN Sch 3

Fees and other required payments

01/12/2004

GEN Sch 3.1

There are no requirements for fees or other payments in GEN. FEES 2 (General Provisions) contains general provisions relating to the payment of fees.

01/04/2013

GEN Sch 6

Rules that can be waived

01/12/2004

GEN Sch 6.1B

As a result of section 138A of the Act (Modification or waiver of rules) the PRA has power to waive all its rules, other than rules made under section 137O (Threshold condition code). However, if the rules incorporate requirements laid down in European directives, it will not be possible for the PRA to grant a waiver that would be incompatible with the United Kingdom's responsibilities under those directives.

01/04/2013

GEN Sch 6.2

GEN 2.1.8R is made by FOS Ltd and not by the appropriate regulator and cannot be waived by the appropriate regulator.

Every other rule in GEN can be waived by the appropriate regulator if, and to the extent that, the rules elsewhere in its Handbook which it modifies or to which it otherwise relates can be waived by the appropriate regulator.

01/04/2013

PS1/13 - Regulatory Reform: amendments to the Prudential Regulation Authority Handbook	https://www.bankofengland.co.uk/prudential-regulation/publication/2013/regulatory-reform-amendments-to-the-pra-handbook
- Legal Cutover
- Handbook Administration Instrument 2 2013	https://www.bankofengland.co.uk/prudential-regulation/publication/2014/pra-administration-instruments