GEN General Provisions sourcebook

Part

GEN General Provisions sourcebook

Printed on: 06/11/2024

Rulebook at: 31/10/2007

Chapters

GEN 1 FSA approval and emergencies
GEN 2 Interpreting the Handbook
GEN 3 FSA Fees: General Provisions
GEN 4 Statutory status disclosure
GEN 5 The FSA logo and the keyfacts logo
GEN 6 Insurance against financial penalties
Transitional Provisions and Schedules

GEN 1

FSA approval and emergencies

GEN 1.1

Application

01/12/2004

GEN 1.1.2

GEN 1.1.1 R (2) reflects section 266 of the Act (Disapplication of rules).

21/06/2001

GEN 1.2

Referring to approval by the FSA

01/12/2004

GEN 1.2.1

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

21/06/2001

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 of the FSA.
(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 or ICVC;
(d) a recognised scheme has that status;
(e) the firm's approved persons have been approved by the FSA for the purposes of section 59 of the Act (Approval for particular arrangements);
(f) the firm has been given express written approval by the FSA 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.

21/06/2001

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 FSA.

01/01/2006

GEN 1.3

Emergency

01/12/2004

GEN 1.3.1

The FSA 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 or small e-money issuer 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.

01/05/2003

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 FSA 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 Services Authority, 25 The North Colonnade, Canary Wharf, London E14 5HS (tel: 0845 606 9966).

01/05/2003

GEN 1.3.3

A firm should continue to keep the FSA 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).

21/06/2001

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.

01/05/2003

GEN 1.3.5

GEN 1.3.2 R operates on the FSA's rules. It does not affect the FSA'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 FSA may exercise its own-initiative power in appropriate cases to vary a firm's Part IV permission based on a failure or potential failure to satisfy the threshold conditions (see SUP 7 (Applying the FSA's requirements to individual firms) and EG 8 (Variation and cancellation of permission on the FSA's own initiative and intervention against incoming firms)).

28/08/2007

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.

06/07/2006

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.

06/07/2006

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.

21/06/2001

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.

21/06/2001

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 149 (Evidential provisions); and
(2) incorporates the status letter "E" in the margin or heading as part of the rule.

21/06/2001

GEN 2.2.4

(1) The rules to which section 149 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 GEN 2.1.4 E, and 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".

21/06/2001

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.

01/01/2006

Use of defined expressions

GEN 2.2.6

Expressions with defined meanings appear in italics in the Handbook.

21/06/2001

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.

31/12/2004

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".

21/06/2001

GEN 2.2.9

Unless the context otherwise requires, 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).

21/06/2001

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.

21/06/2001

Application of the Interpretation Act 1978

GEN 2.2.11

The Interpretation Act 1978 applies to the Handbook.

21/06/2001

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.

21/06/2001

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.

05/12/2005

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.

05/12/2005

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.

21/06/2001

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.

21/06/2001

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 such as the requirement to treat customers fairly under Principle 6. COB 1.8 (Application to electronic media) contains further guidance in respect of electronic communication with or for customers. 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.

21/06/2001

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.

21/06/2001

Activities covered by general rules

GEN 2.2.17

A general rule (that is a rule made section 138 of the Act (General rule-making power)) 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.

21/06/2001

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]

06/07/2006

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. In particular, this continuity does not apply if a limited liability partnership or individual sole trader succeeds to the business of a dissolved partnership; authorisation of the limited liability partnership or sole trader would need to be applied for. 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.

06/07/2006

Designated investment exchanges

GEN 2.2.20

In the Glossary, the definition of designated investment exchange lists certain investment exchanges. Further information on designated investment exchanges, including guidance on the addition of an investment exchange to the list, is set out in GEN 2 Annex 1 and the obligation to pay the application fee is set out in FEES 3.2.

01/01/2006

GEN 2 Annex 1

Designated investment exchanges

01/12/2004

Introduction

A designated investment exchange is an exchange appearing in the list of such exchanges in the Glossary.

Benefits of designation

Under certain rules, firms may treat transactions effected on a designated investment exchange in the same way as transactions on RIEs (for example, see COB 5 Annex 1 E CASS 2 and COB 7.11).

Criteria for inclusion in the list of designated investment exchanges

Before adding an investment exchange to the list of designated investment exchanges in the Handbook, the FSA will comply with all the requirements imposed by the Act in relation to the exercise of its rule-making powers. This will include consulting on the proposed amendment to the list.

In considering compatibility of the proposed addition with the regulatory objectives, the FSA will determine whether the investment exchange provides an appropriate degree of protection for consumers having regard in particular to:

(1)

the relevant law and practice, including the regulatory framework in which the investment exchange operates, in the country or territory in which the investment exchange's head office is situated and any other relevant country or territory; and

(2)

the rules and practices of the investment exchange.

Only investment exchanges which do not carry on a regulated activity in the United Kingdom and are not regulated markets may be added to the list. This is because an investment exchange carrying on a regulated activity in the United Kingdom will need to apply for recognition as an RIE, or authorisation, and because a regulated market is usually treated in the same way as an RIE in the rules.

Applications to be added to the list of designated investment exchanges

An application to be added to the list should be in writing and delivered to the FSA by:

(1)

post to:
The Financial Services Authority
25 The North Colonnade
Canary Wharf
London
E14 5HS; or

(2)

leaving the application at that address.

In support of the application, an investment exchange should provide information on the questions set out in the table below.

An application will not be considered by the FSA until the application fee has been paid. See FEES 3.2

Designated investment exchange questionnaire

In what way are members subject to formal supervision by the exchange or another supervisory or regulatory body? Describe how capital resources of members are monitored on an ongoing basis and how this is related to business done.

What powers does the exchange or any other supervisory or regulatory body have to intervene in a member's business in the event of misconduct, financial difficulties or otherwise?

What are the clearing arrangements of the exchange? How does the exchange ensure performance of a contract between its members? If relevant, what type of contract guarantee is available?

How is price information in respect of contracts effected on the exchange disseminated to investors, particularly those investors in the United Kingdom?

What are the exchange's arrangements for reporting and recording of transactions effected on the exchange? Please describe.

Does the exchange, or any other supervisory or regulatory body, require members to segregate the money and assets of the member's clients from the money and assets of the member? If so, please describe in outline how this operates. If not, are investors protected in any other way in the event of the insolvency of a member or the exchange?

Does the exchange have procedures for the investigation of complaints? Please describe what they are.

Does the exchange classify the different contracts traded on it in terms of liquidity? Is it possible to identify certain contracts which are more liquid than others and in which a ready market might be considered to exist?

01/01/2006

GEN 3

FSA Fees: General Provisions

GEN 3.1

GEN 3 [deleted: the general provisions in relation to fees are set out in FEES 2 (General Provisions)]

01/01/2006

GEN 3.2

GEN 3 [deleted: the general provisions in relation to fees are set out in FEES 2 (General Provisions)]

01/01/2006

GEN 3.3

GEN 3 [deleted: the general provisions in relation to fees are set out in FEES 2 (General Provisions)]

01/01/2006

GEN 4

Statutory status disclosure

GEN 4.1

Application and purpose

01/12/2004

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; and
(4) for a UCITS qualifier, this chapter does not apply.

01/03/2003

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).

01/03/2003

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.

01/03/2003

GEN 4.2

Purpose

01/12/2004

GEN 4.2.1

The purpose of this chapter is to amplify Principle 7 (Communications with clients), which requires a firm to pay due regard to the information needs of its clients. This chapter requires the provision of appropriate minimum information about the identity of a firm's regulator in a way which is as consistent as practicable across the whole range of activities regulated by the FSA This assists in the achievement of the regulatory objectives of consumer protection, public awareness and market confidence.

01/03/2003

GEN 4.2.2

There are other pre-contract information requirements outside this chapter, including:

(1) for financial promotions, in COB 3 (Financial promotion)
(2) for designated investment business, in COB 4.2 (Terms of business and client agreements with customers), COB 4.3 (Disclosing information about services, fees and commission - packaged products), COB 5.5 (Information about the firm), COB 6.1 to COB 6.5 (Product disclosure) and CASS (Client assets);
(3) for non-investment insurance contracts , in ICOB 4 (Advising and selling standards); and ICOB 5 (Product disclosure);
(4) for electronic commerce activities by outgoing or domestic ECA providers, in ECO 2 (Outgoing ECA providers) and ECO 3 (Domestic (and non-EEA) ECA providers); and
(5) for regulated mortgage contracts and home purchase plans, initial disclosure requirements in MCOB 4 , pre-application disclosure requirements in MCOB 5, and disclosure at the offer stage in MCOB 6; and
(6) for equity release transactions, initial disclosure requirements in MCOB 8.4, pre-application disclosure requirements in MCOB 9.4 and disclosure at the offer stage in MCOB 9.5

06/04/2007

GEN 4.3

Letter disclosure

01/12/2004

Disclosure in letters to private customers

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 private customer, with a view to or in connection with the firm carrying on a regulated activity, includes the disclosure in GEN 4 Annex 1.

01/06/2005

GEN 4.3.2

For a UK domestic firm, the required disclosure in GEN 4 Annex 1 is "Authorised and regulated by the Financial Services Authority".

01/03/2003

GEN 4.3.3

(1) GEN 4.3.1 R (Disclosure in letters to private customers) 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 private customers) 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.

01/03/2003

Exception: insurers

GEN 4.3.4

GEN 4.3.1 R (Disclosure in letters to private customers) 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.

01/03/2003

Exception: authorised professional firms

GEN 4.3.5

For an authorised professional firm, GEN 4.3.1 R (Disclosure in letters to private customers) does not apply with respect to its non-mainstream regulated activities.

01/03/2003

Exception: use of third party processors in home finance and insurance mediation activities

GEN 4.3.6

(1) Where a firm has outsourced activities to a third party processor other than advising on life policies, GEN 4.3.1 R does not apply to that third party processor when acting as such, so long as the outsourcing firm ensures that the third party processor and its employees comply with that rule as if it was the firm and they were employees of the firm.
(2) Where an appointed representative has outsourced insurance mediation activities other than advising on life policies or home finance mediation activities to a third party processor, GEN 4.3.1 R does not apply to that third party processor when acting as such, so long as the appointed representative's principal ensures that the third party processor and its employees comply with that rule as if it was the appointed representative and they were the employees of the appointed representative.
(3) Where an appointed representative of a firm is carrying on:

(a) insurance mediation activities other than advising on life policies; or
(b) home finance mediation activities;

which have been outsourced to it by the firm, GEN 4.3.1 R does not apply to the firm when the appointed representative is carrying on the outsourced activities, so long as the firm ensures that the appointed representative and its employees comply with that rule as if it was the firm and they were employees of the firm.

06/04/2007

GEN 4.4

Business for private customers from non-UK offices

01/12/2004

GEN 4.4.1

(1) If, in any communication:

(a) made to:

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

06/04/2007

GEN 4.4.2

ICOB 4.2.19 R contains provisions relating to communications by insurance intermediaries from outside the United Kingdom in connection with non-investment insurance contracts with or for a retail customer. The definition of insurance intermediary includes an insurer when the insurer is carrying on insurance mediation activities.

14/01/2005

GEN 4 Annex 1

Statutory status disclosure

01/12/2004

Type of firm

Required disclosure (Note 5)

(1)

UK domestic firm; or overseas firm (which is not an incoming firm)

"Authorised and regulated by the Financial Services Authority" (Note 1)

(2)

Incoming firm without a top-up permission

(a) "Authorised by [name of Home State regulator] and regulated by the Financial Services Authority for the conduct of UK business" (Notes 1, 2, and 3)

(3)

Incoming firm with a top-up permission

"Authorised by [name of Home State regulator] and by the Financial Services Authority; regulated by the Financial Services Authority for the conduct of UK business"
(Notes 1, 2 and 3)

(4)

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)

(5)

Society of Lloyd's

"Authorised under the Financial Services and Markets Act 2000"

Note 1 = A firm must use the formulation "Financial Services Authority" and not the abbreviated formulation "FSA".

Note 2 = An incoming firm is free to translate the name of its Home State regulator into English if it wishes. In doing so, it must ensure that the State in which the regulator is based is clear.
Note 3 = An incoming firm may state the type of business that it conducts, for example, that it is regulated by the Financial Services Authority for the conduct of investment business in the UK.

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.

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, remain clear, fair and not misleading . For example, an authorised professional firm may wish to make it clear that it is also regulated by its professional body.

01/03/2003

GEN 5

The FSA logo and the keyfacts logo

GEN 5.1

Application and purpose

01/12/2004

Application

GEN 5.1.1

This chapter contains:

(1) guidance for firms and appointed representatives on the circumstances in which the FSA permits firms and their appointed representatives to reproduce the FSA logo;
(2) rules on the use by firms of the keyfacts logo.

01/12/2004

Purpose

GEN 5.1.2

The FSA logo is a registered UK service mark, with number 2150560. The keyfacts logo is a registered Community trade mark, with the number E3866688. Both are the property of the FSA. They are also subject to copyright and may be used or reproduced with permission of the FSA only. If the FSA or keyfacts logos are reproduced or otherwise used by any person without such permission the FSA may seek to enforce its rights over its property through the Courts.

06/11/2006

GEN 5.1.3

GEN 5 Annex 1 G is a general licence, which sets out the circumstances in which the FSA permits firms and their appointed representatives to reproduce the FSA and keyfacts logos. A firm or an appointed representative need not apply for an individual licence if it uses or reproduces the logos in accordance with the general licence.

06/11/2006

GEN 5.1.4

The FSA has no policy to allow use of the logos by a firm or appointed representative other than as set out in GEN 5 Annex 1 G. If, however, a firm or appointed representative wishes to use or reproduce either of the logos other than in accordance with the general licence, it may apply to the FSA for an individual licence, giving full reasons why it considers the FSA should grant the licence.

06/11/2006

The keyfacts logo

GEN 5.1.5

A firm must not use the keyfacts logo other than as and when it is required or permitted to be used by the rules, and in accordance with the general licence in GEN 5 Annex 1 G.

06/11/2006

GEN 5.1.6

A firm must take all reasonable steps to ensure that its representatives do not use the keyfacts logo other than as and when the logo is required to be used by the rules.

01/12/2004

GEN 5.1.7

A firm must take all reasonable steps to ensure that the keyfacts logo is not reproduced on any document that the firm, or any person acting on its behalf, provides to a customer unless the reproduction is required by the rules.

01/12/2004

GEN 5 Annex 1

Licence for use of the FSA and keyfacts logos by authorised firms and appointed representatives

06/11/2006

GEN 6

Insurance against financial penalties

GEN 6.1

Insurance against financial penalties

01/12/2004

Application

GEN 6.1.1

This chapter applies to every firm, but only with respect to business that can be regulated under section 138 of the Act (General rule-making power).

01/01/2004

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.

01/01/2004

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.

01/01/2004

Interpretation

GEN 6.1.4

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

01/01/2004

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

01/01/2004

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.

01/01/2004

GEN 6.1.7

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 FSA enforcement action or any costs they may be ordered to pay to the FSA.

01/01/2004

Transitional Provisions and Schedules

GEN TP 1

Transitional provisions

GEN TP 1.1

Table: (1) Transitional Provisions applying across the Handbook

(1)

The purpose of these transitional provisions is to assist a smooth transition at commencement. They comprise various technical provisions that will apply across the whole Handbook 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 Handbook relating to the matter. For example, COB contains transitional provisions relating to various matters which are limited in duration and which override these transitional provisions in relation to those matters.

(4)

Definitions for these transitional provisions, additional to those in the Glossary, are provided at paragraph 17 of the table.

GEN TP 1.2

(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 rule in the Handbook, unless the context otherwise requires and subject to any more specific transitional provision relating to the matter

Acts under pre-commencement provisions
Anything done, or having effect as done, under or for the purposes of any pre-commencement provision has effect as if done under or for the purposes of any substantially similar provision in the Handbook.

From commencement of the relevant rule in the Handbook

See schedule of Transitional provisions of the relevant rule

Paragraph 1

For example, a firm may rely on action to establish the best price, taken shortly before commencement for the purposes of an applicable SRO best execution rule, for the purposes of compliance with COB 7.5.5 R (1) (Providing best execution), even if the transaction is executed after commencement.

As paragraph 1

Achieving compliance before commencement.
Anything done before commencement for the purposes of a provision in the Handbook has effect as if done under that provision.

As paragraph 1

Paragraph 3

For example, a firm may allocate responsibility for apportionment and oversight for the purposes of SYSC 2.1.3 R (Apportionment of responsibilities) before commencement, so as to be in compliance at commencement.

As paragraph 1

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

As paragraph 1

Paragraph 5

For example, a firm which executes an aggregated order shortly before commencement must comply with COB 7.7.9 R (Requirement for fair allocation) if the allocation occurs after commencement.

As paragraph 1

Deemed references to pre-commencement provisions
Any reference (express or implied) in a provision in the Handbook 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 commencement, a reference to any substantially similar pre-commencement provision applicable to the firm.

As paragraph 1

Paragraph 7

For example, SUP 11.6.4 R requires certain firms to notify the FSA 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 commencement, even if previously notified under a pre-commencement provision rather than under SUP 11.4.2 R (and SUP 11.6.4 R is to be read as referring to that pre-commencement provision).
Another example is SUP 3.10.6R, which requires an auditor's report on client assets to be provided not more than 53 weeks after the period covered by the previous report on such matters. For the first report after commencement, the period runs from that covered by the report under any substantially similar pre-commencement provision (because of an implied reference to that provision).

As paragraph 1

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

As paragraph 1

Paragraph 9

For example, a UK bank was required to submit Form LE2 within 10 business days after its quarter end by the FSA's Guide to Banking Supervisory Policy. If the quarter end fell five days before commencement, the UK bank must still submit the report within 10 business days, but in accordance with SUP 16.7.8 R (Financial reports: banks).

As paragraph 1

Every rule in the Handbook 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 will not contravene a rule in the Handbook requiring a record to be made or retained to the extent that the firm:
(1) made a record of the matter before mortgage lender in accordance with the rule or with a substantially similar pre-commencement provision applicable to the firm; and
(2) retains that record as if the rule was in force when the record was made.

From commencement of the relevant rule in the Handbook

See schedule of Transitional provisions of the relevant rule

Paragraph 11

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

As paragraph 11

A firm must retain a record in accordance with a rule in the Handbook requiring a record of that sort to be retained, if the firm was required to make and retain that record before commencement under a substantially similar pre-commencement provision applicable to the firm.

As paragraph 11

Paragraph 13

This transitional provision makes specific provision, in relation to records, for the matters covered by paragraphs 7 and 9. It is included for clarity and overrides those general transitional provisions.

As paragraph 11

Every notification rule in the Handbook (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 or actuary appointed under SUP 4 (Actuaries)) will not contravene a notification rule in the Handbook to the extent that notice of the relevant matter was given to the firm's previous regulator before commencement in accordance with:
(1) the notification rule; or
(2) a substantially similar pre-commencement provision applicable to the firm.

From commencement of the relevant rule in the Handbook

See schedule of Transitional provisions of the relevant rule

Paragraph 15

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.

As paragraph 15

Paragraphs 1 to 16

Definitions
In these transitional provisions:
(1) "pre-commencement provision" means a provision repealed or revoked by or under the Act or a rule or guidance of the firm's previous regulator, including (where the context permits) any relevant provision which it replaced before commencement;

As paragraph 1

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

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

Paragraphs 19 to 22

Application for provisions which are not rules
The purpose of paragraphs 19 to 22 is to ensure that the transitional provisions in paragraphs 1 to 10 apply throughout the Handbook.

As paragraphs 19 to 22

Statements of Principle 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 approved person as if the rules in those paragraphs were part of the Statements of Principle.

From commencement of the relevant Statement of Principle

See schedule of Transitional provisions for APER

Code of Practice for Approved Persons and Code of Market Conduct 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 approved person and every person to whom the Code of Market Conduct applies as if the rules in those paragraphs were part of the Code of Practice for Approved Persons and the Code of Market Conduct respectively.

From commencement of the relevant provision of the Code

See schedule of Transitional provisions for APER and MAR

Directions and requirements in the Handbook (that is, provisions with the status letter "D" 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 a direction or requirement in the Handbook applies as if the rules in those paragraphs were part of that direction or requirement.

From commencement of the relevant direction or requirement

See schedule of Transitional provisions of the relevant direction or requirement

Guidance (and other provisions with the status letter "G" in the margin or heading) in the Handbook unless the context otherwise requires and subject to any more specific transitional provision relating to the matter

The provisions in paragraphs 1 to 10 are also relevant to every person to whom any other guidance (or other provision with the status letter "G" in the margin or heading) in the Handbook is relevant as if the rules in those paragraphs were part of that guidance (or other provision).

From commencement of the relevant provision

See schedule of Transitional provisions of the relevant provision

Every rule in the Handbook made by the FSA

Expired

Paragraph 23 and guidance in the Handbook other than in:•COND; •APER; •FIT; •PROF ;•MAR 1

Expired

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

FEES 3.2

FEES 3.2 applies to any application received after 1 October 2004 but not determined until after 1 February 2005.

From 1 February 2005

1 February 2005

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

06/10/2007

GEN Sch 1

Record keeping requirements

01/12/2004

GEN Sch 1.1

There are no record keeping requirements in GEN.

01/12/2004

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.

01/12/2004

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

01/12/2004

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.

01/01/2006

GEN Sch 4

Powers exercised

01/12/2004

GEN Sch 4.1

The following powers and related provisions in or under the Act have been exercised by the FSA to make the rules in GEN:

Section 59 (Approval for particular arrangements)

Section 118(8) (Market abuse)

Section 136(2) (Funding of the legal assistance scheme)

Section 138 (General rule-making power)

Section 139 (Miscellaneous ancillary matters)

Section 140 (Restrictions on managers of authorised unit trust schemes)

Section 141 (Insurance business rules)

Section 142(2) (Insurance business: regulations supplementing Authority's rules)

Section 143 (Endorsement of codes etc)

Section 144 (Price stabilising rules)

Section 145 (Financial promotion rules)

Section 146 (Money laundering rules)

Section 147 (Control of information rules)

Section 149 (Evidential provisions)

Section 150(2) (Actions for damages)

Section 156 (General supplementary powers)

Section 213 (The compensation scheme)

Section 214 (General)

Section 215 (Rights of the scheme in relevant person's insolvency)

Section 216 (Continuity of long-term insurance policies)

Section 217 (Insurers in financial difficulties)

Section 218(2)(b) (Annual report)

Section 223(1) (Management expenses)

Section 226 (Compulsory jurisdiction)

Section 229 (Awards)

Section 234 (Industry funding)

Section 238(5) (Restrictions on promotion)

Section 239 (Single property schemes)

Section 247 (Trust scheme rules)

Section 248 (Scheme particulars rules)

Section 278 (Rules as to scheme particulars)

Section 283(1) (Facilities and information in the United Kingdom)

Section 293 (Notification requirements)

Section 295(3) (Notification: overseas investment exchanges and overseas clearing houses)

Section 322 (Rules applicable to former underwriting members)

Section 332(1) (Rules in relation to persons to whom the general prohibition does not apply)

Section 340 (Appointment)

Paragraph 17 of Schedule 1 (The Financial Services Authority: Fees)

Paragraph 19 of Schedule 3 (EEA Passport Rights: Establishment)

Paragraph 20 of Schedule 3 (EEA Passport Rights: Services)

Paragraph 7(3) of Schedule 17 (The Ombudsman Scheme: Annual reports)

Paragraph 13 of Schedule 17 (Authority's procedural rules)

Regulation 6(1) of the OEIC Regulations (FSA rules)

Article 15 of The Financial Services and Markets Act 2000 (Transitional Provisions) (Ombudsman Scheme and Complaints Scheme) Order 2001 (SI 2001/2326)

The following articles of the Financial Services and Markets Act 2000 (Transitional Provisions, Repeals and Savings) (Financial Services Compensation Scheme) Order 2001 (SI 2001/2967):

articles 4(3) and 4(4) (Pending applications);

article 6(2) (Post-commencement applications);

articles 9(3) and 9(4) (Article 9 defaults occurring before commencement);

article 10(2) (Applications in respect of compulsory liability insurance);

article 12(3) (Applications under the new scheme);

article 23 (Record keeping and reporting requirements relating to pre-commencement acts).

article 15 of the Financial Services and Markets Act 2000 (Variation of Threshold Conditions) Order 2001 (SI 2001/2507)

The following powers and related provisions in the Act have been exercised by the FSA to issue the parts of the codes in GEN:

Section 64(2) (Conduct: statements and codes)

Section 119 (The Code)

Section 120 (Provisions included in the Authority's code by reference to the City Code).

The following powers in the Act have been exercised by the FSA to issue the parts of the statements in GEN:

Section 64 (1) (Conduct: statements and codes)

Section 69 (Statement of policy)including as applied by paragraph 1 of Schedule 5 to the Payment Services Regulations,

Section 124 (Statement of policy)

Section 169(9) (Investigations etc in support of overseas regulator), including as applied by paragraph 3 of Schedule 5 to the Payment Services Regulations

Section 210 (Statements of policy), including as applied by regulation 86(6) of the Payment Services Regulations

Section 395(5) (The Authority's procedures), including as applied by paragraph 7 of Schedule 5 to the Payment Services Regulations.

The following powers and related provisions in or under the Act have been exercised by the FSA in GEN to direct, require or specify:

Section 51 (Applications under this Part)

Section 60 (Applications for approval)

Section 148(3) (Modification or waiver of rules)

Section 182 (Notification)

Section 242 (Applications for authorisation of unit trust schemes)

Section 250(4) and (5) (Modification or waiver of rules)

Section 270(6)(b) (Schemes authorised in designated countries or territories)

Section 274 (Application for recognition of individual schemes)

Section 287 (Application by an investment exchange)

Section 288 (Application by a clearing house)

Section 294(2) (Modification or waiver of rules)

Section 316 (Direction by Authority)

Section 317 (The core provisions)

Section 318 (Exercise of powers through Council)

Regulation 7(3) and (4) of the OEIC Regulations (Modification or waiver of FSA rules)

Regulation 12 of the OEIC Regulations (Authorisation).

article 9D of the Regulated Activities Order (Applications for certificates)

article 9F of the Regulated Activities Order (Revocation of the certificate on request)

The following power in the Act has been exercised by the FSA to make the part of the complaints scheme in GEN:

Paragraph 7 of Schedule 1 (Arrangements for the investigation of complaints).

The following power in the Act has been exercised by the FSA to give the other guidance in GEN: The following powers have been exercised by the FSA to give the other guidance in GEN:

Section 157(1) (Guidance).

GEN 2.1.8 R is made by FOS Ltd in the exercise of its powers referred to in Schedule 4 to DISP

In this Schedule, references to GEN include the Glossary.

The following articles of the Financial Services and Markets Act 2000 (Transitional Provisions, Repeals and Savings) (Financial Services Compensation Scheme) Order 2001 (SI 2001/2967):

articles 4(3) and 4(4) (Pending applications);

article 6(2) (Post-commencement applications);

articles 9(3) and 9(4) (Article 9 defaults occuring before commencement);

article 10(2) (Applications in respect of compulsory liability insurance);

article 12(3) (Applications under the new scheme);

article 23 (Record keeping and reporting requirements relating to pre-commencement acts).

article 15 of the Financial Services and Markets Act 2000 (Variation of Threshold Conditions) Order 2001 (SI 2001/2507)

The following articles of the Regulated Activities Order:

article 9G(1) (Obtaining information form certified persons)

article 9H(1) (Rules prohibiting the issue of electronic money at a discount)

Regulation 3 of the Electronic Commerce Directive (Financial Services and Markets) Regulations 2002 (SI 2002/1775).

Regulation 2 of the Financial Services and Markets Act 2000 (Fourth Motor Insurance Directive) Regulations 2002 (SI 2002/2706).

The following powers and related provisions in the Act have been exercised by the FSA to issue the parts of the codes in GEN:

Section 64(2) (Conduct: statements and codes)

Section 119 (The Code)

Section 120 (Provisions included in the Authority's code by reference to the City Code).

The following powers in the Act have been exercised by the FSA to issue the parts of the statements in GEN:

Section 64 (1) (Conduct: statements and codes)

Section 69 (Statement of policy)

Section 124 (Statement of policy)

Section 169(9) (Investigations etc in support of overseas regulator)

Section 210 (Statements of policy)

Section 395(5) (The Authority's procedures).

The following powers and related provisions in or under the Act have been exercised by the FSA in GEN specify:

Section 51 (Applications under this Part)

Section 60 (Applications for approval)

Section 148(3) (Modification or waiver of rules)

Section 182 (Notification)

Section 242 (Applications for authorisation of unit trust schemes)

Section 250(4) and (5) (Modification or waiver of rules)

Section 270(6)(b) (Schemes authorised in designated countries or territories)

Section 274 (Application for recognition of individual schemes)

Section 287 (Application by an investment exchange)

Section 288 (Application by a clearing house)

Section 294(2) (Modification or waiver of rules)

Section 316 (Direction by Authority)

Section 317 (The core provisions)

Section 318 (Exercise of powers through Council)

Regulation 7(3) and (4) of the OEIC Regulations (Modification or waiver of FSA rules)

Regulation 12 of the OEIC Regulations (Authorisation).

article 9D of the Regulated Activities Order (Applications for certificates)

article 9F of the Regulated Activities Order (Revocation of the certificate on request)

The following power in the Act FSA to make the part of the complaints scheme in GEN:

Paragraph 7 of Schedule 1 (Arrangements for the investigation of complaints).

The following power in the Act has been exercised by the FSA to give the other guidance in GEN:

Section 157(1) (Guidance).

GEN 2.1.8 R is made by FOS Ltd in the exercise of its powers referred to in Schedule 4 to DISP.

In this Schedule, references to GEN include the Glossary.

19/01/2003

GEN Sch 5

Rights of action for damages

01/12/2004

GEN Sch 5.1

The table below sets out the rules in GEN contravention of which by an authorised person may be actionable under section 150 of the Act (Actions for damages) by a person who suffers loss as a result of the contravention.

01/12/2004

GEN Sch 5.2

If a 'Yes' appears in the column headed 'For private person?', the rule may be actionable by a 'private person' under section 150 (or, in certain circumstances, his fiduciary or representative; see article 6(2) and (3)(c) of the Financial Services and Markets Act 2000 (Rights of Action) Regulations 2001 (SI 2001/2256)). A 'Yes' in the column headed 'Removed' indicates that the FSA has removed the right of action under section 150(2) of the Act. If so, a reference to the rule in which it is removed is also given.

01/12/2004

GEN Sch 5.3

The column headed 'For other person?' indicates whether the rule may be actionable by a person other than a private person (or his fiduciary or representative) under article 6(2) and (3) of those Regulations. If so, an indication of the type of person by whom the rule may be actionable is given.

01/12/2004

GEN Sch 5.4

Chapter/Appendix

Section/Annex

Paragraph

Right of action under section 150

For private person?

Removed

For other person?

All rules in GEN with the status letter "E"

GEN 2.1.8 R

All other rules in GEN

Yes

01/12/2004

GEN Sch 6

Rules that can be waived

01/12/2004

GEN Sch 6.1

GEN 1.2.2 R (Referring to approval by the FSA) and the rules in GEN 4 (Statutory status disclosure) can be waived by the FSA under section 148 of the Act (Modification or waiver of rules).

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

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

01/12/2004