Source: https://www.handbook.fca.org.uk/handbook/SUP/6/2.html?date=2016-12-01
Timestamp: 2019-09-18 07:48:14
Document Index: 155963357

Matched Legal Cases: ['art 4', 'art 4', 'art 4', 'art 4', 'art 4', 'art 4', 'art 4', 'art 4', 'art 4', 'art 4', 'art 4', 'art 4', 'art 4', 'art 4', 'art 4', 'art 4', 'art 4', 'art 4', 'art 4', 'art 4', 'art 4', 'art 4', 'art 4', 'art 4', 'art 4', 'art 4', 'art 4', 'art 4', 'art 4']

SUP 6.2 Introduction - FCA Handbook
SUP 6.2.1G 01/04/2013 RP
A firm authorised under Part 4A5 of the Act (Permission to carry on regulated activity) has a single Part 4A permission5 granted by the FCA or the PRA. A firm's Part 4A permission5 specifies all or some of the following elements (see PERG 2 Annex 2 (Regulated activities and the permission regime) and the information online at the FCA and PRA websites):5
a description of the activities the firm may carry on, including any limitations;
the specified investments involved; and
if appropriate, requirements.
SUP 6.2.2G 01/04/2013 RP
Under section 20(1) and 20(1A)5 of the Act (Authorised persons acting without permission), a firm is prohibited from carrying on a regulated activity in the United Kingdom (or purporting to do so) otherwise than in accordance with its permission.
SUP 6.2.3G 01/04/2013
5If an FCA-authorised person wishes to change its Part 4A permission to:
add a regulated activity, other than a PRA-regulated activity; or
remove a regulated activity from those to which the permission relates; or
vary the description of a regulated activity to which the permission relates; or
cancel the permission;
it can apply to the FCA under section 55H of the Act (Variation by FCA at request of authorised person).
SUP 6.2.3BG 01/04/2013 RP
5If an FCA-authorised person wishes to change its Part 4A permission, by adding to the regulated activities to which the permission relates one or more regulated activities, which include a PRA-regulated activity, it can apply to the PRA under section 55I of the Act (Variation by PRA at request of authorised person). The PRA can determine such an application only with the consent of the FCA.
SUP 6.2.3CG 01/04/2013 RP
5If a firm with a Part 4A permission wishes the FCA to:
impose a new requirement; or
vary a requirement imposed by the FCA; or
cancel such a requirement;
it can apply to the FCA under section 55L(5) of the Act (Imposition of Requirements by FCA).
SUP 6.2.4G 01/04/2013 RP
A firm intending to expand its business should assess, taking appropriate professional advice where necessary, whether it will need to make an application in accordance with SUP 65 before making any changes to its business.
1If a firm intends to transfer its business to a different legal entity it will need to apply to the relevant regulator5 for cancellation of its Part 4A permission5 and the entity to which the business is to be transferred will need to apply for a Part 4A permission.5
SUP 6.2.4BG 01/04/2013
5SUP 6.2.5 G sets out the differences between these types of applications and the circumstances in which they should be made.
SUP 6.2.5G 01/04/2013 RP
Variation and cancellation of Part 4A permission and imposition, variation and cancellation of requirements. See SUP 6.2.3A G to SUP 6.2.3E G5
Variation of Part 4A permission
Cancellation of Part 4A permission
Imposition, variation and cancellation of requirements
What does the application apply to?
Individual elements of a firm's Part 4A permission. Variations may involve adding or removing categories of regulated activity or specified investments or varying or removing any limitations in the firm's Part 4A permission.
A firm's entire Part 4A permission and not individual elements within it.
Any requirement imposed on a firm with a Part 4A permission. Requirements may involve requiring the firm concerned to take or refrain from taking a specified action.
In what circumstances is it usually appropriate to make an application?
1. wishes to change the regulated activities it carries on in the United Kingdom under a Part 4A permission (SUP 6.3); or
2. has the ultimate intention of ceasing carrying on regulated activities but due to the nature of those regulated activities (for example, accepting deposits, or insurance business) it will require a long term (normally over six months) to wind down (run off) its business (see SUP 6.2.8 G to SUP 6.2.11 G and SUP 6 Annex 4).
If a firm: 1. has ceased to carry on all of the regulated activities for which it has Part 4A permission (SUP 6.4); or 2. wishes or expects to cease carrying on all of the regulated activities for which it has Part 4A permission in the short term (normally not more than six months). In this case, the firm may apply to cancel its Part 4A permission prior to ceasing the regulated activities (see SUP 6.4.3 G).
1. wishes to have a new requirement imposed on it; or
2. wishes to vary or cancel an existing requirement imposed by the FCA or PRA (for example, if anything relating to the firm's individual circumstances change and any existing requirement should be varied or cancelled).
SUP 6.2.6G 01/04/2013 RP
A firm which is seeking:
to vary its Part 4A permission5 substantially; or
to5 cancel its Part 4A permission; or5
the imposition of a new requirement and/or the variation or cancellation of any existing requirement;5
should discuss its plans with its supervisory contact at the relevant regulator5 as early as possible before making an application, in order to comply with Principle 11 (see SUP 15.3.7 G). These discussions will help the relevant regulator5 and the firm to agree the correct approach for the firm.
SUP 6.2.7G 01/04/2013 RP
If a firm intends to cease carrying on one or more regulated activities permanently, it should give prompt notice to the appropriate regulator5 to comply with Principle 11 (see SUP 15.3.8 G (1)(d)). A firm should consider whether it needs to notify the appropriate regulator5 before applying to vary or cancel its Part 4A permission.5
Firms with long term liabilities to customers
SUP 6.2.8G 01/04/2013 RP
Discussions with the appropriate regulator5 are particularly relevant where the firm has to discharge obligations to its customers or policyholders before it can cease carrying on a regulated activity. This may be the case, for example, where the firm is an insurer, a bank a dormant account fund operator,4 or, as is often the case, holding client money or customer assets.
SUP 6.2.9G 01/04/2013 RP
If an insurer,4 a bank, or a dormant account fund operator4 wishes to cease carrying on all regulated activities for which it has Part 4A permission,5 it will usually be necessary to wind down the business over a long term period which is normally more than six months. This may also be the case for a firm holding client money or customer assets. In these circumstances, it will usually be appropriate for the firm to apply for variation of its Part 4A permission and/or imposition of a new requirement, variation of any existing requirement or cancellation of such a requirement5 before commencing the wind-down. A firm should only make an application for cancellation of permission when it expects to complete its wind-down (run-off) within six months.
A firm which is winding down (running off) its activities should contact its supervisory contact at the appropriate regulator5 to discuss its circumstances. Discussions will focus on5 the firm's winding down plans and the need for the firm to vary or cancel itsPart 4A permission and/or the need to impose a new requirement, vary any existing requirement or cancel such a requirement. Following these discussions the firm should usually make the relevant application, as appropriate.5
SUP 6.2.10AG 01/04/2013 RP
5In certain circumstances the FCA and/or the PRA may use their own-initiative powers (see SUP 7 and EG 8) (Variation and cancellation of permission on the FCA's own initiative and intervention against incoming firms)).
Specific guidance on the additional procedures for a firm winding down (running off) its business in the circumstances discussed in SUP 6.2.8 G is in SUP 6 Annex 4.
The guidance in SUP 6 Annex 4 applies to any firm that is applying for variation of Part 4A permission or for the imposition, variation or cancellation of a requirement before it applies for cancellation of Part 4A permission5 to enable it to wind down (run off) its business over a long term period of six months of more. It will apply to most insurers and banks and, in some circumstances, to firms holding client money or customer assets.
If a firm wishes to cease carrying on some of its regulated activities, or the specified investments in respect of which the activities are carried on, the appropriate regulator5 may consider it appropriate for the firm to comply with the additional procedures in SUP 6 Annex 4. This would depend on the scale and nature of the regulated activities concerned. This might be the case, for example, if the firm is ceasing a significant part of its business in respect of which it has outstanding obligations to customers and it is believed5 that the additional procedures would protect consumers.
UK firms exercising EEA or Treaty rights
SUP 6.2.12G 01/04/2013 RP
A UK firm should assess the effect of any change to its Part 4A permission, or any requirements,5 on its ability to continue to exercise any EEA right or Treaty right and discuss any concerns with its appropriate supervisory contact(s). This5 may also change the applicable provisions with which it is required to comply by a Host State.
SUP 6.2.13G 01/04/2013 RP
A UK firm which, as well as applying to vary or cancel its Part 4A permission,5 wishes to vary or terminate any business which it is carrying on in another EEA State under one of the Single Market Directives, should follow the procedures in SUP 13 (Exercise of passport rights by UK firms) on varying or terminating its branch or cross border services business.
SUP 6.2.14G 01/04/2013 RP
A firm making an application in accordance with SUP 65 which requires any approval from the Society of Lloyd's should apply to the Society for this at the same time as applying to the relevant regulator.5 See SUP 6 Annex 4 for additional procedures.