Regulatory notifications

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1 Regulatry ntificatins August 2017 As a regulated firm we are expected t be pen and c perative in yur dealings with the regulatr which expects t be ntified within certain designated timescales f certain events. This requirement is included explicitly in Statement f Principle 11 fr Businesses. It is imprtant t nte that knwingly r recklessly giving the FCA infrmatin which is false r misleading may be a criminal ffence under the Financial Services and Markets Act This guidance utlines a summary f the main events requiring ntificatin t the FCA. It des nt cver every ptential ntificatin need. Further details f ntificatin requirements can be fund in the FCA Handbk under the SUP Surcebk. Yu can als cntact Rb Abbtt fr assistance. Hw t ntify Any ntificatins shuld be made in writing and in English. Depending n the issue being ntified yu shuld submit yur ntificatin as fllws: 1. Using any specified frm required by the relevant rules e.g. in relatin t clse links 2. The FCA's Cnnect system allws yu t submit r update applicatins r ntificatins relating t: Standing data abut the firm (this shuld be dne each year) Apprved persns Variatins f permissins Cancellatins f permissins Appinted representatives Passprts e.g. IMD, MiFID r MCD passprts Applicatins fr Part 4A permissins e.g. new firm applicatins Cnnect can be accessed at: FCA Cnnect System. 3. Where there is n specified frm r the ntificatin cannt be made using Cnnect yu shuld then use the FCA ntificatins frm which is available at: FCA Ntificatin Frm. The cmpleted frm shuld then be sent t the FCA at the relevant address as fllws: Main Cntact Details The Financial Cnduct Authrity 25 The Nrth Clnnade Canary Wharf Lndn E14 5HS Ntificatins requiring reasnable advance ntice Alternative The Financial Cnduct Authrity Quayside Huse 127 Funtainbridge Edinburgh EH3 9DQ The fllwing are examples f events where yu wuld be expected t ntify the FCA in advance: FCA Regulatry Ntificatins August 2017 Page 1

2 Change in any business r trading name Change in legal status (NB this is likely t require reauthrisatin frm the FCA) Change t firm s registered ffice address Change in regulated activities Change f accunting reference date (NB if this is extended, yu must ntify the FCA befre the previus reference date. If it is shrtened, yu must ntify the FCA befre the new reference date) Certain changes in cntrllers (NB: includes increasing and reducing level f cntrl) Ntificatins requiring immediate ntice The fllwing are examples f events where yu wuld be expected t ntify the FCA as sn as yu becme aware: Any matter with a serius regulatry impact, e.g. failing t satisfy ne r mre f the threshld cnditins, r a matter which culd have a significant adverse impact n yur firm s reputatin Breaches f the rules and ther requirements in r under the Act, e.g. a significant breach f a rule r Statement f Principle Civil, criminal r disciplinary prceedings against yur firm Suspicin that an emplyee may be guilty f serius miscnduct cncerning their hnesty r integrity and which is cnnected with yur firm s regulated activities The presentatin f a petitin fr the winding up f yur firm r an appintment f a receiver t the firm Any changes in Clse Links Yu are aware that yur auditr (if required) will qualify their reprt, r yu have received written cmmunicatin frm yur auditr cmmenting n yur firm s internal cntrls Any matter affecting the cntinuing relevance r apprpriateness f waivers granted t yur firm Yu are aware that yur Prfessinal Indemnity Insurance des nt meet the defined terms, r yur insurance is cancelled r refused The appintment r terminatin f an appinted representative (NB: n later than 10 business days) Ntificatins apprved persns Ntificatins requirements specifically relating t the appintment and remval f apprved persns include: Applicatins t perfrm a cntrlled functin under the apprved persns regime Ntice f ceasing t perfrm a Cntrlled Functin within 7 days nte that where yu are aware that an apprved persn is likely t cease a cntrlled functin e.g. due t suspensin, dismissal r similar, yu shuld ntify the FCA as sn as yu becme aware, with the relevant Frm C t fllw Ntificatin f changes in persnal infrmatin r applicatin details within 7 days Internal transfer f an apprved persn Ntificatins reprting suspicius transactins (market abuse) Where yur firm is invlved in arranging certain types f financial instruments yu are required t reprt any suspicius transactins t the FCA withut delay. A suspicius transactin is ne where there are reasnable grunds t suspect it may cnstitute market abuse e.g. insider dealing r market manipulatin. Amngst the specified financial instruments cvered by these requirements are: Transferable securities e.g. shares, securities equivalent t shares, bnds and ther securitised debt FCA Regulatry Ntificatins August 2017 Page 2

3 Units in cllective investment schemes Mney market instruments Financial futures cntracts, including cash settled instruments Cmmdity derivatives Interest rate, currency and equity swaps Any ther instrument admitted t trading n a regulated market in a Member State The financial instruments likely t be mst relevant t yur firm are shares and units in cllective investment schemes. Examples f suspicius transactins The fllwing examples are prvided by the FCA in SUP as indicatins f whether a transactin is suspicius. Pssible Signals f Insider Dealing 1. A client pens an accunt and immediately gives an rder t cnduct a significant transactin r, in the case f a whlesale client, an unexpectedly large r unusual rder, in a particular security especially if the client is insistent that the rder is carried ut very urgently r must be cnducted befre a particular time specified by the client. 2. A transactin is significantly ut f line with the client's previus investment behaviur (e.g. type f security; amunt invested; size f rder; time security held). 3. A client specifically requests immediate executin f an rder regardless f the price at which the rder wuld be executed (assuming mre than a mere placing f 'at market' rder by the client). 4. There is unusual trading in the shares f a cmpany befre the annuncement f price sensitive infrmatin relating t the cmpany. 5. An emplyee's wn accunt transactin is timed just befre clients' transactins and related rders in the same financial instrument. Pssible signals f Market Manipulatin 1. An rder will, because f its size in relatin t the market in that security, clearly have a significant impact n the supply f r demand fr r the price r value f the security, especially an rder f this kind t be executed near t a reference pint during the trading day e.g. near the clse. 2. A transactin appears t be seeking t mdify the valuatin f a psitin while nt decreasing/increasing the size f that psitin. 3. A transactin appears t be seeking t bypass the trading safeguards f the market e.g. as regards vlume limits; bid/ffer spread parameters; etc. Reprting suspicius transactins If yu wish t reprt a suspicius transactin yu shuld use the specified frm available n the FCA website: FCA Suspicus Transactin Reprting Frm. The cmpleted frm shuld then be frward t the Market Cnduct Team at: market.abuse@fca.rg.uk Address: Market Cnduct Team, 25 The Clnnade, Canary Wharf, Lndn, E14 5HS FCA Regulatry Ntificatins August 2017 Page 3

4 Ntificatins MCD and cnsumer buy t let firms Where the firm is a mrtgage intermediary (i.e. a MCD firm) and/r a cnsumer buy t let (CBTL) firm and yu wish t ntify the FCA f changes e.g. t the type f mrtgage business it carries ut (such as first r secnd charge mrtgages) r, in the case f a nn authrised CBTL firm, ther data relating t the firm, yu will need t submit relevant ntificatins. The FCA's Cnnect system shuld be used fr these ntificatins. MCD and CBLT ntificatins (authrised firms) NB: this applies if yur firm is FCA authrised and is als, r intends t be, registered as a CBTL firm. If yu intend t change the types f mrtgages that yur firm will be arranging r advising n i.e. adding r remving first r secnd charge mrtgage business and/r CBTL, yu need t ntify the FCA. Frm: FCA MCD and CBTL ntificatin frm prvides details f the infrmatin yu will need t prvide. CBTL firm ntificatins (nn authrised firms) NB: this applies if yur firm is nt authrised by the FCA and it is, r intends t be registered as a CBTL firm. If yur firm is registered as a CBTL firm with the FCA, yu need t ntify them f any changes relating t yur firm e.g. in relatin t standing data, cntrllers r f the CBTL activities undertaken. Frm: FCA CBTL ntificatin frm prvides details f the infrmatin yu will need t prvide. CBTL de registratin NB: this applies t any firms wishing t de register their CBTL registratin. Yu need t ntify the FCA if yu wish t de register yur firm's CBTL registratin. Frm: FCA CBTL de registratin frm prvides details f the infrmatin yu will need t prvide. GABRIEL (Gathering Better Regulatry Infrmatin Electrnically) GABRIEL is the FCA s nline regulatry reprting system which it uses t cllect and validate regulatry data n yur firm. GABRIEL currently cmprises the fllwing reprting systems: 1. RMAR (Retail Mediatin Activities Return) 2. Cmplaints 3. CMAR (Client Mney and Assets Return) nly relevant t firms hlding client mney and/r assets in relatin t investment business 4. MLAR (Mrtgage Lenders and Administratrs Return) nly relevant t lenders and administratrs f regulated mrtgages 5. PSD (Prduct Sales Data) nly relevant t prviders f retail investments, regulated mrtgages and pure prtectin cntracts GABRIEL can be accessed at FCA Gabriel System. FCA Regulatry Ntificatins August 2017 Page 4

5 The returns required and their frequency f submissin is determined by yur firm s regulated activity grups (RAGs) i.e. yur firm s regulatry permissins. Fr example, sme returns will be six mnthly with thers being quarterly. It is therefre imprtant that yu ensure that yur firm s permissins cntinue t be apprpriate t the activities it is invlved in. GABRIEL has a schedule which prvides details f all returns required fr yur firm and their due dates. The schedule is updated each time a return is submitted. Reprting Article 3 exempt and nn MiFID firms This guidance fcuses n the specific reprting requirements fr Article 3 exempt / nn MiFID firms. An Article 3 MiFID exempt firm is generally a persnal investment firm which: 1. Des nt have permissin t passprt their investment services int anther EU member state 2. In relatin t unregulated cllective investment schemes, nly transmit rders t firms allwed under MiFID 3. Des nt undertake discretinary prtfli management i.e. des nt manage investments 4. Des nt hld client mney/assets fr investment business Where yur firm is an Article 3 MiFID exempt firm yur regulatry returns will invlve the submissin f relevant sectins f the RMAR. These are effectively individual returns which capture data in relevant areas required by the FCA. Reprting requirements Article 3 exempt firms When applying this guidance t yur firm it is imprtant that yu refer t its permissins and regulated activity grups (RAGs). In the table belw we see permissins and RAGs fr a typical client which is an Article 3 exempt firm. In this case the firm will fall within RAGs 3, 7, 8 and 9. NB RAG 12 may apply if the firm is undertaking credit related activities. Regulatry Permissins RAG Advising n investments (except P2P agreements) (except n pensin transfers and pt uts) 3 Arranging (bringing abut deals) in retail investments Advising n pensin transfers and pt uts Making arrangements with a view t transactins in investments Hme finance and insurance mediatin activities Credit related activities FCA Regulatry Ntificatins August 2017 Page 5

6 The table belw sets ut the requisite reprting requirements based n the abve typical regulatry permissins. As highlighted earlier, where yur firm falls int several RAGs, the reprting requirements acrss all RAGs will apply. Where data items are duplicated, yu shuld fllw the reprting requirements fr the lwest RAG in this example RAG 3. Yu then need t check the reprting requirements fr the ther RAGs (7, 8 and 9 in this example) t make sure that n additinal data items are required. Yur firm s required returns shuld appear in yur firm s GABRIEL schedule and these will be based n yur firm s RAGs. Yu shuld nt therefre have t g thrugh the abve prcess althugh it is imprtant that yu are aware f hw returns are determined and that yu peridically check that the crrect returns are appearing n the schedule. Data items / returns required RMA A: Balance sheet RMA B: Prfit and lss accunt RMA D: Regulatry capital RMA C: Client mney and assets RMA E: Prfessinal indemnity insurance RMA F: Threshld cnditins Reprting frequency & due date fr reprting perid Six mnthly within 30 business days if annual regulated business revenue is 5m r belw is abve 5m Six mnthly within 30 business days if annual regulated business revenue is 5m r belw is abve 5m Six mnthly within 30 business days if annual regulated business revenue is 5m r belw is abve 5m Six mnthly within 30 business days if annual regulated business revenue is 5m r belw is abve 5m Six mnthly within 30 business days if annual regulated business revenue is 5m r belw is abve 5m Six mnthly within 30 business days RMA G: Training and cmpetence Six mnthly within 30 business days RMA H: COBS data RMA I: Supplementary prduct sales data RMA J: Data fr calculating fees RMA K: Adviser charging Cmplaints return Δ Cmplaints by retail investment adviser Δ Six mnthly within 30 business days Six mnthly within 30 business days Annually within 30 business days Annually within 30 business days Six mnthly within 30 business days Six mnthly within 30 business days FCA Regulatry Ntificatins August 2017 Page 6

7 REP001: Clse links reprt* Δ REP002: Cntrllers reprt* Δ REP CRIM: Financial crime reprt** Δ CCR002: Cnsumer credit data: vlumes Δ CCR003: Cnsumer credit data: lenders Δ Annually within fur mnths f firm s financial year end Annually within fur mnths f firm s financial year end Annually within 60 business days f firm's financial year end Annually within 30 business days if annual revenue frm credit related activities is 5m r belw Six mnthly within 30 business days if annual revenue frm credit related activities is abve 5m Annually within 30 business days if annual revenue frm credit related activities is 5m r belw Six mnthly within 30 business days if annual revenue frm credit related activities is abve 5m *These reprts are nt usually required fr firms with basic regulatry permissins. Where yur firm has regulatry permissins which trigger these reprts, they will appear in yur GABRIEL reprting schedule. **This reprt nly applies t firms with annual revenue f ver 5 millin (includes all regulated and unregulated incme as at the firm's last accunting reference date. FCA Regulatry Ntificatins August 2017 Page 7