Skills, Knowledge and Expertise

1.1

Unless otherwise stated, this Part applies to a CRR firm

1. (1) with respect to the carrying on of the following from an establishment in the UK:
1. (a) regulated activities;
2. (b) activities that constitute dealing in investments as principal, disregarding the exclusion in article 15 of Regulated Activities Order;
3. (c) ancillary activities;
4. (d) in relation to MiFID business, ancillary services; and
5. (e) unregulated activities in a prudential context; and
2. (2) with respect to the carrying on of passported activities by it from a branch in another EEA state;
3. (3) in a prudential context with respect to activities wherever they are carried on; and
4. (4) taking into account any activity of other members of a group of which the firm is a member.

2.1

A firm must employ personnel with the skills, knowledge and expertise necessary for the discharge of the responsibilities allocated to them.

[Note: Art. 5(1)(d) of the MiFID implementing Directive]

3.1

A firm must ensure that the performance of multiple functions by its relevant persons does not and is not likely to prevent those persons from discharging any particular functions soundly, honestly and professionally.

[Note: Art. 5(1)(g) of the MiFID implementing Directive]

3.2

The senior personnel of a firm must define arrangements concerning the segregation of duties within the firm and the prevention of conflicts of interest.

[Note: Art. 88 of the CRD]

4.1

A firm must ensure that its relevant persons are aware of the procedures which must be followed for the proper discharge of their responsibilities.

[Note: Art. 5(1)(b) of the MiFID implementing Directive]

5.1

The systems, internal control mechanisms and arrangements established by a firm in accordance with this Part must take into account the nature, scale and complexity of its business and the nature and range of financial services and activities undertaken in the course of that business.

[Note: Art. 5(1) final paragraph of the MiFID implementing Directive]

5.2

A firm must monitor and, on a regular basis, evaluate the adequacy and effectiveness of its systems, internal control mechanisms and arrangements established in accordance with this Part, and take appropriate measures to address any deficiencies.

[Note: Art. 5(5) of the MiFID implementing Directive]

6.1

Where a firm is a member of a consolidation group, the firm must ensure that the risk management processes and internal control mechanisms at the level of the consolidation group of which it is a member comply with the obligations set out in 3.2 on a consolidated basis.

6.2

Compliance with the obligations referred to in 6.1 must enable the consolidation group to have arrangements, processes and mechanisms that are consistent and well integrated and that any data relevant to the purpose of supervision can be produced.

[Note: Art 109(2) of the CRD]