Brexit: Proposed changes to the Handbook and Binding Technical Standards – second consultation — FCA — GB

Consultation Paper
CP18/36*
November 2018
Brexit: Proposed changes to the
Handbook and Binding Technical Standards – second consultation

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CP18/36 Financial Conduct Authority
Brexit: Proposed changes to the Handbook and Binding Technical Standards – second consultation We are asking for comments on this Consultation Paper (CP) by 21 December 2018. You can send them to us using the form on our website at: www.fca. org.uk/cp18-36-response-form Or in writing to:
Handbook Review Team
Financial Conduct Authority
12 Endeavour Square
London E20 1JN
Telephone:
+44 207 066 1000
Email:
cp18-36@fca.org.uk
How to respond Contents
1 Summary 3
2 How we will resolve cross-cutting issues 8 3 Changes to the Handbook 13 4 Changes related to the Temporary Permissions Regime (TPR) 30 5 Binding Technical Standards 37 6 Forms 46 7 Credit rating agencies (CRAs) and trade repositories (TRs) 47 8 Non-Handbook guidance 48
Annex 1
Questions in this paper 49
Annex 2
Cost benefit analysis related to the
Temporary Permissions Regime 52
Annex 3
List of Statutory Instruments and policy notes 61
Annex 4
List of relevant Binding Technical Standards 63
Annex 5
Compatibility Statement 69
Annex 6
Abbreviations in this document 73
Appendix 1
Draft Guidance – our approach to non‑Handbook guidance where it relates to EU‑law or EU‑derived law
Appendix 2
Draft Guidance – our approach to Forms
Appendix 3
Draft Handbook Text
Appendix 4
Draft Binding Technical Standards Instruments returns you to the contents list takes you to helpful abbreviations How to navigate this document onscreen

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CP18/36
Chapter 1
Financial Conduct Authority
Brexit: Proposed changes to the Handbook and Binding Technical Standards – second consultation 1 Summary
1.1 On 10 October 2018, we published CP18/28, our first consultation paper (CP) on
proposed changes to our Handbook and to Binding Technical Standards (BTS) to take account of Brexit.1
1.2 The October CP explained that we were consulting on changes to our Handbook
because it implements and refers to European Union (EU) legislation, and to UK legislation which relates to or refers to the EU. We must also amend certain BTS to ensure they operate appropriately when the UK has left the EU. The paper set out the first set of amendments proposed.
1.3 It also explained our proposed approach to non-legislative material produced by
the European Supervisory Authorities (ESAs) or their predecessors, such as ESA Guidelines and Recommendations. This included us setting out draft non-Handbook guidance on our approach to such material.
1.4 Since then, the Government has continued to publish information regarding
its approach to financial services legislation for Brexit, including draft Statutory Instruments (SIs) and policy notes. As a result, we are now able to consult on further Handbook and BTS amendments, related to those SIs and policy notes2 . A list of those can be found in Annexes 3 and 4.
1.5 Our first CP set out the baseline approach for reviewing our Handbook and the BTS.
The Treasury stated3 it will work on the basis that, if there is no withdrawal agreement, the UK cannot rely on any new specific arrangements being in place between the UK and the EU. The Treasury therefore would, in general, treat the EU and its member states in the same way as it treats non-EU or third countries after exit day (the baseline approach).
1.6 However, the Treasury also made clear that there are instances where it will diverge
from this approach where it is necessary. This is to ensure that there is a functioning regime in place on exit day to enable firms and regulators to be ready for exit, to protect the existing rights of UK consumers or to ensure financial stability. To ensure consistency across the wider legislative framework we are taking the same approach. Where relevant, this baseline approach also applies to the EEA and its members.
1.7 As with our first CP, departures from the baseline approach approach have been
considered where:

we judge it is needed to ensure a sound, functional regulatory regime on exit day
we wish to avoid significant disruption to firms, investors and/or consumers
1.8 Where we propose to depart from the baseline approach, we have set out our reasons.
We also ask for feedback on whether there are cases where we should consider 1 www.fca.org.uk/publications/consultation-papers/cp18-28-brexit-proposed-changes-handbook-bts-first-consultation 2 some of these SI’s and policy notes may be published shortly after publication of this CP 3 https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/720298/HM_Treasury_s_ approach_to_financial_services_legislation_under_the_European_Union__Withdrawal__Act.pdf

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CP18/36
Chapter 1
Financial Conduct Authority
Brexit: Proposed changes to the Handbook and Binding Technical Standards – second consultation departing from the baseline approach, either on the basis set out above, or for other reasons.
1.9 A Statutory Instrument (SI) made under the European Union (Withdrawal) Act 2018
(EUWA) is now in force4 giving us, the Prudential Regulation Authority (PRA), the Bank of England and the Payment Systems Regulator (PSR) responsibility for amending EU-derived provisions in our Handbook and existing EU Binding Technical Standards (BTS) which will be incorporated into UK law by the EUWA, so that they function effectively after exit day.
1.10 In general, we intend to use powers under this legislation to make our proposed
amendments to the Handbook and BTS amendments. All changes proposed under the delegated power will be subject to approval by the Treasury before the relevant instruments are made by our Board.
1.11 There are some exceptions within the content of this CP where we do not intend to use
the power in the SI:

The amendments proposed by the Financial Ombudsman Service that are included
in our Handbook (within chapters 2, 3 and 4 of the Dispute Resolution: Complaints sourcebook, (DISP) and chapter 5 of the Fees manual). Here, the Financial Ombudsman Service will use its powers under the Financial Services and Markets Act 2000 (FSMA) . This is because the Financial Ombudsman Service has not been delegated the powers mentioned in paragraph 1.9. Paragraphs 4.26 to 4.30 set out the Financial Ombudsman Service’s amendments in more detail.
The proposed provisions associated with our Temporary Permissions Regime (TPR),
set out in Chapter 4. These build on the proposals set out in the dedicated TPR CP that we published on 10 October 2018. We intend to use our powers under FSMA to make these proposed provisions.
The proposed provisions relating to the Senior Managers & Certification Regime
(SM&CR) and the Approved Persons Regime (APR) in the draft instrument dealing with the SM&CR.
In amending our Handbook guidance and issuing non-Handbook guidance, we are
using our general power in section 139A FSMA (power of the FCA to give guidance).
In making the Credit Rating Agencies (Guidance) Instrument 2018, the powers of
direction, guidance and related provisions in or under the provisions of the Credit Rating Agencies (Amendments etc.) (EU Exit) Regulations 2018 are relevant. Implementation challenges
1.12 In our first CP,5
we dealt with the implementation challenges if the UK leaves the EU without an agreement. We also explained that the Treasury had confirmed it would bring forward legislation to allow regulators to phase in changes to firms’ regulatory requirements. As with our first CP, we are keen to get feedback on whether compliance with these changes to regulatory requirements at exit day would be a challenge for firms. 4 www.legislation.gov.uk/uksi/2018/1115/pdfs/uksi_20181115_en.pdf 5 Paragraphs 2.24 to 2.29

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CP18/36
Chapter 1
Financial Conduct Authority
Brexit: Proposed changes to the Handbook and Binding Technical Standards – second consultation Q1: Do you think any of the changes in this CP we propose to make, or in relevant SIs, represent a significant risk to compliance for you in time for exit day? If yes, please specify which and explain why this is the case, including projected time needed to comply with requirements were they to come into effect on exit day. What we cover in this CP
1.13 This CP is structured as follows:

Chapter 2 discusses a range of cross-cutting issues which span our Handbook and
BTS and our proposed approach to these. This includes further issues identified since publication of the first CP.
Chapter 3 explains the Handbook proposals covered in this CP (except those
related to the introduction of the TPR and the new credit rating and trade repository regimes). This includes an explanation of the more significant changes we are proposing. An overview of the contents of Chapter 3 can be found in table 1 below.
Table 1
Overview of Chapter 3 content
Section Summary
3.1 Introduction An overview of all sourcebooks/chapters included
in this CP
3.2 High-level standards Proposals relating to the SM&CR.
3.3 Prudential standards Proposals relating to contractual recognition of
bail-in.
3.4 Business standards Proposals relating to motor vehicle liability insurers,
compensation disclosures, appropriateness (MIFID business), product information and insurance linked securities.
3.5 Regulatory processes Proposals relating to the tied agent regime
3.6 Primary markets Proposals relating to the Primary markets sector:
free float, transparency and corporate governance requirements
3.7 Other sourcebooks Proposals relating to emissions auctions
3.8 Update to proposals in
our first consultation
Proposals covered in our first CP that have subsequently been updated. This is due to changes to our Handbook compared to the version consulted on in this CP, where that has given rise to either a new deficiency or have impacted our proposed approach to addressing a deficiency.
Chapter 4 sets out certain proposals about the TPR which were previously
described but not consulted on in CP18/29
Chapter 5 outlines the changes we propose to make to BTS. An explanation of our
approach to BTS was included in the first consultation

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CP18/36
Chapter 1
Financial Conduct Authority
Brexit: Proposed changes to the Handbook and Binding Technical Standards – second consultation

Chapter 6 summarises our approach to forms and the guidance we propose to issue
on this
Chapter 7 outlines changes because we will take on regulating credit rating agencies
and trade repositories
Chapter 8 summarises our proposed approach to non-Handbook guidance issued
by us and the guidance we propose to issue on this.
Who this applies to
1.14 As with our first consultation, we expect this CP to affect all our stakeholders. Table
2 in paragraph 3.5 includes a list of stakeholder groups who might have interest in specific sections of this CP.
1.15 In addition, we expect our proposals in Chapter 4 on the TPR to be particularly relevant
to:
EEA firms that are passporting into the UK under FSMA and Treaty firms
EEA electronic money and payment institutions and registered account information
service providers passporting into the UK (to the extent described in paragraph 4.5)
1.16 Finally, we expect our proposals in Chapter 8 to be of interest to credit rating agencies
and trade repositories.
The relevant version of the Handbook and future consultations
1.17 The version of the Handbook we used for our first CP was that in effect on 1 July 2018.
For this CP, we have taken into account:
provisions in effect on 1 October 2018,6
and
provisions in the SM&CR regime for dual regulated insurers, due to come into effect
on 10 December 20187
1.18 The exceptions to this are:
proposed provisions for temporary permission firms
content relating to core Handbook provisions under the SM&CR.8
For this content, we also include those provisions for solo-regulated firms, due to come into effect in December 20199 6 The 1 October version of the Handbook can be found here:
www.handbook.fca.org.uk/handbook?date=01-10-2018&timeline=True 7 www.fca.org.uk/publication/policy/ps18-15.pdf 8 APER, FIT, COCON, SUP 10A/C, SYSC 4.4 onwards, SYSC 5.2, SYSC 22- 27. 9 www.fca.org.uk/publication/policy/ps18-14.pdf

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CP18/36
Chapter 1
Financial Conduct Authority
Brexit: Proposed changes to the Handbook and Binding Technical Standards – second consultation

proposed rules for FEES 6 and COMP for the TPR, which use the Handbook as on 1 April

This is because significant changes have already been made to those parts of the
Handbook that come into effect on that day
1.19 In some cases, the amendments in this CP and our first CP may themselves need to be
updated before the UK leaves the EU. This may arise where:

we based our proposals on draft SIs and these are subsequently amended during the
legislative process
our proposals reflect the content of policy notes produced by the Government about SIs
that have yet to be published, and the draft SI that is eventually published differs in some respect
SIs or policy notes are published too late in the process for us to factor them into the
changes we propose in our CPs
amendments unrelated to Brexit are made to our Handbook, existing BTS are amended
at EU level, or new BTS come into force at EU level that will be incorporated in UK law by the EUWA, and these themselves need to be amended to ensure they function correctly after 29 March 2019 Continuity provisions
1.20 To help ensure a smooth transition, we propose to introduce general continuity provisions
for all parts of the Handbook and BTS not covered by a specific transitional arrangement. The draft instrument containing the general continuity provisions is at Appendix 3.
1.21 The proposed approach provides that references in our Handbook and BTS are generally
to be read in a way that preserves the continuity of regulatory requirements which straddle exit day in some way. For example, where a firm breaches a requirement pre-exit and only discovers this post-exit, it would be required to notify us of this pre-exit breach of the substantially similar pre-exit regulatory requirement. Q2: Do you agree with our proposals to introduce general continuity provisions? If not, why? Next steps
1.22 We want to know what you think of our proposals. Please send us your comments by
21 December 2018. Use the online response form10 on our website or write to us at the address on page 2.
1.23 We will consider feedback before finalising the Handbook, BTS amendments, the guidance
on our non-Handbook guidance and on our forms proposed in this CP. We intend to give feedback on this CP and publish our near final instruments in early 2019. 10 www.fca.org.uk/cp18-36-response-form.

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CP18/36
Chapter 2
Financial Conduct Authority
Brexit: Proposed changes to the Handbook and Binding Technical Standards – second consultation 2 How we will resolve cross-cutting issues Introduction
2.1 In our first CP, we explained how a no-deal Brexit11 would give rise to a range of issues,
each of which would affect multiple parts of the Handbook and BTS. We also explained what impact they have and how they arise. We termed these ‘cross-cutting issues’.
2.2 We have identified further cross-cutting issues, and explain these in detail in this
chapter. In summary, they relate to:

The Distance Marketing Directive
The E-Commerce Directive
References to the official language of the member state or to information being
submitted in languages other than English The Distance Marketing Directive (DMD) Affected Handbook sourcebooks COBS, ICBOS, MCOB, BCOBS, CONC
2.3 The DMD protects consumers who enter into both regulated and unregulated financial
services contracts at a distance (such as by post, over the phone or online). The DMD covers virtually all retail financial services. However, its requirements are relatively limited and cover only pre-contract information and withdrawal (cancellation) rights during a defined ‘cooling off’ period.
2.4 The DMD is transposed in the UK partly through our Handbook and partly through
the Distance Marketing Regulations 2004. The requirements of the DMD apply on a country of origin basis. This means that it is for the home member state of the supplier in a distance contract to implement and enforce the requirements of the DMD.
2.5 Our DMD-related Handbook provisions therefore apply to firms marketing from an
establishment in the UK to consumers in the UK or in other EEA states. Our rules do not apply to marketing into the UK from an establishment in another EEA state. Our rules on distance marketing also do not generally apply to distance marketing activity with or for a consumer in a non-EEA state.
2.6 We have not identified a reason, with respect to distance marketing, to depart from
our baseline approach of treating EEA states the same as any other third country. 11 i.e. where no long-term relationship is agreed between the UK and the EU, and the planned implementation period from 29 March 2019 to 31 December 2020 does not come into effect.

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CP18/36
Chapter 2
Financial Conduct Authority
Brexit: Proposed changes to the Handbook and Binding Technical Standards – second consultation That means that after exit day, our DMD-related Handbook provisions will generally no longer apply to UK firms’ distance marketing activity with respect to consumers in EEA states.
2.7 The end of passporting arrangements means that where UK firms conduct crossborder business into the EEA they may need to be authorised in the relevant Member
State, and local law requirements implementing the DMD may apply. Our consultations on the Temporary Permission Regime (TPR) set out our proposed approach to applying our Handbook to EEA passporting firms who enter TPR.12 The E-Commerce Directive (ECD) Affected Handbook sourcebooks COBS, ICOBS, MCOB, BCOBS, CONC
2.8 The ECD sets consumer protection standards for cross-border electronic commerce
activities (ECA). It also requires EEA states to regulate the outward provision of such activities from their territories, and exempts incoming providers from nearly all host state regulation. The ECD can be used for cross-border ECA in all financial services sectors (except with respect to Solvency II insurers), including those that do not have a passporting regime. Consequently, EEA ECA firms can currently sell online-only regulated financial services to UK consumers without having to be regulated by us.
2.9 As part of its changes for Brexit, the Government intends to revoke legislation, or parts
thereof, relating to the cross-border provision of financial services via the exemption from host state regulation in the ECD. This includes:

The Electronic Commerce Directive (Financial Services and Markets) Regulations
2002
Article 72A of the Regulated Activities Order, regarding information society services
Article 20B of the Financial Promotions Order, regarding the financial promotion
restriction not applying to an incoming (i.e. cross-border) electronic commerce communication
2.10 We propose to make consequential amendments to our Handbook to reflect that.
However, our e-commerce rules will apply to EEA based firms which enter the TPR.13 The consequential amendments will not affect the provisions in the Handbook regarding e-commerce activity entirely within the UK, for example, the consumer protection provisions in COBS 5.2. 12 See www.fca.org.uk/publication/consultation/cp18-29.pdf and Chapter 4 of this CP. 13 See for example GEN 2.2.26R in Appendix 1 to CP18/29.

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CP18/36
Chapter 2
Financial Conduct Authority
Brexit: Proposed changes to the Handbook and Binding Technical Standards – second consultation References to the official language of the member state or to information being submitted in languages other than English Affected Handbook sourcebooks and Binding Technical Standards COBS, ICOBS, ELTIF BTS Instrument
2.11 Our Handbook contains a number of provisions regarding the language in which
communications can or must be made.
2.12 For example, rules within COBS 6 specify that information must be provided ‘in the
official language or languages of the EEA state’.
2.13 While the precise references to use of language vary according to the rule in question,
we consider it appropriate to make a cross-cutting amendment for Brexit, such that the requirements refer to the official language or one of the official languages of the United Kingdom.14 Cross-cutting issues discussed in our first consultation
2.14 In addition to the cross-cutting issues discussed above, we highlight below the
sections of our Handbook and the BTS addressed in this CP that are affected by the cross-cutting issues discussed in our first CP. A summary of each cross-cutting issue is set out. However, please refer to chapter 3 of the first CP for a more detailed explanation of these cross-cutting issues. The position of EU law and how it relates to our Handbook and BTS Affected Handbook sourcebooks and Binding Technical Standards BCOBS, CASS, CONC, CREDS, DEPP, EG, GEN, ICOBS, IPRU-FSOC, IPRU-INV, MCOB, RCB, SUP, SYSC, UNFCOG, all BTS included in this consultation
2.15 When the UK leaves the EU, directly-applicable EU Regulations will no longer apply.
This will leave a legislative gap. To address this, the EUWA converts existing directly applicable EU law at the point of exit into UK law and gives the Government powers to amend that law so it functions effectively when the UK leaves the EU. We will amend the Handbook to reflect these changes. This means, for example, that provisions in the Handbook which reproduce directly applicable regulations will be updated to reflect amendments proposed by SIs under the EUWA. 14 Under the Welsh Language (Wales) Measure 2011, the Welsh language has the status of an official language in Wales.

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CP18/36
Chapter 2
Financial Conduct Authority
Brexit: Proposed changes to the Handbook and Binding Technical Standards – second consultation The loss of passporting rights Affected Handbook sourcebooks CASS, COBS, CONC, DEPP, EG, FEES, ICOBS, IPRU-INS, MCOB, PROD, SUP
2.16 As we leave the EU’s single market, passporting rights from the EEA into the UK will
cease to exist. FSMA is being amended so that EEA firms, Treaty firms, operators and depositaries of Undertakings for Collective Investment in Transferable Securities (UCITS) and Alternative Investment Fund Managers (AIFM) qualifiers will no longer qualify as authorised persons. Reflecting these changes in the Handbook mainly involves removing the provisions related to passporting.
2.17 As part of that, we propose in this CP to amend our approach to fees. Currently,
entities operating in the UK under a passport may benefit from a discounted fee to reflect that our regulation of them is limited to that of ‘host’ regulator. As passporting will no longer be possible, and the concepts of ‘home’ and ‘host’ regulator will cease accordingly, discounting of fees will also cease. Our proposed approach to applying fees to firms who enter the TP regime is set out in CP18/29. References to EU institutions Affected Handbook sourcebooks and Binding Technical Standards COBS, IFPRU, SUP For example, BMR, MAR, PAD and EMIR BTS Instruments
2.18 As the UK will no longer be a member of the EU, European institutions such as the
European Securities and Markets Authority (ESMA) and the European Commission will not have powers or obligations under UK law. In most instances, the Government will replace a named EU institution with a UK equivalent. References to ‘other member/EEA states’ and ‘other competent authorities’ Affected Handbook sourcebooks BCOBS, CASS, COBS, CONC, DEPP, EG, IFPRU, IPRU-INV, INSPRU, MCOB, PROD, SUP
2.19 As the UK is currently a member state of the EU/EEA, there are references in our
Handbook and BTS to ‘other member/EEA states’, or variants thereof. If we need to keep these references in some form, we propose to amend them to ‘EU member states’ or ‘EEA member states’, as appropriate. References to information sharing with European Supervisory Authorities or ‘other competent authorities’ Affected Binding Technical Standards

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CP18/36
Chapter 2
Financial Conduct Authority
Brexit: Proposed changes to the Handbook and Binding Technical Standards – second consultation For example, MAR, EMIR BTS Instruments
2.20 Within the European regulatory framework, we are obliged to share information or data
with the European Supervisory Authorities (ESAs) in many situations. After exit day, this obligation will fall away. While we may continue to share information, and seek to cooperate with the ESAs, we will no longer be required to do so. We therefore propose to remove the references to compulsory sharing of information with the ESAs. Q3: Do you agree that we have correctly identified all relevant amendments in our draft Handbook and BTS text related to the cross-cutting issues set out above? Do you have any other points you wish to raise regarding our approach to these cross-cutting issues?

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CP18/36
Chapter 3
Financial Conduct Authority
Brexit: Proposed changes to the Handbook and Binding Technical Standards – second consultation 3 Changes to the Handbook
Section 3.1 Introduction
3.1 This chapter gives an overview of the Handbook sourcebooks and chapters that
are covered in this CP. They are summarised in the table below, alongside potential interested stakeholders by sourcebook.
3.2 Annex 3 provides a list of the draft SIs and policy notes published so far that are
relevant to the material covered in this CP.
3.3 Most changes we propose are cross-cutting in nature or consequential upon the
Treasury’s approach to drafting its SIs. An overview of where these types of changes can be found is in Table 2 below, with detailed amendments in the draft instruments.
3.4 We also include dedicated sections, with explanations of proposals, where there are
different approaches we could have adopted to correcting a deficiency. We have done this where we deviate from the baseline approach explained in paragraph 1.6 or we consider that an explanation is particularly helpful to make clear the amendments that have been made.
3.5 Appendix 3 contains the draft instruments setting out our proposed amendments
to various sourcebooks and the Glossary. We are consulting on the Glossary on a cumulative basis, so stakeholders can see the totality of changes proposed to it in both this and our first CP. Amendments to terms in the Glossary may impact on proposals set out in our first CP, and stakeholders should also consider the instruments set out in our first CP. Stakeholders should read this appendix to gain a full understanding of all the changes proposed.
Table 2
Overview of sourcebooks included in this CP Sourcebook Specific chapters Interested stakeholders Statements of Principle and Code of Practice for Approved Persons (APER) All All authorised persons and firms, consumers Banking – Conduct of Business (BCOBS) All Firms that offer savings and current accounts, consumers General guidance on Benchmark Submission and Administration (BENCH) All Firms that provide or administer benchmarks Client Assets (CASS) All Authorised persons and firms holding client assets Conduct of Business sourcebook (COBS) All Investment firms and other firms undertaking designated investment business and long-term insurance business in relation to life policies, consumers Code of Conduct (COCON) All All authorised persons and firms, consumers

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CP18/36
Chapter 3
Financial Conduct Authority
Brexit: Proposed changes to the Handbook and Binding Technical Standards – second consultation Sourcebook Specific chapters Interested stakeholders Compensation (COMP) All All authorised persons and firms, consumers Collective Investment Schemes sourcebook (COLL) 1, 4 Managers and depositaries of UK-authorised collective investment schemes and/or EEA UCITS schemes Threshold Conditions (COND) All All authorised persons and firms, consumers Consumer Credit (CONC) All Firms that offer credit-related activities, consumers Credit Unions (CREDS) All Credit unions, consumers Decision Procedure and Penalties Manual (DEPP) 1, 2, 7,
Schedule 3
All authorised persons and firms, consumers Dispute Resolution:
Complaints (DISP)
All All authorised persons and firms, consumers Disclosure Guidance and Transparency Rules (DTR) 1A, 1B, 1C, 4-8, TP1 and schedules Issuers and stakeholders involved in the buying, selling and trading of financial instruments, primary information providers The Enforcement Guide (EG) 1–4, 6–11, 13, 14, 19, 20,
Appendix 3
All authorised persons and firms, consumers Fees Manual (FEES) 1-4, 6, 7, 7A, 8-11, 13, App 1-3 All authorised persons and firms, consumers The Fit and Proper test for Approved Persons and specified significant-harm functions (FIT) All All authorised persons and firms, consumers Investment Funds sourcebook (FUND) 1, 4 Managers and depositaries of alternative investment funds General Provisions (GEN) 1, 2, 4, 5, 7, TP3 Firms, Lloyds, managing agents, members agents General Prudential (GENPRU) 3 and Schedules Investment firms (and groups containing such entities) Prudential sourcebook for Investment Firms (IFPRU) 11 Investment firms (and groups containing such entities) Interim Prudential sourcebook for Investment Businesses (IPRU-INV) 14 Investment firms (and groups containing such entities) Insurance: Conduct of Business (ICOBS) All Firms undertaking non-investment general insurance and protection business and distribution, consumers Listing Rules (LR) All Issuers with listed securities or seeking a listing of their securities, their advisors, and other stakeholders involved in the buying, selling and trading of financial instruments Market Conduct (MAR) 1, 2, 4, 8, TP1.1, TP1.2 Regulated markets, Operators of MTFs, Operators of OTFs, Systematic Internalisers, Algorithmic Traders, Data Reporting Service Providers (DRSPs), stakeholders involved in the buying, selling and trading of financial instruments, persons trading in commodity derivatives

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CP18/36
Chapter 3
Financial Conduct Authority
Brexit: Proposed changes to the Handbook and Binding Technical Standards – second consultation Sourcebook Specific chapters Interested stakeholders Mortgages and Home Finance: Conduct of Business (MCOB) All Firms undertaking home finance activities, consumers Prudential sourcebook for Mortgage and Home Finance Firms, and Insurance Intermediaries (MIPRU) 1, 2, 3, 5 Mortgage and home finance firms, insurance intermediaries (and groups containing such entities), insurers Principles for Businesses (PRIN) All All authorised persons and firms, consumers Prospectus Rules (PR) All Issuers and stakeholders involved in the buying, selling and trading of financial instruments Product Intervention and Product Governance (PROD) All All authorised persons and firms, consumers Professional Firms (PROF) All Lawyers, actuaries and accountants who undertake regulated activities Recognised Investment Exchanges (REC) All Recognised investment exchanges and clearing houses Supervision (SUP) 1A, 2, 7, 9, 10A, 10C, 11, 12, 13, 13A, 14, 15, 15A, 15B, 16, 17A, 18 and APP2, Schedules 1, 4, 5, 6, TP 5-9 All authorised persons and firms, consumers Senior Management Arrangements, Systems and Controls (SYSC) 2, 3, 4.4, 5.2, 10, 10A, 12, 19F.2, 22, 23, 24, 25, 26, 27, 28, TP5, 7 All authorised persons, employees, consumers Training and Competence (TC) All All authorised persons and firms, consumers The Unfair Contract Terms and Consumer Notices Regulatory Guide (UNFCOG) All All authorised persons and firms, consumers
Section 3.2 High Level standards
3.6 A range of sourcebooks related to our high-level standards are covered by this CP.
In particular, the SYSC sourcebook, which sets out rules and guidance for a firm’s arrangements, systems and controls, and the SM&CR and APR regime, discussed below. There is one exception where we have proposed changes to SYSC which extend beyond consequential ones. This relates to how the SM&CR should apply within the TPR and is discussed in Chapter 4 (and in CP18/29).15 15 www.fca.org.uk/publications/consultation-papers/cp18-29-temporary-permissions-regime-inbound-firms-and-funds

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CP18/36
Chapter 3
Financial Conduct Authority
Brexit: Proposed changes to the Handbook and Binding Technical Standards – second consultation The Senior Managers & Certification Regime (SM&CR) and Approved Persons Regime (APR)
3.7 In line with the general approach, in the long-term EEA branches will be treated as third
country branches, with no exceptions. This section explains how the SM&CR and, for solo-regulated branches the APR and then SM&CR, will apply to firms that do not have (or no longer have) a temporary permission.
3.8 The SM&CR currently applies to all branches of non-UK firms that have permission to
accept deposits or deal in investments as principal (where that activity is regulated by the Prudential Regulation Authority (PRA)) in the UK. The SM&CR will be extended so that it applies from 10 December 2018 to all insurers, including branches of non-UK firms, and all other firms authorised under FSMA and regulated by us (‘solo-regulated firms’) from 9 December 2019.
3.9 The SM&CR does not currently apply to EEA pure reinsurers. That exclusion does not
apply to third country branches and so will not apply to EEA firms outside the TPR.
3.10 As explained in paragraphs 4.94 and 4.98 of CP 18/29, the APR will continue to apply
to solo-regulated firms until the SM&CR for solo-regulated firms takes effect on 9 December 2019. This means that:

the third country branch SM&CR will apply to non-TPR dual-regulated branches from
exit day
the third country branch APR will apply to non-TPR solo-regulated branches
between exit day and 9 December 2019
from 9 December 2019, the third country branch SM&CR will apply to non-TPR soloregulated branches
3.11 Firms should refer to SUP 10C of our Handbook for the relevant rules for dualregulated third country branches. Firms looking for more information on the third
country regimes for solo-regulated firms should refer to SUP10A for APR, or PS18/14 and our Guide to the SM&CR for solo-regulated firms.
3.12 Chapter 4 explains our approach to APR and SM&CR in the TPR.

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CP18/36
Chapter 3
Financial Conduct Authority
Brexit: Proposed changes to the Handbook and Binding Technical Standards – second consultation SM&CR Senior Manager Functions (SMFs) and APR Controlled Functions
3.13 The following tables illustrate the differences in the SMFs applicable to branches in the
SM&CR and APR, and other elements of the SM&CR:
Table 3
SM&CR for dual-regulated branches
Dual-regulated
EEA branch
(continues in the
TPR)
Dual-regulated third-country branch
Senior management functions
SMF21 – EEA branch senior manager √
SMF17 – Money laundering reporting officer (MLRO) √ √ SMF16 – Compliance oversight √ SMF3 – Executive director √ SMF15 – Chair of the With Profits Committee √ SMF22 – Other local responsibility function √ Prescribed responsibilities √ Other requirements Local responsibility √ Responsibilities maps √ √ Handover procedures (banking firms only) √
Table 4
APR and SM&CR Functions, and other elements of the SM&CR for solo-regulated branches16 Solo-regulated EEA branch in TPR Solo-regulated third-country branch Controlled Functions SMF21 (APR CF29 – Significant Management function) – EEA Branch Senior Manager √ √ (APR only) SMF17 (APR CF11) – MLRO √ √ SMF16 (APR CF10) – Compliance Oversight √ SMF3 (APR CF1) – Executive Director √ SMF27 (APR CF4) – Partner √ SMF19 (APR CF3 – CEO) – Head of Third Country Branch √ APR CF2 – Non-Executive Director function (does not apply under SM&CR) √ APR CF28 – Systems and Controls function (does not apply under SM&CR) √ APR CF 30 customer function (does not apply under SMCR) √ √ Prescribed Responsibilities √ 16 APR refers to the existing regime which will be replaced by the SM&CR on 9 December 2019.

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Section 3.3 Prudential standards
Contractual recognition of bail-in
3.14 Under IFPRU 11.6.3R, where firms have relevant liabilities governed by the law of a third
country, it is a requirement that they include a clause in their contracts to the effect that such liabilities may be liable to bail-in.
3.15 Upon exit day, all contracts for relevant liabilities governed by the law of an EEA
member state will become subject to the provisions on third country contractual recognition of bail-in. This means that firms will need to include a new term in the relevant contracts for liabilities such that the creditor agrees to the fact that the liability may be written down or converted by the Bank of England. This would apply to any new contracts and to any existing contracts that are materially amended after exit day. We have amended IFPRU 11.6.3R accordingly.
Section 3.4 Business standards
Motor vehicle liability insurers
3.16 We have identified two issues in ICOBS which relate to the rules in ICOBS 8.2 for claims
representatives and claims handling.
3.17 These rules are connected to a wider suite of obligations on insurers and bodies such
as the Motor Insurance Bureau (MIB) and the Motor Insurers’ Information Centre (MIIC). These requirements derive from the Consolidated Motor Insurance Directive (CMID), the majority of which is implemented in the UK through legislation and is the responsibility of the Department for Transport (DfT). Claims representatives
3.18 Under our current rules, insurers providing motor insurance must appoint a claims
representative in every EEA state. These claims representatives must be authorised by the insurer to deal with claims made by injured parties, and must comply with other detailed requirements (such as being able to deal with claims in the local language).
3.19 The purpose of the claims representative requirements is to ensure that claims for
compensation by people who suffer a loss caused by the insured driver are dealt with quickly, easily and in a location convenient for the injured party (including in their native language). For example:

a French resident on holiday in the UK, who is hit and injured by a UK motorist insured
by a UK insurer, can return to France and submit their claim against the UK insurer to their French claims representative
a UK insurer underwrites policies in another EEA state and policyholders can submit
claims to their local claims representative
3.20 UK residents currently benefit from the reciprocity of EEA-based insurers being
required to appoint claims representatives in the UK. For example, if a UK resident is injured by an EEA-insured vehicle they can pursue their claim with the EEA firm’s UK claims representative.

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3.21 The requirement for claims representatives only applies for EEA states. There are no
similar requirements for third countries.
3.22 Currently, motor insurers must provide certain information to the MIIC. This includes
the details of their claims representatives in each EEA member state.
3.23 The options we considered are:
a. continue to require UK insurers to appoint claims representatives in other EEA states, or b. remove the requirement
3.24 Having considered both options, we consider option (b) to be appropriate. This will
mean that EEA states are treated in the same way as other third countries. We also expect that EEA insurers will no longer need to maintain claims representatives in the UK after Brexit. To keep this requirement on UK firms could create an imbalance of obligations.
3.25 The rules we propose to delete are only those which relate to claims representatives
appointed in EEA states. ICOBS 8.2 also requires firms that are not based in the UK but which provide motor insurance in the UK, to appoint claims representatives in the UK. We do not propose to delete these rules. Requirements on claims handling
3.26 Our rules impose maximum timescales for insurers to respond to claims made by
injured parties. The rules derive from the CMID. In summary, the rules require the insurer to respond within three months, either:

admitting liability and making a reasoned offer of compensation, or
disputing liability and giving a reasoned response to the points at issue in the claim
3.27 If the insurer does not meet the time limit, they become liable for interest on any
compensation which the injured party ultimately receives. These provisions offer protection to injured parties by reducing the likelihood of insurers taking a long time to settle claims.
3.28 The rules currently apply to residents of all EEA states, through the definition of the
term ‘injured party’. The options we considered are to:
retain the current scope of the rules
scale them back so they only apply to claims from injured parties in the UK
3.29 On balance, we propose to retain these rules for the benefit of both UK and EEA
injured parties. UK motor insurance includes compulsory minimum cover for use of the vehicle in the EEA. We consider that there is value in retaining the claims handling rules as this will ensure that claims made against compulsory motor insurance are handled consistently regardless of whether the injured party is a UK or EEA resident.

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3.30 COBS 6 sets out obligations on firms to disclose information about UK and EEA
compensation schemes. These provisions implement disclosure requirements in the MiFID Regulations and the Investor Compensation Scheme Directive (ICSD).
3.31 COBS 6.1ZA.5EU and COBS 6.1.7R currently require firms that hold client money or
investments to disclose information about compensation schemes available in respect of UK and EEA activities. COBS 6.1ZA.5EU copies out Article 47 of Commission Delegated Regulation 2017/565/EU (MiFID Org Regulation) which Treasury propose to amend17so that MiFID firms must disclose compensation information for UK activities only.18 This creates a potential inconsistency with the equivalent provision for nonMiFID firms at COBS 6.1.7R and other compensation disclosure rules in COBS 619 which reflect the ICSD.
3.32 To address this issue, we have considered the following options:
a. amend COBS 6.1.7R, 6.1.16R and 6.1ZA.22R to maintain the current status quo so that these continue to require firms to disclose compensation information about UK and EEA compensation schemes b. amend COBS 6.1.7R, 6.1.16R and 6.1ZA.22R so that these are consistent with the MiFID onshoring changes and therefore require firms carrying out non-MiFID business to disclose information about UK compensation schemes only i.e. the Financial Services Compensation Scheme (FSCS), and
c. amend COBS 6.1.7R, 6.1.16R and 6.1ZA.22R to require firms carrying out non-MiFID
business to disclose information relating to any compensation scheme of which they are a member (i.e. including non-EEA compensation schemes).
3.33 We consider option (b) to be the most appropriate. It would ensure that non-MiFID
firms are not subject to greater disclosure obligations than MiFID firms. It would also be consistent with the baseline approach for onshoring EU legislation to treat the EU in the same way as other third countries. Finally, it is not clear that EEA schemes will provide cover for a UK authorised firm’s UK activities after exit.
3.34 COBS 4.4.1R currently requires a firm to ensure that any reference in advertising
to an investor compensation scheme established under the ICSD is limited to a factual reference to the scheme. We propose amending this provision so it applies to worldwide compensation schemes (rather than just the FSCS). This would ensure that firms’ advertising will continue to be limited to factual references to EEA compensation schemes, but in a way that treats the EEA compensation schemes the same way as those in third countries. This approach is consistent with the baseline approach. Q5: Do you agree with our proposed changes to COBS 4 and COBS 6 in respect of compensation disclosures? 17 See Regulation 46(4) in the proposed Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018. 18 See CP 18/28: Brexit: proposed changes to the Handbook and Binding Technical Standards – first consultation:
www.fca.org.uk/publications/consultation-papers/cp18-28-brexit-proposed-changes-handbook-bts-first-consultation 19 COBS 6.1.16R and 6.1ZA.22R.

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3.35 COBS 4.7 and COBS 4.12 contain restrictions on the promotion of non-readily
realisable securities (NRRS) and non-mainstream pooled investments (NMPI). Both NRRS and NMPI are defined in our Handbook Glossary by reference to various types of investment. The definition of NRRS broadly captures equity and debt securities for which there is no, limited or difficult access to a secondary market and which may be difficult to price. The definition of NMPI captures units in unregulated collective investment schemes and other products which pose similar risks to such schemes.
3.36 In certain respects, the definitions of NRRS and NMPI currently differentiate between
investments and products with a connection to the EEA and those with no such connection. For example, securities admitted to official listing on an EEA exchange would not be considered as NRRS but securities listed on an exchange outside the EEA could be.
3.37 We are proposing to depart from our baseline approach20 and retain the existing
scope of these COBS restrictions (by maintaining the current scope of the definitions of NRRS and NMPI) in the interests of avoiding significant disruption for firms and investors following exit day. Our proposed approach would maintain the level of consumer protection which is currently afforded by these restrictions.
3.38 For similar reasons, we also propose to maintain the current scope of the definition of
‘packaged product’ which is primarily of relevance to the application of certain of the disclosure rules in COBs. Q6: Do you agree with our proposal to maintain the current scope of the Glossary definitions of ‘non-readily realisable security’, ‘non-mainstream pooled investment’ and ‘packaged product’ and thereby maintain the application of the rules in COBS to which they relate? Appropriateness (MiFID business)
3.39 A firm carrying out MiFID business (other than investment advice or portfolio
management) must assess whether a particular service or product is appropriate for a client.
3.40 COBS 10A.4.1R specifies that an appropriateness assessment need not be carried out
if certain conditions are met. One such condition is that the service relates to certain types of ‘non-complex’ financial instruments. This provision gives rise to two issues (as set out below) in the context of Brexit, which relate to the definitions of ‘regulated market’ and ‘UCITS’. Regulated market definition
3.41 The list of ‘non-complex’ financial instruments is set out in COBS 10A.4.1R (2) includes
shares and bonds or other forms of securitised debt admitted to trading on:
i. a regulated market; or
ii. an equivalent third country market; or
iii. an MTF.
20 See paragraph 1.5 in this CP

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3.42 The Handbook Glossary terms used in COBS 10A.4.1R (2) are derived from EU
legislation. As a consequence of the UK’s withdrawal from the EU there will no longer be a harmonised aspect to these terms.
3.43 For the purposes of COBS 10A.4.1R (2)(a) and (b), the Handbook definition of regulated
market currently encompasses both UK and other EEA markets since it refers to systems authorised and functioning regularly in accordance with Title III of MiFID. In CP18/28 we proposed that the definition of regulated market in the Handbook will be confined to UK recognised investment exchanges.
3.44 Therefore, if we do not make a further amendment to COBS 10A.4.1R, shares and
bonds admitted to trading on EEA regulated markets will no longer be treated as financial instruments in relation to which an appropriateness assessment need not be undertaken if the other conditions in COBS 10A.4.1R are satisfied.
3.45 To maintain continuity of the application of this rule, we are proposing to keep the
current scope and consider shares and bonds admitted to trading on UK and EEA regulated markets as essentially non-complex.
3.46 This will ensure that we adopt the same approach to appropriateness assessments
after we have left the EU in relation to financial instruments that satisfy the conditions in COBS10A.4.1R. This consistency will mitigate the risk of any market disruption that might potentially occur if we changed our existing approach.
3.47 In addition, removing these financial instruments from the list in COBS 10A.4.1R (2)
could potentially lead to a reduction in their availability to investors in the UK. Firms would be able to continue to offer these instruments to clients in the EEA without necessarily having to undertake an appropriateness assessment.
3.48 Our proposed approach will mean that we are treating shares and bonds admitted to
trading on EEA regulated markets differently to those on other third country markets. The ability to provide execution services in relation to those financial instruments without undertaking an appropriateness assessment will continue to be subject to the existence of an equivalence decision in respect of the relevant third country markets.
3.49 However, we consider these financial instruments, and the risks associated with them,
to be such that maintaining the current approach would mitigate market disruption while maintaining an appropriate degree of investor protection. Q7: Do you agree with our proposal to amend COBS 10A.4.1R(2)(a) and (b) to include reference to shares and bonds admitted to trading on EEA regulated markets? If not, why? UCITS definition
3.50 We have proposed that the Handbook definition of ‘UCITS’ post exit point will
incorporate both UK and EEA UCITS schemes. This amendment has been proposed in the context of the FCA’s consideration of its broader approach to the treatment of EEA UCITS schemes post-exit point.
3.51 We propose following the approach of providing consistency of treatment for UK and
EEA UCITS and maintain the status quo by continuing to regard UK and EEA UCITS as

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3.52 This will mean we are treating EEA UCITS differently to any other third country fund.
However, the volume of EEA UCITS impacted would be significant if we were to change the scope to UK UCITS only. Maintaining the status quo would avoid disruption and ensure continuity of application as well as ensure consistency with our treatment of EEA UCITS more broadly. Q8: Do you agree with our proposal that we should rely on the new Handbook Glossary term for UCITS post exit and continue to treat UK and EEA UCITS as financial instruments in relation to which an appropriateness assessment is not necessarily required? If not, why? Product information
3.53 COBS 13 and 14 contain rules on the preparation of product information and the
provision of that information to clients. As part of that, these chapters include rules and guidance relating to the provision of the key investor information document (KIID) under the UCITS Directive.
3.54 At present, manufacturers of UCITS funds are exempt from the product information
obligations under the PRIIPs Regulation. This is on the basis that these manufacturers are obliged to prepare a KIID under the UCITS Directive. A similar exemption applies to manufacturers of non-UCITS retail schemes (NURS) offered to retail investors where they are subject to similar rules as those that apply in relation to UCITS funds.
3.55 In its onshoring legislation, the Treasury is maintaining this exemption post-exit for
both UK and EEA UCITS as well as NURS. We have proposed changes to COBS 13 and 14 to reflect this position. Insurance-linked securities
3.56 COBS 18.6A was introduced in December 2017 as part of the creation of a regime for
the issuing of insurance-linked securities (ILS) by Insurance Special Purpose Vehicles (ISPVs). The rules clarify the definition of the term ‘client’ for firms carrying on activities in relation to ISPVs, and (where the client is not an eligible counterparty) require disclosure that compensation will not be available from the FSCS if the ISPC cannot meet its liabilities.
3.57 To come within COBS 18.6A, an ISPV must assume risks from a regulated insurance
entity which is authorised under Solvency II. As Solvency II firms are exempted from MiFID II, the MiFID II rules will not apply to these ISPVs.
3.58 If the ISPV accepts risks ceded from other insurers, such as those established outside
the EU, then they may not be able to rely on the exemptions in MiFID II for Solvency II firms. This could mean that they would be subject to the rules derived from MiFID II, which are potentially more onerous.
3.59 However, the exemption for Solvency II firms is not the only exemption in MiFID II that
may be relevant to ISPVs. When considering an application for authorisation by an ISPV, we will look at whether the firm can rely on any of the MiFID II exemptions. If they can, then the rules in COBS 18.6A will apply for the firm’s activities. If the firm cannot rely on any exemptions then the MiFID II rules will apply instead.

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3.60 The options we have considered for addressing this issue are:

scaling back the scope of COBS 18.6A so it is only available to ISPVs assuming risks
from UK insurers
continuing to apply COBS 18.6A to risks assumed from EEA insurers
3.61 Following the baseline approach of treating EEA states as we would any other third
country would mean we would adopt the first option. However, if we were to change the rules so that COBS 18.6A only applied to risks assumed from UK insurers, we would by necessity exclude risks assumed from EEA insurers.
3.62 We do not consider this a sensible outcome as it would:
frustrate the intention of the ILS regime by creating an unlevel playing field for
businesses involving risks ceded from UK and EEA insurers.
significantly reduce the scope and attractiveness of the ILS regime to firms
potentially cause some market disruption as firms which assumed risks from nonUK EEA insurers, or planned to do so, would need to revise their strategies.
3.63 We therefore propose to continue allowing ISPVs that assume risks from EEA insurers
to be in scope of COBS 18.6A. If, in the future, the UK and EEA regimes diverge, we could reconsider the approach at that point. Q9: Do you agree we should continue to allow ISPVs assuming risks from EEA insurers to do so under COBS 18.6A?
Section 3.5 Regulatory processes
Tied agent regime
3.64 When we implemented MiFID in 2007, the UK elected to operate the MiFID tied agent
regime alongside the existing, and broadly similar, appointed representative regime. An appointed representative carrying out MiFID business in the UK is also a tied agent. Under MiFID, a firm may also use tied agents when it exercises its right to passport into other EEA States.
3.65 After exit, the UK’s regulatory regime will continue to recognise the distinct, but
overlapping, concepts of appointed representatives and tied agents. However, because passporting rights will cease after Brexit, it will no longer be possible for UK firms to exercise such rights to use tied agents to provide services in other EEA States. Likewise, EEA MiFID investment firms will no longer be able to exercise such rights to use tied agents to provide services in the UK.
3.66 However, we understand that the Treasury intends to retain section 39A of FSMA
to apply MiFID’s tied agent regime to UK investment firms who appoint tied agents established in the UK but which do not carry on business in the UK. We anticipate that this retention will have very limited practical implications for firms.

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3.67 Our proposed changes to SUP 12 largely reflect these changes to the ability of firms
to appoint tied agents to carry on cross-border business. In particular, we propose to remove the definitions of ‘EEA tied agent’ and ‘EEA registered tied agent’. Absent a passport regime, EEA States will not recognise the appointment of an agent by a UK firm as sufficient to satisfy any local licensing requirements. We propose to refer postexit only to:

appointed representatives (which includes tied agents of UK MiFID investment firms
which carry on regulated activities in the UK)
FCA registered tied agents (being tied agents of UK MiFID investment firms which
are established in the UK but which do not carry on any business in the UK)
Section 3.6 Primary markets
3.68 This section covers the review of the Prospectus Rules (PR), the Listing Rules (LR) and
parts of the Disclosure Guidance and Transparency Rules (DTR) sourcebook.21
3.69 The Treasury has proposed in its policy note on Official Listing of Securities,
Prospectus and Transparency (Amendment) (EU Exit) Regulations 2018) that the UK’s primary markets regime after Brexit should apply to all issuers that:
have securities admitted to trading on a regulated market in the UK or admitted to
listing in the UK, or
are making a public offer in the UK
3.70 This applies irrespective of the country in which the issuer was incorporated. Most of
the changes we propose to make to the LR, PR and DTR are to ensure consistency with the Treasury’s proposed approach.
3.71 In practice, this means that certain issuers will need to have a prospectus approved by
us, where they now rely on a passported document. Similarly, some issuers will have to make disclosures according to our rules where they now do so following the rules of their home competent authority.
3.72 The government has committed to continue to treat prospectuses that are valid in the
UK before exit (including those approved by a competent authority in a different EU member state) as valid for the remainder of the 12 months from their date of approval, including where that includes a period after the UK exits the EU. Listing Rules – Free float requirements
3.73 Under our current rules, when an issuer applies for admission of shares or depositary
receipts over shares to the Official List, it must demonstrate that enough securities of that class are distributed to the public in one or more EEA states. The underlying rationale for this rule is to ensure that there will be enough liquidity in the share class which is to be listed. This is also referred to as the ‘free float’. 21 DTR 1A, 4-6, 1B, 7, 1C, 8 and TP 1, App 1 and Schedules only

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3.74 A continuing obligation exists on issuers which requires them to maintain the level
of shares in public hands within the EEA at 25% or above (or a lower level if we have agreed to this).
3.75 In practice liquidity is largely independent of the geographical location of the holders
of securities and we regularly grant waivers from the free float requirement to allow inclusion of ‘rest of world’ investors in the free float calculation.
3.76 Further, the current requirements are inconsistent with the baseline approach that
EEA states and non-EEA states be treated the same.22
3.77 However, reframing the free float requirement by changing the reference from EEA to
UK would produce an even less appropriate basis for assessing likely liquidity, because of the participation of overseas investors in UK markets.
3.78 We therefore propose to remove the reference to EEA holders in the rules. This will
mean that holders from any jurisdiction can be counted towards the free float. Q10: Do you agree with the proposed amendment, which will lead to shareholders in all jurisdictions being eligible for inclusion in the free float calculation of shares in public hands? Disclosure Guidance and Transparency Rules (DTR) Transparency requirements
3.79 DTR 1A and 4-6, covered in this section, currently apply only to issuers with securities
admitted to trading on a regulated market in the EU and for which we are the home competent authority. We propose amendments to reflect that the home/host state distinction will fall away. After exit, the transparency rules will only apply to issuers with securities admitted to trading on a UK regulated market.
3.80 We are proposing to amend the provisions setting out which public-sector issuers can
benefit from an exemption from publishing annual and half-yearly financial reports to remove references to the EEA, rather than replace them with UK. This is in line with changes the Government is making to Part VI of FSMA in relation to public sector issuers. Consequently, a wider group of issuers will benefit from the exemption from publishing such reports, notably public international bodies and central banks.
3.81 Following the changes the Treasury has proposed to make in the corresponding
policy note, these issuers will also be able to issue their securities without producing a prospectus under FSMA.
3.82 At present, DTR 4.1.6R requires issuers with securities admitted to trading on an EU
regulated market to make use of International Financial Reporting Standards (IFRS), as adopted by the EU, for their consolidated accounts, unless their home jurisdiction’s standards are deemed equivalent by the European Commission and for Transparency Directive purposes we have also assessed the standards and granted an exemption for that jurisdiction. We propose to change this requirement so that issuers will be required to use IFRS as adopted by the UK instead. 22 See paragraph 1.6 of this CP

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3.83 The Department for Business, Energy and Industry Strategy (BEIS) will lay an SI that
gives the UK the powers to adopt IFRS at and post-exit. As this SI has not yet been laid in parliament (BEIS expects it to be laid early in 2019), and therefore does not constitute existing legislation, the amendments we propose to our rules and the relevant Glossary definitions may need to change to reflect the BEIS SI.
3.84 The Government’s approach is to provide continuity, where possible, following the UK’s
exit from the EU. Therefore, in a no-deal scenario, HMT has stated that it intends to issue an equivalence decision, in time for exit day, determining that EU-adopted IFRS can continue to be used to prepare financial statements for Transparency Directive requirements and for the purposes of preparing a prospectus under the Prospectus Directive.
3.85 This will allow issuers registered in EEA states with securities admitted to trading on
a UK regulated market or making an offer of securities in the UK to continue to use EU-adopted IFRS when preparing consolidated accounts. All issuers will also be able to continue to prepare financial accounts using EU-adopted IFRS for financial years beginning before exit date.
3.86 DTR 4.1.7R permits UK traded non-EEA issuers to use an EEA auditor to provide the
audit report in respect of their annual financial statements. After exit, auditors based in the EEA will become subject to the requirements currently applicable to third country auditors, including registration with the FRC. This will also apply when they audit UKtraded EEA issuers. We propose to amend DTR 4.1.7R to reflect this change.
3.87 Again, for financial years beginning before exit day, we propose that the current
provisions allowing the use of an EEA auditor without registration will remain in force. Registration for financial years beginning on or after exit day will be required in time for the auditor to sign the relevant audit report.
3.88 DTR 5 imposes notification requirements on issuers and on holders of voting rights
in issuers. Such notification requirements do not apply in respect of voting rights provided to or by members of the European System of Central Banks in the context of carrying out their functions as monetary authorities. To be consistent with the approach of treating the EU and its member states in the same way as non-EU or third countries after exit day, we propose to amend this reference so the notification exemption is available to the Bank of England only.
3.89 DTR 6 sets out, among other things, the requirements that issuers need to comply
with when disseminating regulated information. Currently issuers can choose between using a Primary Information Provider (PIP) or an incoming information society service. After exit, issuers will only be able to use a PIP to disseminate such information. Q11: Do you agree with our proposal to remove the reference to the EEA in the provisions setting out which issuers can benefit from an exemption from producing accounts? Q12: Do you agree with our proposals to amend the requirements in DTR 4.1.6R and DTR 4.1.7R in relation to audited financial statements?

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3.90 DTR 1B and 7.1 set out requirements in relation to audit committees. DTR 1B.1.3R
provides an exemption from DTR 7.1 for an issuer which is a subsidiary undertaking of a parent undertaking, where the parent undertaking is subject to DTR 7.1 or to requirements implementing article 39 of the Audit Directive in any other EEA State.
3.91 We propose to amend this exemption so that such an issuer will only be exempt from
DTR 7.1 where the parent undertaking is subject to DTR 7.1. However, we propose that the existing exemption will continue to apply in respect of a financial year beginning before exit day. Q15: Do you agree with our proposal to change the exemption from DTR 7.1 in respect of subsidiary undertakings?
Section 3.7 Other sourcebooks
Emission auctions
3.92 The Government has previously announced23 that the UK will be excluded from
participating in the EU Emissions Trading System in a ‘no deal’ scenario. The relevant FSMA SIs will be published in due course but we expect the main consequences for UK financial services firms to include the following:

The regulated activity of bidding in emission auctions will cease as of exit day and
firms’ permissions will no longer comprise this activity.
There will be no UK emission auction platform under the Recognition Auction
Platform Regulations 2011.
3.93 UK firms will still be able to trade in the secondary EU emission allowances market and
this RAO investment category will remain a designated investment for the purposes of the Glossary.
3.94 We propose to make the corresponding changes to PERG 2 and REC 2A to reflect
these changes and, in due course, will ensure that the relevant Handbook references relating to ‘bidding in emissions auctions’ and ‘auction regulation bidding’ are revisited and deleted, as appropriate. 23 www.gov.uk/government/publications/meeting-climate-change-requirements-if-theres-no-brexit-deal/meeting-climate-changerequirements-if-theres-no-brexit-deal

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Section 3.8 Update to the first consultation
3.95 Our first CP used the version of our Handbook in effect on 1 July 2018. Since
then there have been a small number of updates to our Handbook which require us to propose additional amendments, for example changes arising from the implementation of the Insurance Distribution Directive (IDD).
3.96 The detailed amendments are set out in the draft instruments at Appendix 3.
Q16: Are there any proposed changes reflected in the instruments in Appendix 3 that are not cross-cutting in nature (see Chapter 2) or discussed in this chapter where you think we should re-consider our approach? If so, why? Q17: Are there any proposed changes where you think we should not follow the baseline approach of treating the EEA as a third country? If so, why?

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Brexit: Proposed changes to the Handbook and Binding Technical Standards – second consultation 4 Changes related to the Temporary Permissions Regime (TPR) Background
4.1 Under the EU passporting regime,24 financial services firms specified in the relevant
directives25 in any European Economic Area (EEA) country have access to the single market for financial services.26 This means that they can set up branches or provide financial services, within the scope of the passporting provisions of the directives, in other EEA countries without the need for further authorisation.
4.2 As explained in CP 18/29,27 if the withdrawal agreement between the UK and the EU
does not come into effect, the Government has brought forward legislation to set up the TPR for inbound passported firms and investment funds. The TPR will reduce the risk of harm associated with an abrupt loss of permission by enabling firms that passport into the UK to undertake new business that falls within the scope of their existing permissions, continue to perform their contractual rights and obligations and manage existing business.
4.3 Firms within the regulatory perimeter in the UK need authorisation unless they are
exempt.28 To the extent that a firm’s passport covers regulated activities, a temporary permission will allow the firm to continue to undertake all those activities after exit day. The TPR requires relevant firms to notify us if they want a temporary permission, which will last for a maximum period of 3 years. This will vary depending on when they are asked to submit their application for full authorisation in the UK. The Temporary Permissions Regime and this consultation
4.4 In CP18/29, we set out how, if there is not an implementation period following the UK’s
withdrawal from the EU, we envisaged the TPR working, and how our rules would apply to those within the regime. In this chapter, we set out proposals about the application of certain of our rules to firms in the TPR (TP firms), which were described in CP18/29, but not consulted on in that CP. These include rules relating to:

Senior Managers & Certification Regime and the Approved Persons Regime
24 www.fca.org.uk/firms/passporting
25 These are the Banking Consolidation Directive (BCD), the Capital Requirements Directive (CRD), the Solvency II Directive (S2), the Markets in Financial Instruments Directive (MiFID II), the Insurance Mediation Directive (IMD) and from October 2018 the Insurance Distribution Directive (IDD), the Mortgage Credit Directive (MCD), the Undertakings for Collective Investment in Transferable Securities Directive (UCITS), the Alternative Investment Fund Managers Directive (AIFMD), the Payments Services Directive (PSD2), the Electronic Money Directive (EMD) and the Emission Allowance Auctioning Regulation. 26 In addition, firms not covered by these directives can also have access to the UK financial services market by virtue of rights under the EU treaties if certain conditions are met, as specified in Schedule 4 to the Financial Services and Markets Act 2000. These firms are known as Treaty firms. 27 CP18/29: Temporary permissions regime for inbound firms and funds, FCA, October 2018:
www.fca.org.uk/publications/consultation-papers/cp18-29-temporary-permissions-regime-inbound-firms-and-funds 28 www.fca.org.uk/firms/authorisation/when-required/exemptions-exclusions

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Financial Services Compensation Scheme
Financial Ombudsman Service
Disclosure of a TP firm’s authorisation status (status disclosure)
4.5 Note that only the proposals in paragraphs 4.26 to 4.29 to include all TP firms (including
those that do not have an establishment in the UK) in the compulsory jurisdiction of the Financial Ombudsman Service and our complaints handling rules and guidance are relevant for EEA electronic money institutions, EEA payment institutions and EEA registered account information service providers. Senior Managers and Certification Regime (SM&CR) and the Approved Persons Regime (APR)
4.6 In this section, we describe the changes we propose to make to the SM&CR and APR to
deal with TP firms.
4.7 The changes cover both the position at exit day and, in relation to the SM&CR, as it will
apply to TP firms that are regulated by us but not the PRA (solo-regulated TP firms). This means proposing changes to the near-final rules and guidance included in Policy Statement PS18/14 (Extending the Senior Managers & Certification Regime to FCA firms – Feedback to CP17/25 and CP17/40, and near-final rules).29
4.8 In CP18/29, we explained how we proposed applying the SM&CR or APR, as applicable,
to an EEA firm with a UK branch (EEA branch) during the TPR. We proposed maintaining the current requirements that apply to EEA branches under the SM&CR and APR throughout their time in the TPR. This means that the additional controlled functions and requirements that apply under the third-country regime under SM&CR and APR will apply only once a firm has been fully authorised and has left the TPR.
4.9 We propose to retain the existing SM&CR and APR EEA branch regimes for firms in the
TPR, with a few amendments as set out below.
SM&CR for dual-regulated EEA branches in the TPR
4.10 The additional functions and requirements (set out in Chapter 3) that apply to thirdcountry branches, will only apply when the EEA branch has subsequently been fully
authorised as a third country branch in the UK.
4.11 As the SM&CR will already apply to dual-regulated EEA branches (with banking
branches subject to the SM&CR since March 2016 and insurers from December 2018), there will be no major changes for these firms until they are fully authorised and leave the TPR. Minor changes are set out in the following section. APR and SM&CR for solo-regulated EEA branches in the TPR
4.12 For solo-regulated EEA branches in the TPR, the APR will still be in force on exit day. In
line with our proposals for dual-regulated EEA branches, we will maintain the current requirements for EEA branches throughout their time in the TPR. If an EEA branch has 29 The text on which our proposed amendments relating to the SM&CR and the APR are based has been adjusted to take into account the changes to the Handbook made by the Individual Accountability (Dual-Regulated Firms) Instrument 2018.

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4.13 If an EEA branch receives full authorisation as a third-country branch before the
SM&CR commences for solo-regulated firms, it will need to apply for approval for the additional functions that apply to third-country branches under the APR. Those APR functions will be converted to the SM&CR functions for third-country branches when the SM&CR commences, in line with the near-final rules in PS18/14.
4.14 Dual-regulated EEA branches are already required to prepare and maintain
Management Responsibilities Maps. This requirement will also apply to some soloregulated firms. The requirement also applies when they are a third-country branch under the SM&CR. However, we propose to remove the current ability, set out in SYSC 25.6, of an EEA branch to omit details that are already included in information supplied as part of the passporting process (which the Handbook refers to as its requisite details). Firms in the TPR must therefore include this information.
4.15 Some elements of competence assessments of approved persons under the APR
and Senior Managers under the SM&CR, as set out in FIT, are reserved to home state regulators. These reserved elements will disappear at exit day and any competence assessments for SMF applications submitted under TPR will include all relevant factors. There are similar reserved elements applying to the scope of controlled functions under the APR and Senior Manager and Certification Functions under the SM&CR, which we will also remove.
4.16 We will also remove the relevant provisions in APER 2.1A and COCON 1.1 that provide
exemptions from obligations contrary to a Single Market Directive, the Auction Regulation or the Benchmarks Regulation, except where these continue to have effect in UK law under the EUWA. PRA Requirements
4.17 Dual-regulated EEA branches in the TPR should also have regard to information
published by the PRA31 in this area.
Q18: Do you agree with our proposals for applying the SM&CR to EEA branches while they are in the TPR? If not, why not? Moving from the EEA to third-country SM&CR
4.18 Once authorised by us, firms will move out of the TPR and be authorised as a thirdcountry branch. For both solo- and dual-regulated firms, the EEA Branch Senior
Management Function will then fall away. Firms will need to apply to us for approval for individuals to hold the additional functions that will apply to them under the third country branch regime at the same time as applying for authorisation, and then on an ongoing basis as applicable. This applies even where an individual previously held the EEA Branch Senior Management Function, as these are qualitatively different functions. 30 www.fca.org.uk/publication/policy/ps18-14.pdf 31 CP26/18 UK withdrawal from the EU: Changes to PRA Rulebook and onshored Binding Technical Standards, PRA, October 2018:
www.bankofengland.co.uk/-/media/boe/files/prudential-regulation/consultation-paper/2018/cp2618-complete.pdf

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4.19 Where a firm has an MLRO under the EEA branch regime, the individual’s approval
for this function will be maintained once the firm is fully authorised as a third country branch, as the role is the same in both regimes. EEA services firms
4.20 The SM&CR and the APR do not apply to EEA firms who currently passport into the UK
on a freedom to provide services basis, and therefore do not have a UK establishment (EEA services firms). We do not propose to change this when these firms move into the TPR, but the APR and SM&CR will apply to them once they have been fully authorised in the UK and leave the TPR.
4.21 Dual-regulated EEA firms in the TPR without a UK branch should also have regard to
information published by the PRA32 in this area.
Financial Services Compensation Scheme (FSCS)
4.22 In CP18/29,33 we explained our intended approach for FSCS cover for firms in the TPR
under our compensation rules.34 In summary, we proposed to:

provide consumers of EEA firms in the TPR operating from UK establishments with
FSCS protection, equivalent to the cover provided to customers of UK firms
continue to provide FSCS cover in respect of the activities of certain incoming fund
managers (without an establishment) that are currently (pre-exit) covered by the FSCS
4.23 In this CP, we confirm we are proposing to apply the approach set out above and are
consulting on the rule changes required for these proposals. EEA firms covered by the FSCS in the TPR will be required to contribute to the FSCS levy from 1 April 2019, even if they were not covered by the FSCS pre-exit.35 Q19: Do you agree that consumers of EEAfirms in the TPR with UK establishments should be protected by the FSCS, on an equivalent basis to otherUK authorised firms,for activities from those establishments during TPR? If not, why? Q20: Do you agree that we should continue to provide FSCS cover for activities of certain incoming fund managers without an establishment in the UK during TPR, as they are already covered by the FSCS without any need to “top up”? If not, why? Incoming EEA-based firms and compensation scheme cover
4.24 We proposed in CP18/29 that firms in the TPR will have to comply with our Principles
for Businesses. Principle 7 requires firms to pay due regard to the information needs 32 CP26/18 UK withdrawal from the EU: Changes to PRA Rulebook and onshored Binding Technical Standards, PRA, October 2018:
www.bankofengland.co.uk/-/media/boe/files/prudential-regulation/consultation-paper/2018/cp2618-complete.pdf 33 see paragraphs 4.62 to 4.78 34 FSCS cover under PRA rules (for claims in respect of deposits and insurance provision) will be addressed in PRA Consultation Papers. 35 Firms that become participant firms part way through the FSCS’s financial year are not generally (outside the TPR) liable to pay a FSCS levy during that year (see FSCS 6.5.9R).

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4.25 Therefore, we propose to issue the following guidance:
We expect incoming EEA-based firms in the TPR to consider and communicate to their customers any material changes in home state investor compensation scheme coverage, as a result of UK withdrawal from the European Union. We would also expect such a firm to provide, on a customer’s request, information concerning the firm’s inclusion in any compensation schemes, including the firm’s home state scheme. Q21: Do you agree with the proposed guidance for incoming EEA-based firms relating to material changes in home state compensation scheme coverage? If not, why? Financial Ombudsman Service
4.26 In CP18/29,36 we proposed to include EEA services firms37 in the TPR in the
Compulsory Jurisdiction (CJ) of the Financial Ombudsman Service. We also proposed to apply our complaints-handing rules to them. Firms with a UK branch are already included in the CJ and this will continue as part of the TPR.
4.27 For EEA services firms that are already members of the Voluntary Jurisdiction (VJ),
complaints (including post-exit complaints) about their pre-exit activities will continue to come under the VJ as they do now. If a firm wants to leave the VJ, it will continue to have to follow the Financial Ombudsman Service’s process, as set out in DISP 4.2.7R. Furthermore, the proposed FEES rules38 will allow for firms joining the TPR which are also in the VJ to pay a reduced VJ levy to reflect the fact that certain activities directed at the UK which were covered by the VJ will now be covered by the CJ going forward.
4.28 The Financial Ombudsman Service will consider in future years whether any further
adjustment to the VJ annual levy for EEA services firms who are VJ participants (whether or not they are also in the TPR) is appropriate.
4.29 In this CP, we are consulting on the rule changes required for the above proposals.
Q22: Do you agree that EEA services firms in the TPR should be included in the Compulsory Jurisdiction of the Financial Ombudsman Service and our complaints-handling rules and guidance? If not, why? Q23: Do you agree with our proposals regarding EEA services firms in the TPR who are already members of the Voluntary Jurisdiction? If not, why? 36 see paragraphs 4.79 to 4.91 37 This includes EEA electronic money institutions, EEA payment institutions and EEA Registered AIS Providers that join the TPR. 38 FEES 5 – link to instrument or place in instrument when available

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4.30 We are proposing that firms in the TPR should include specific disclosure in their letters
(or electronic equivalents) to retail clients of their authorisation status in line with the current requirements of GEN 4.3. EEA branches must already make a status disclosure, and so they will need to change the existing wording to reflect the firm’s status because of the TPR. For EEA services firms, disclosure is only currently required where the firm indicates it is an authorised person, so disclosure in all letters (or electronic equivalents) will be a new requirement.
4.31 Disclosure of the firm’s status as a TP firm, and flagging to consumers where they
can find out more about TPR, is important given the significant change to TP firms’ regulatory status. This is because of the loss of passporting rights and their deemed temporary permission under Part 4A of FSMA, and the potential for home state protections and supervision to fall away following exit day. This will give consumers the opportunity to understand the nature of the firm they are dealing with, and the protections which are available to them.
4.32 We also propose that EEA services firms should include disclosure that the consumer
protections which apply may be different from those in the UK, given that our rules will allow them to continue to comply with the home state implementation of many rules (rather than the UK implementation of those rules) as explained in paragraph 4.11 of CP18/29.
4.33 The wording we intend to use for solo-regulated TP firms is:
“Deemed authorised and regulated by the Financial Conduct Authority. [For EEA services firms: The nature and extent of consumer protections may differ from those for firms based in the UK.] Details of the Temporary Permissions Regime, which allows EEA-based firms to operate in the UK for a limited period while seeking full authorisation, are available on the Financial Conduct Authority’s website.”
4.34 The wording we intend to use for dual-regulated TP firms is:
“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)]. Deemed authorised by the Prudential Regulation Authority. Subject to regulation by the Financial Conduct Authority and limited regulation by the Prudential Regulation Authority. [For EEA services firms: The nature and extent of consumer protections may differ from those for firms based in the UK.] Details of the Temporary Permissions Regime, which allows EEA-based firms to operate in the UK for a limited period while seeking full authorisation, are available on the Financial Conduct Authority’s website.”
4.35 In each case, the wording for firms with a top-up permission will include different text
to reflect that top-up permission, explaining that firms are authorised by the FCA or PRA (as appropriate) and with deemed variation of permission.
4.36 We also propose to extend the current duties in GEN 4.5 which require that a firm must
not indicate or imply that it is authorised, regulated or otherwise supervised by us or the PRA in respect of business for which it is not, so that it also applies to EEA services firms in the TPR (which are not currently subject to this rule), and to retain these duties for EEA branches in the TPR.

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5.1 As in our first CP, this consultation sets out our proposals to correct provisions in BTS39
that would no longer operate effectively, or otherwise amend them in line with our approach to onshoring, once the UK has left the EU.
5.2 This consultation covers many of the BTS that were not addressed in the first CP, but
not all of them. This is because we will only present our proposed amendments to BTS when the corresponding SI or policy note has been published by the Government, as described in Chapter 1. In this CP, we are consulting on changes to BTS in respect of the following:

Markets in Financial Instruments Directive and Regulation
Packaged Retail and Insurance-based Investment Products Regulation
Payment Accounts Directive
Payment Services Directive
European Market Infrastructure Regulation
Insurance Distribution Directive
Market Abuse Regulation
European Benchmark Regulation
Money Market Funds Regulation
Transparency Directive
Prospectus Directive
European Long-Term Investment Fund Regulation
European Venture Capital Funds Regulation
European Social Entrepreneurship Fund Regulation
5.3 There are also many BTS mandated under Level 1 legislation that have not been
finalised by the EU. In this CP, we include BTS that have been either published in the Official Journal of the EU or published in near final form by the European Commission by 23:59 GMT on 24 October 2018. BTS that have not reached that stage are 39 Please see full list of BTS covered in this CP in Annex 4

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5.4 The Treasury proposes to add relevant final BTS to individual onshoring legislation,
or an addendum to the Financial Regulators’ Powers (Technical Standards) (EU Exit) Regulations 2018, as needed, to specify BTS that can be amended using the delegated powers described.
5.5 Some BTS within CRD, CRR, EMIR, FICOD, MIFID and MIFIR40 are relevant to firms and
persons supervised by us, the Bank of England and the PRA. The SI giving us the power to correct BTS designates an appropriate regulator for each BTS, and in some cases, this is shared between two regulators.
5.6 In the case of CRD, CRR, EMIR, FICOD, and MIFID the approach we, the Bank and
the PRA are taking is that one authority will take the lead in making corrections in preparation for exit day, based on which authority’s remit and objectives are most relevant. We have collaborated with the other designated regulator, and we will be sharing consultation responses with one another.
5.7 Except for EMIR and MIFIR, as described below, we propose to make identical changes
to those made by the other regulator, so that at exit day, we will have identical but separately controlled BTS on these areas. We can adjust them according to the populations we respectively regulate, so that the division of responsibility is clear to follow.
5.8 As mentioned in our first CP, for the existing BTS that accompany EMIR and MiFIR, we,
the Bank and the PRA believe it is important that the substance of our BTS remains identical after exit day as these concern areas of overlap. Therefore, any changes to these BTS before exit day will be made with each other’s consent.
5.9 Under the onshoring SIs, power is designated to each regulator to make new technical
standards, so it is clear from where new rules will emerge after exit day.
5.10 Table 5 below shows the BTS included in this consultation or those of the Bank of
England that are shared between regulators and the lead authority for each BTS.
Table 5
EU Regulations for which the appropriate regulator is both the PRA and the FCA or the Bank and the FCA Lead authority EU Regulations FCA is the lead authority for these EMIR BTS. European Market Infrastructure Regulation BTS 148/2013; 149/2013; 1247/2012 PRA is the lead authority for these BTS. Details on proposed changes can be found in the PRA’s consultation. European Market Infrastructure Regulation BTS 2016/2251; Financial Conglomerates Directive BTS 342/2014; Financial Conglomerates Directive BTS 2015/2303 40 Capital Requirements Directive, Capital Requirements Regulation, Financial Conglomerates Directive, Bank Recovery and Resolution Directive, European Market Infrastructure Regulation, Markets in Financial Instruments Directive/Regulation.

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5.11 In correcting BTS, we have followed the approach envisaged by Government in its
published secondary legislation under the EUWA, and so most of our changes are consequential. These proposed amendments are not described in detail in this consultation but we show all draft instruments with their changes in Appendix 4.
5.12 Paragraphs 5.15 to 5.47 provide more detail and reasoning where our proposals
depart from the baseline approach described in paragraph 1.6 or where we consider a different approach to correcting the relevant deficiency is appropriate. We have also specified where changes are specific to certain BTS.
5.13 All changes to BTS should be read alongside the amendments made to the Level 1
legislation. You may also find it useful to refer to the amendments to our Handbook, where Handbook provisions and BTS interrelate. Sectoral changes
5.14 Most of the changes that we are proposing to make to BTS are to fix gaps that are
cross-cutting in nature and are reflected within the cross-cutting chapter of this and our first consultation. We have specified below where changes are specific to certain BTS. The Markets in Financial Instruments Transparency-related BTS
5.15 The Markets in Financial Instruments Regulation (MiFIR) sets, among other things, the
rules determining the conditions under which pre-and post-trade transparency (i.e. the disclosure of trading interests to the market before and after the trade is done) applies to trading venues and investment firms dealing over-the-counter (OTC).
5.16 The transparency regime is calibrated differently for equities (shares, ETFs, depositary
receipts, certificates and other similar financial instruments) and non-equities (bonds, structured finance products, derivatives and emission allowances). However, the framework is, for both classes of instruments, built around the principle that trading interests (for example bid and offer prices) and executed transactions must be disclosed to the public unless exemptions in the form of waivers or deferrals apply.
5.17 The purpose of waivers and deferrals is to allow the transparency regime to foster
more liquid and efficient markets. Waivers and deferrals depend on calculations and thresholds that must be published by regulators based on data and methodologies in BTS. Some of the calculations determine the size of orders or transactions above which transparency can be waived or deferred. Others determine whether financial instruments are liquid or not, and therefore benefit from waivers and deferrals.
5.18 To protect price formation in equities, certain waivers are also subject to a mechanism
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5.19 Onshoring this regime presents several challenges. First, the regime was designed and
calibrated with the assumption that it would apply across 28 national markets. Some adjustments are therefore needed to ensure the regime continues to work as intended when applied on a standalone basis in the UK. Secondly, we will need to take on ESMA’s role of performing and publishing a very large number of transparency calculations. We have already begun preparations for taking on this role.
5.20 The Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018 creates
the broad framework to allow us to meet these challenges. These Regulations grant a set of temporary powers that provide us with some flexibility as to how the MiFID II transparency regime is operated during a transitional period of up to four years from exit day, with the view to maintaining existing outcomes as far as possible. These temporary powers include the ability, in specified circumstances, to:

amend certain transparency calibrations (which are otherwise frozen on exit day)
direct suspensions of waivers under the Double Volume Cap Mechanism
Suspend the obligation on trading venues to disclose pre-and post-trade trading
information in respect of certain instruments
determine the class to which financial instruments belong under Article 14(6)(a)
MiFIR
publish the data for the systematic internaliser determination under Article 16(z)(a)
of the MiFID Delegated Regulation
5.21 When exercising the temporary powers, we must consider, for example, whether the
use of the relevant power would advance our market integrity objective or where a failure to use the power would unduly harm price formation. We will issue a statement of policy on how the temporary powers will be used.
5.22 In recognition of the international nature of wholesale financial markets, the Markets
in Financial Instruments (Amendment) (EU Exit) Regulations 2018 also grant us new permanent powers. These include the power to define the ‘relevant area’ (consisting of the UK and other countries or regions that we specify) for one or more financial instruments. This is subject to our ability to obtain sufficient reliable trading data from that country or region. This allows us to reflect the liquidity in financial instruments that are traded outside the UK when making determinations about the liquidity status of financial instruments admitted to trading or traded on a UK trading venue.
5.23 The MiFID II transparency regime has several BTS associated with it. Much of the
detailed specification of the regime is set out in those BTS. We propose to make amendments to the following:
Commission Delegated Regulation (EU) 2017/587 regarding transparency
requirements for trading venues and investment firms in respect of shares, depositary receipts, exchange-traded funds, certificates and other similar financial instruments and on transaction execution obligations in respect of certain shares on a trading venue or by a systematic internaliser (RTS 1).

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Commission Delegated Regulation (EU) 2017/583 regarding transparency
requirements for trading venues and investment firms in respect of bonds, structured finance products, emission allowances and derivatives (RTS 2).
Commission Delegated Regulation (EU) 2017/577 regarding the volume cap
mechanism and the provision of information for the purposes of transparency and other calculations (RTS 3).
Commission Delegated Regulation (EU) 2017/588 regarding the tick size regime for
shares, depository receipts and exchange traded funds (RTS 11) Para.
5.24 The key changes we propose to make to the BTS are intended to give effect to the
onshoring principles in the SI. We propose:
inserting the concept of the ‘relevant area’ into specific calculations
continuing to publish transparency information under RTS 1, 2 and 11 during
the transitional period. The new provision here reflects the fact that we will not immediately be in a position to apply the methodology for calculations to UK trading data, but we would nevertheless be required to have regard to the prescribed methodology, and we would be permitted to use a broad range of available data
that, as of Exit day, the most recently published pre-exit calculations which take
account of UK trading would continue to apply, until our own publications under RTS 1, 2 or 11 (as above) take effect. Q25: Do you agree that our proposed amendments to the MiFIR transparency-related BTS are appropriate, given the provisions of the Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018 SI? The Packaged Retail and Insurance-based Investment Products (PRIIPS) Regulation BTS
5.25 The PRIIPs Regulatory Technical Standards (RTS) 2017/653 sets out standards applying
to the presentation, content, review and revision of key information documents (KIDs). If an investment product falls within the scope of the PRIIPs Regulation, the PRIIP manufacturer must prepare a KID and publish it on its website.
5.26 We propose to amend the PRIIPs RTS so that:
EEA entities are not treated as third-country entities under certain RTS provisions
related to risk indicators. The aim of this proposal is to ensure we maintain operable equivalence with the methodologies in the EU PRIIPs RTS and avoid risk ratings set out in KIDs for certain PRIIPs increasing on exit day, and potential market disruption. As part of this approach, in relation to the assessment of credit risk, we propose to allow PRIIP manufacturers to select an external credit assessment institution certified or registered either with the FCA or with ESMA. This deviates from, and does not affect, the approach which is being taken to the onshoring of the Credit Rating Agencies Regulation.
As things stand, the PRIIPs RTS will not apply in relation to all UCITS schemes,
including EEA domiciled funds, until 31 December 2019. This is because there is currently a time-limited exemption under the PRIIPs Regulation exempting UCITS

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5.27 IDD aims to enhance consumer protection when buying insurance and to support
competition between insurance distributors by creating a level playing field. It has several delegated acts, including one which sets the standardised presentation format for the disclosure of key information to consumers for general insurance contracts: the Insurance Product Information Document (IPID).
5.28 We propose to onshore the IPID requirements41 so that, except for in one area, they
continue to apply as at present to contracts of insurance sold in the UK. However, there is one substantive issue where we are proposing a change.
5.29 We propose to remove the requirement for IPIDs to stipulate the EEA state in which
the product manufacturer is registered. This is relevant for identifying the state responsible when a contract is sold cross-border. In the absence of EU passporting, we do not consider it is necessary for the IPID to specify this information, as firms would be expected to be authorised in the UK to continue to do insurance business here. There are also other existing requirements on firms to disclose their address.
5.30 We do not consider that firms which already have, and continue to issue, IPIDs
stipulating that they are registered in the UK or Gibraltar need to amend their documents to remove this information. The Payment Accounts Directive (PAD) BTS
5.31 BTS set out in Commission Implementing Regulations (EU) 2018/32, 2018/33 and
2018/34 aim to improve the transparency and comparability of fee information in relation to payment accounts for consumers through standardised terminology and disclosure documents.
5.32 We published the final linked services list in April 201842. This is a list of standardised
terminology to describe key services that payment service providers must use in their information to consumers where applicable. The final linked services list incorporates the Union standardised terminology contained in BTS 2018/32.
5.33 The Payment Accounts (Amendment) (EU Exit) Regulations 2018 will revoke the BTS
and remove references to EU standardised terminology in the UK Payment Accounts Regulations as it will not be applicable under the onshored legislation. The final published linked service list will continue to apply.
5.34 Most of the proposed amendments to 2018/33 and 2018/34 are minor and cross
cutting. However, we propose to amend references to the ‘national list’ in 2018/33 and 2018/34 to refer to the ‘final linked services list'.This aligns with the terminology used 41 https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32017R1469&from=EN 42 www.fca.org.uk/publication/feedback/payment-accounts-regulations-final-linked-services-list.pdf

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5.35 We also propose to remove references to the comprehensive cost indicator in 2018/33
and 2018/34. Payment service providers did not need to provide that information to consumers under the Payment Account Regulations 2015 and will not be required to do so under the Payment Accounts (Amendment) (EU Exit) Regulations 2018. Q27: Do you agree with the proposed changes to the BTS under PAD? The Bank Recovery and Resolution Directive (BRRD), Financial Conglomerates Directive (FICOD) and Capital Requirements associated BTS
5.36 We share responsibilities with the PRA for a proportion of the BTS adopted under
BRRD, FICOD, CRD IV and CRR. For these, we have agreed with the PRA to split each onshored BTS at exit day43 and intend to make the same amendments as the PRA at exit. The outcome would be to have separate but identical BTS applying to PRAauthorised and firms authorised by us.
5.37 The Bank of England is consulting on the onshoring amendments to the BRRD BTS
concerned with resolution, and the PRA is consulting on those to the BTS under FICOD, CRD IV and CRR. While we are conducting our own consultation through this paper on the amendments to our part of each split BTS, firms authorised by us should have regard to the PRA consultation, published on 25 October,44 to view the detail of their proposed amendments. European Market Infrastructure Regulation (EMIR)
5.38 EMIR imposes requirements on entities that enter into derivative contracts. It also
establishes common organisational, conduct of business and prudential standards for central counterparties (CCPs) and trade repositories (TRs).
5.39 In this CP, we are consulting on proposed changes to BTSs concerning the data
publication and data access requirements for TRs, general ‘level 2’ requirements concerning clearing, access by CCPs to trading venue market data, and risk mitigation techniques and the content, format and frequency of reports to be made to a TR.
5.40 The BTSs are:

Commission Delegated Regulation (EU) 149/2013 regarding indirect clearing
arrangements, the clearing obligation, the public register, access to a trading venue, non-financial counterparties, and risk mitigation techniques.
Commission Delegated Regulation (EU) 148/2013 on minimum details of the data
to be reported to TRs (as amended by Commission Delegated Regulation (EU) 2017/104).
Commission Delegated Regulation (EU) 1247/2012 on format and frequency
of trade reports to TRs (as amended by Commission Delegated Regulation (EU) 2017/105). 43 using Regulation 4 of the Financial Regulators’ Powers (Technical Standards) (EU Exit) Regulations 2018 44 www.bankofengland.co.uk/prudential-regulation/publication/2018/uk-withdrawal-from-the-eu-changes-to-pra-rulebook-andonshored-bts

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Commission Delegated Regulation (EU) 151/2013 regarding the data to be
published and made available by TRs and the standards for aggregating, comparing and accessing data (as amended by Commission Delegated Regulation (EU) 2017/2155).
5.41 We and the Bank of England have shared remit and objectives in relation to the first
three. As explained in paragraph 5.7, the approach that we and the Bank of England are taking, in preparation for exit day, is that one authority takes the lead in making corrections, based on which authority’s remit and objectives are most relevant. In this case, we are the lead authority and have collaborated with the Bank of England, and will be sharing consultation responses with them.
5.42 The changes are all consequential upon amendments made by the principal SI on
EMIR45 to correct deficiencies arising from the withdrawal of the United Kingdom from the EU.
5.43 However, TRs should note that, in onshoring Commission Delegated Regulation
(EU) 151/2013, we propose to amend the technical arrangements necessary for TRs to provide access to trade data, in accordance with article 81 of EMIR. This is a consequence of our replacing ESMA’s existing ‘TRACE’ system with our ‘Derivatives Data Store’ system.
5.44 Amendments to Commission Delegated Regulation (EU) 149/2013 reflect the Bank of
England assuming functions in relation to:
specifying the classes of OTC derivatives that should be subject to the clearing
obligation, under article 5 of EMIR
the register of classes of OTC derivatives subject to the clearing obligation, under
article 6 of EMIR.
5.45 In onshoring Commission Implementing Regulation (EU) 1247/2012, we propose to:
remove sentences referring to Article 9(3) of EMIR in relation to reporting to ESMA
until a trade repository is registered for a particular derivative class as this provision has been substantially reworded in the SI on EMIR; and
replace references to “ESMA” with references to the “FCA” in connection with the
endorsement of the code referred to in Article 4(9) and the unique trade identifier referred to in Article 4a(1); and
align the taxonomy for financial counterparties with the definition of “financial
counterparty” in the onshored EMIR.
5.46 We note that some of these BTS contain cross-references to EU instruments which
are yet to be onshored. It may be that further amendments to these BTS will be required to appropriately deal with these cross-references. 45 The Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc., and Transitional Provision) (EU Exit) Regulations 2018. The EMIR provisions concerning applications for registration by TRs and related transitional arrangements are contained in The Trade Repositories (Amendment and Transitional Provision) (EU Exit) Regulations 2018.

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Brexit: Proposed changes to the Handbook and Binding Technical Standards – second consultation Q28: Do you agree that we have correctly identified all relevant amendments in our draft BTS text related to the cross-cutting issues set out in Chapter 2? Are there any proposed changes in the instruments in Appendix 4 or discussed in this chapter where you think we should reconsider our approach?

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6.1 Our Handbook forms and related guidance provide regulatory data, disclosures and
other key information to us.
6.2 In many cases, our Handbook forms will have references and provisions that will no
longer have their intended effect after Brexit.
6.3 At this stage, we propose to not carry out a detailed line by line review of all forms to
identify and resolve these provisions. Instead, we will produce a guide which sets out the approach we expect users of our Handbook forms to take after Brexit.
6.4 The purpose of the guide is to provide clarity on how to interpret and complete the
Handbook forms sensibly and purposively, taking into account Brexit, the provisions of the EUWA and amendments made to relevant legislation, including our Handbook rules. To draw attention to this, we propose to add a banner to our website where all Handbook forms are listed, directing users to the guide.
6.5 We consider this is a proportionate response to addressing EU-based references in
our Handbook forms. It is consistent with the Bank/PRA, who also proposed46 to issue a supervisory statement setting out the approach they expect firms to take when interpreting EU-based references found in reporting and disclosure requirements after Brexit.
6.6 The proposed draft guidance can be found at Appendix 2.
Q29: Do you agree with our approach to Handbook forms?
If not, why not? Do you have any comments on the proposed guidance at Appendix 2 to this CP? 46 www.bankofengland.co.uk/-/media/boe/files/prudential-regulation/consultation-paper/2018/cp2618-complete.pdf

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Brexit: Proposed changes to the Handbook and Binding Technical Standards – second consultation 7 Credit rating agencies (CRAs) and trade repositories (TRs)
7.1 CRAs in the EU are regulated under the Credit Rating Agencies Regulation (CRAR) and
supervised by the European Securities and Markets Authority (ESMA). The Treasury intends to amend the legislation to make us the supervisor responsible for CRAs registered under the UK regime.
7.2 TRs in the EU are regulated under the European Market Infrastructure Regulation
(EMIR) and supervised by ESMA. As with CRAs, the Treasury intend to make us the supervisor responsible for TRs registered under the UK regime. More information on our regulation of CRAs and TRs can be found on our website.47
7.3 The legislation that transfers these responsibilities to us will apply our existing
supervisory and enforcement processes as necessary to enable us to fulfil these new roles effectively. Therefore, we propose minor amendments to the Decision Procedure and Penalties Manual (DEPP) and the Enforcement Guide (EG). These amendments are to reflect the changes made by the legislation and describe our enforcement powers and processes in relation to CRAs and TRs. Q30: Do you agree with our proposals to amend DEPP and EG? If not, why? 47 www.fca.org.uk/news/statements/registering-credit-rating-agency

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Brexit: Proposed changes to the Handbook and Binding Technical Standards – second consultation 8 Non-Handbook guidance Our general approach to non-Handbook guidance
8.1 Non-Handbook guidance is guidance published outside of the Handbook.
8.2 Non-Handbook guidance relating to EU law or EU-derived law will continue to be
relevant to matters arising after Brexit where the EUWA converts or preserves the provisions to which the guidance relates.
8.3 In many cases, the relevant provisions will have been amended to ensure deficiencies
are remedied once the UK leaves the EU. However, we do not propose to update nonHandbook guidance issued before exit day to take these amendments into account.
8.4 In light of this, at Appendix 1 we set out how existing non-Handbook guidance should
be interpreted where it relates to EU law or EU-derived law for matters arising on or after exit day.
8.5 In summary, we expect financial institutions and other market participants to sensibly
and purposively interpret non-Handbook guidance, taking into account the provisions of the EUWA and any changes made to the underlying requirement as it is preserved or converted into UK law.
8.6 This approach reflects that we do not generally consider a detailed, line-by-line review
of all existing non-Handbook guidance, in light of amendments to the underlying provision, to be necessary in current circumstances. However, we may at a later stage carry out a detailed review of specific guidance if there is a significant legal or policy reason. Q31: Do you have any comments on the proposed guidance on our approach to non-Handbook guidance set out at
Appendix 1 to this CP?
Q32: Have you identified any non-Handbook guidance which should be specifically reviewed and amended because you think that the interpretive approach proposed will not be enough to ensure the regulatory framework remains fit for purpose? If so, please explain why you think this is the case.

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Annex 1
Questions in this paper
Q1: For those rules where we use powers under the EUWA, do you think any of the proposed changes in this CP or in relevant SIs represent a significant risk to compliance for your firm in time for exit day? If yes, please specify which and explain why this is the case, including projected time needed to comply with requirements were they to come into effect on exit day. Q2: Do you agree with our proposals to introduce general continuity provisions? If not, why? Q3: Do you agree that we have correctly identified all relevant amendments in our draft Handbook and BTS text related to the cross-cutting issues set out above? Do you have any other points you wish to raise about our approach to these cross-cutting issues? Q4: Do you agree with our proposals to remove the claims representative requirement and retain our claims handling requirements? Q5: Do you agree with our proposed changes to COBS 4 and COBS 6 in respect of compensation disclosures? Q6: Do you agree with our proposal to maintain the current scope of the Glossary definitions of ‘nonreadily realisable security’, ‘non-mainstream pooled investment’ and ‘packaged product’ and thereby maintain the application of the rules in COBS to which they relate? Q7: Do you agree with our proposal to amend COBS 10A.4.1R(2)(a) and (b) to include reference to shares and bonds admitted to trading on EEA regulated markets? If not, why? Q8: Do you agree with our proposal that we should rely on the new Handbook Glossary term for UCITS post exit and continue to treat UK and EEA UCITS as financial instruments in relation to which an appropriateness assessment is not necessarily required? If not, why? Q9: Do you agree we should continue to allow ISPVs assuming risks from EEA insurers to do so under COBS 18.6A?

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Brexit: Proposed changes to the Handbook and Binding Technical Standards – second consultation Q10: Do you agree with the proposed amendment, which will lead to shareholders in all jurisdictions being eligible for inclusion in the free float calculation of shares in public hands? Q11: Do you agree with our proposal to remove the reference to the EEA in the provisions setting out which issuers can benefit from an exemption from producing accounts? Q12: Do you agree with our proposals to amend the requirements in DTR 4.1.6R and DTR 4.1.7R in relation to audited financial statements? Q13: Do you agree that we should narrow the exemption from the voting rights notification requirements so that it applies only to the Bank of England? Q14: Do you agree with our proposal to require issuers to use a PIP for disseminating regulated information? Q15: Do you agree with our proposal to change the exemption from DTR 7.1 in respect of subsidiary undertakings? Q16: Are there any proposed changes reflected in the instruments in Appendix 1 that are not cross-cutting in nature (see Chapter 2) or discussed in this chapter where you think we should re-consider our approach? If so, why? Q17: Are there any proposed changes where you think we should not follow the baseline approach of treating the EEA as a third country? If so, why? Q18: Do you agree with our proposals for applying the SM&CR to dual-regulated branches? Q19: Do you agree that consumers of EEA firms in the TPR with UK establishments should be protected by the FSCS, on an equivalent basis to other UK authorised firms, for activities from those establishments during TPR? If not, why? Q20: Do you agree that we should continue to provide FSCS cover for activities of certain incoming fund managers without an establishment in the UK during TPR, as they are already covered by the FSCS without any need to “top up”? If not, why? Q21: Do you agree with the proposed guidance for incoming EEA-based firms relating to material changes in home state compensation scheme coverage? If not, why?

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Brexit: Proposed changes to the Handbook and Binding Technical Standards – second consultation Q22: Do you agree that services firms in the TPR should be included in the Compulsory Jurisdiction of the Financial Ombudsman Service and our complaints-handling rules and guidance? If not, why? Q23: Do you agree with our proposals regarding EEA services firms in the TPR who are already members of the Voluntary Jurisdiction? If not, why? Q24: Do you agree with our proposals regarding status disclosure for firms in the TPR? If not, why? Q25: Do you agree that our proposed amendments to the MiFID II transparency-related BTS are appropriate, given the provisions of the Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018 SI? Q26: Do you agree with our proposed approach about the exemption for UCITS manufacturers from producing a PRIIPs KID? Q27: Do you agree with the proposed changes to the BTS under PAD? Q28: Do you agree that we have correctly identified all relevant amendments in our draft BTS text related to the cross-cutting issues set out in Chapter 2? Are there any proposed changes in the instruments in Appendix 2 or discussed in this chapter where you think we should reconsider our approach? Q29: Do you agree that our proposals to amend DEPP and EG reflect the changes made by legislation? If not, why not? Q30: Do you agree with our approach to amending forms? If not, why not? Q31: Do you have any comments on the proposed guidance on our approach to non-Handbook guidance set out at
Appendix 1 to this CP?
Q32: Have you identified any non-Handbook guidance which should be specifically reviewed and amended because you think that the interpretive approach proposed will not be enough to ensure the regulatory framework remains fit for purpose? If so, please explain why you think this is the case.

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Annex 2
Cost benefit analysis related to the
Temporary Permissions Regime
Introduction

This CBA is prepared in relation only to those rules where we propose to use our
powers under FSMA, as amended by the Financial Services Act 2012. FSMA requires us to publish a cost benefit analysis (CBA) of our proposed Handbook rules where we use certain powers under FSMA, unless we consider that comparing the overall position in which we make the rules with not making them, there is no increase in costs or there is an increase but that increase will be of minimal significance (section 138L (3)).
Section 138I(2)(a) requires us to publish an analysis of the costs, together with an
analysis of the benefits that will arise if the proposed rules are made’. It also requires us to include estimates of those costs and benefits, unless in our opinion these cannot reasonably be estimated or it is not reasonably practicable to produce an estimate. In those cases, we have to include a statement of that opinion.
This analysis presents estimates of the significant impacts of our proposals. We give
a quantitative estimate of the costs and benefits unless we think it is not reasonably practicable to do so or we cannot reasonably estimate them. Our proposals are based on carefully weighing up these multiple dimensions and reaching a judgement about ensuring that disruption for firms moving into the UK regulatory regime, and their customers, is minimised but still maintaining appropriate consumer protections, considering all the other impacts we foresee. Problem and rationale for intervention
In CP18/29, we explained the position of firms in the TPR (TP firms) if we do not
make changes to our Handbook. We said that they would be required to comply with our Handbook as firms with an authorisation under Part 4A of FSMA whose head or registered offices are overseas (Part 4A firms) because of the EEA Passporting Rights (Amendment, etc. and Transitional Provisions) (EU Exit) Regulations 2018 (TPR Regulations).
This would potentially be challenging for many TP firms to comply with in a short
timeframe and would also leave gaps in consumer protection. Therefore, we need to amend our Handbook to apply an appropriate regime to TP firms. This needs to take into account the need to balance consumer protection and the need to create a regime which firms can comply with from exit day to minimise disruption to consumers and the UK market. Further information can be found in the CBA in CP18/29.
However, in relation to FSCS cover for TP firms, the TPR Regulations provide that the
FSCS may only cover TP firms operating at the time the act or omission giving rise to the claim occurred from UK establishments as well as certain fund managers (whether or not they have a UK establishment) that already benefit from FSCS protection. Our rules may not, therefore, extend FSCS cover to most TP firms that will operate in the

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7. The CBA in CP18/29 addressed the rules which we were consulting on in that CP
relating to the TPR. This CBA analyses the costs and benefits of the rule changes which we are consulting on in this CP, specifically the changes we are proposing to the Handbook in relation to:

the APR and the SM&CR (both for TPR related rules and for “end state” rules referred
to in paragraph 3.7 onwards)
FSCS
the Financial Ombudsman Service
status disclosure
as against the baseline scenario described below.

All other proposals in this CP are proposed to be made using our delegated powers
under the EUWA, and therefore it is not necessary to carry out a CBA in respect to those rule changes or are proposed to be made under provisions of FSMA that do not require a CBA.48 Baseline
As explained in CP18/29, this CBA does not analyse the costs and benefits of the TPR
itself, which is established by the TPR Regulations rather than because of our proposed Handbook changes. Our duty is to analyse the costs and benefits of the changes to the Handbook rules on which we are consulting in this CP.
This CBA compares the overall position if the proposed rule amendments are applied
and the overall position if no changes were made to our Handbook for TP firms following exit day.49 Without the proposed rule changes, TP firms would be subject to the Handbook (in its post-Brexit form) as Part 4A firms with or (in the case of EEA services firms) without an establishment. Further information on the baseline scenario is included in the CBA of CP18/29. 48 A CBA is not required to accompany rules for the funding of the Financial Ombudsman Service made under section 234 of FSMA (see 138I(6). 49 The baseline, or the “appropriate comparison”, also reflects the new FSCS funding structure following the rules made in CP18/11 (Reviewing the funding of the Financial Services Compensation Scheme (FSCS)), which comes into effect on 1 April 2019.

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Brexit: Proposed changes to the Handbook and Binding Technical Standards – second consultation Senior Managers & Certification Regime (SM&CR) during temporary permission
11. We have proposed to maintain the current EEA branch regime under the APR and
SM&CR during the period in which firms have a temporary permission. This means that the additional requirements that apply to UK branches of third-country firms will only apply once a TP firm has been fully authorised as a third-country branch.
12. The SM&CR and APR do not currently apply to firms who only have a services passport.
We do not propose to change this.
13. Below we set out baseline assumptions used for the CBA and analyse the costs and
benefits of our proposals related to dual-regulated and solo-regulated firms. Baseline assumptions for the continued application of the EEA-branch regime during the TPR and application of the third-country regime after the branch has
Part 4A authorisation
14. The baseline scenario for EEA branches entering the TPR and then seeking Part 4A
authorisation differs depending on the type of business they undertake:

deposit-takers50 would need to meet the SM&CR requirements for third-country
branches following exit day
solo-regulated firms51 would need to meet the APR requirements for third-country
branches immediately following exit day, until 9 December 2019 when the SM&CR requirements for third-country branches would apply
Insurers52 would need to continue meeting the SM&CR requirements for EEA
branches.

Applying the third-country branch requirements to solo-regulated firms and deposittakers immediately following exit day will, we consider, not give these firms enough
time to comply with these rules, particularly:

obtaining FCA approval for individuals to perform additional FCA-approved functions
(APR and SM&CR)
drafting Statements of Responsibilities (SoRs) for the additional approved functions
(SM&CR)
allocating Prescribed Responsibilities for the first time (SM&CR)

As a result, under the baseline scenarios, the potential costs associated with these
elements could discourage firms from entering the TPR. We therefore propose that all EEA branches in the TPR remain subject to the requirements that currently apply to EEA branches. Once a branch receives Part 4A authorisation, we propose they will need to meet the third country requirements. This, we believe, will give firms sufficient time to prepare to comply with these rules. 50 Deposit-takers includes banks, building societies, credit unions and PRA-designated investment firms. 51 Solo-regulated firms includes all firms regulated by the FCA except deposit-takers and insurers (which are dual-regulated by the FCA and PRA). 52 A small minority of EEA insurers are exempt from the SM&CR requirements, including pure reinsurers. Under our proposals, we intend to maintain this exemption.

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17. A small minority of EEA branches are currently exempt from either the APR or SM&CR
requirements. As a result of the proposals included in this consultation, that exemption will continue to apply. Assessing the baseline costs of moving insurers from the EEA regime to the third country regime without the TPR
18. For insurers, as the baseline scenario would mean that they will continue to be subject
to the SM&CR EEA branch regime after exit day, these firms will benefit from facing delayed costs when applying the extra SM&CR requirements that apply to third country branches if, and when, they receive Part 4A authorisation.
19. In Chapters 4 and 5 of our final CBA53 on the extension of the SM&CR to solo-regulated
firms and insurers we set out several qualitative factors that we assessed to form a view of the costs and benefits of the regime. In our proposals in this CP we have looked to ensure the continuing validity of this assessment as far as possible. Dual-regulated firms (deposit-takers and insurers)
20. By exit day, all dual-regulated firms will be subject to the SM&CR. Our proposal to
maintain the SM&CR EEA branch regime (for deposit-takers) means that they may benefit from the delayed application of the extra SM&CR requirements that apply to third-country branches.
21. This benefit accrues for the period between exit day and the point at which the firm
is authorised as a third-country branch, when compared with the baseline scenario (having to apply the third-country branch regime immediately). This is because these firms would save the costs associated with implementing these requirements for this period. We would expect these costs savings to arise mainly from a reduction in the use of staff time on complying with various parts of the regime (as described in the CBA that accompanied PS18/15 – Extending the Senior Managers & Certification Regime: Cost-Benefit Analysis) but there may also be small reductions in training costs, record keeping costs or IT changes.
22. While there are no material costs to firms associated with these proposals, there may
be costs in the form of fewer regulatory protections and an associated reduction in our ability to mitigate potential harms. For example, not applying Prescribed Responsibilities could restrict our scope to take disciplinary action. The full benefits of the SM&CR may also not be realised immediately if the additional Senior Manager Functions and Handover Procedures are not applied. Not applying these parts of the SM&CR for this period may therefore create a cost when compared with the baseline scenario.
23. For insurers, as the baseline scenario would mean that they will continue to be subject
to the SM&CR EEA branch regime after exit day, these firms will benefit from facing delayed costs when applying the extra SM&CR requirements that apply to third country branches if, and when, they receive Part 4A authorisation.
24. In paragraphs 4.4, 6.2 and 6.7 of the CBA54 published alongside PS18/15 we explained
why it was not reasonably practicable to estimate the benefits from the SM&CR regime. The costs of applying the TPR are the delays to the benefits that immediately applying the third country regime at exit day. As we cannot estimate these benefits, 53 www.fca.org.uk/publication/research/cost-benefit-analysis.pdf 54 www.fca.org.uk/publication/research/cost-benefit-analysis.pdf

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25. Also in the CBA published alongside CP18/29 we have explained why it is not
reasonably practicable to produce a quantitative estimate of costs and benefits in relation to the rules applying to TP firms consulted on in that CP. In general, the same reasons equally apply to the proposals in this paper.
26. For TP firms:

We have designed the rules in this CP that apply to TP firms so that TP firms can
generally continue to comply with our rules with which they are already complying, rather than requiring firms to make significant changes or incremental changes that are too small to measure.
The TPR is only for a temporary period, and TP firms will need to come into
compliance with the full Handbook as it applies to third-country firms on UK authorisation in due course.
There is significant uncertainty about the number and type of EEA firms that will
decide to come into the TPR.

For insurers:

We believe it would not be reasonably practicable to estimate the potential costs or
benefits of our proposal to apply the third country requirements to EEA branches at exit day. This is because a pro forma analysis of the SM&CR extension CBA cannot be used to derive meaningful incremental cost or benefit estimates (as we cannot isolate them robustly) and we do not have time to conduct another CBA before we need to make the Handbook rules.

In addition, for all firms:

There is insufficient time in which to conduct the analysis and produce quantitative
estimates has by necessity been constrained by external dependencies, and the deadline for finalising this work is not moveable as we need to make the Handbook rules by early 2019. Solo-regulated firms

The SM&CR for solo-regulated firms begins on 9 December 2019. This means that,
on exit day, these firms will still be subject to the APR. The key difference between the APR EEA branch regime and the APR third-country branch regime is that fewer controlled functions apply to EEA branches (3) than third-country branches (10).
As we propose to maintain the APR and then SM&CR EEA branch regimes until TPR
firms are fully authorised as third-country branches, firms will benefit from the savings associated with these comparatively limited regimes for that period. We would expect similar types of cost saving as for deposit-takers.

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31. As with deposit-takers, there may also be costs, in the form of fewer regulatory
protections and an associated reduction in our ability to mitigate potential harms compared with the baseline approach.
32. We believe it is not reasonably practicable to estimate the potential costs or benefits
of the continued application of the SM&CR EEA branch regime to solo-regulated firms during the TPR or applying the third country requirements once a firm has received
Part 4A authorisation for the same reasons that are mentioned in Paragraph 25-28
above.
Financial Services Compensation Scheme (FSCS)
33. Currently, EEA firms with a UK branch passporting into the UK may choose to
be covered by the FSCS via a ‘top-up’ mechanism55 (in addition to their home compensation scheme if any). EEA services firms may also have FSCS cover via the top-up mechanism if they set up a branch, or automatically as a matter of course (which is the case with some fund managers).56 Customers of other EEA services firms that are not covered by FSCS may have access to home state compensation schemes.
34. Under the baseline referred to in paragraphs 9 and 10 above, FSCS protection under
our compensation rules is afforded to the customers of most types of Part 4A authorised firm and depending on the nature of their business.57 The FSCS generally covers only activities carried on from a UK establishment, with some exceptions.58 All TP firms will be treated as if they have permission under Part 4A of FSMA to carry on the relevant regulated activities in the UK on a temporary basis while in the TPR. Therefore, under the baseline scenario, only TP firms operating from UK establishments, plus some exceptions,59 would receive FSCS coverage and would be required to contribute to the costs of the FSCS (known as ‘levies’) as Part 4A firms following exit day.
35. The TPR Regulations provide that the FSCS is to cover UK branches during the TPR.
In addition, under the TPR Regulations, customers of firms in the TPR without a UK establishment will not have access to the FSCS, other than where there is existing (preexit) FSCS cover for such firms, that is, in respect of the activities of certain incoming fund managers. Further, FSCS levies may not be imposed on TP firms without a UK establishment, except those certain incoming fund managers without a UK branch to which FSCS cover is nevertheless to be extended during the TPR (as now). 55 As set out in COMP Chapter 14: www.handbook.fca.org.uk/handbook/COMP/14/?view=chapter 56 As set out in COMP 5.5.2R: www.handbook.fca.org.uk/handbook/COMP/5/?view=chapter 57 FSCS protection under the FCA rules extends to investment provision, investment intermediation, insurance intermediation, debt management and home finance intermediation. FSCS cover under the PRA rules (for claims in respect of deposits and insurance provision) will be addressed in the PRA’s consultation papers on the TPR. 58 The exceptions are: certain incoming fund managers’ activities have FSCS cover even where they are not carried out from a UK establishment; and the FSCS covers home finance mediation where the customer is a UK resident. Pre-exit, incoming home finance mediation firms have to set up a branch if they wish to elect to participate in the FSCS. 59 The exceptions are: certain incoming fund managers’ activities have FSCS cover even where they are not carried out from a UK establishment; and the FSCS covers home finance mediation where the customer is a UK resident. Pre-exit, incoming home finance mediation firms have to set up a branch if they wish to elect to participate in the FSCS.

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36. Therefore, our proposals are:

To provide customers of EEA firms in the TPR operating from UK establishments
with FSCS protection, equivalent to the cover provided to customers of UK firms. These firms will be required to contribute to the costs of the FSCS.
To continue providing FSCS cover in respect of the activities of certain incoming
fund managers (without an establishment) that are currently (pre-exit) covered by the FSCS. These firms will be required to contribute to the costs of the FSCS.
No FSCS cover for the customers of other EEA firms in the TPR operating in the UK
without a UK establishment, nor will these firms be required to pay FSCS levies. Costs of our proposals

In respect of EEA firms in the TPR operating from UK establishments, we estimate
that there will be no costs as against the baseline. This is because such firms would be covered by the FSCS, and be liable to pay FSCS levies, under our post-exit compensation rules in the baseline scenario.
In respect of certain incoming fund managers operating in the UK without an
establishment with existing (pre-exit) FSCS cover, we estimate there will be some costs as against the baseline. This is because all firms without an establishment in the UK would not be covered by FSCS60 and therefore would not be liable to pay FSCS levies under our post-exit compensation rules.
In respect of other EEA firms in the TPR operating in the UK without a UK
establishment, we estimate no additional costs to these firms as against the baseline. This is because we are unable to extend cover to their customers or to require the FSCS to impose levies upon them because of the legislative constraints within the TPR Regulations.61 However, as we highlighted in CP18/29, Brexit could result in customers of incoming EEA services firms (temporary) losing compensation scheme protection offered by home states, depending on the terms of the withdrawal.
We think it is unlikely that incoming EEA services firms with no FSCS cover will have a
competitive advantage to expand their business as a result of not paying FSCS levies. This is because the cost savings are not big enough and the temporary period is not long enough for firms to benefit from this advantage. Benefits of our proposals
In respect of certain incoming fund managers operating in the UK without an
establishment with existing (pre-exit) FSCS cover, we estimate that there will be a benefit to customers of these firms as they will be receiving compensation scheme protection as against the baseline position of no cover. Financial Ombudsman Service
Presently, certain activities of Part 4A firms and incoming EEA firms with a UK
establishment are covered by the Compulsory Jurisdiction (CJ) of the Financial 60 Unless they were home finance mediation firms dealing with UK residents; but the above-mentioned fund managers are not within this exception. 61 See subsections (4A) and (9A) to (9C) of section 213 of FSMA.

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43. The CJ does not generally cover EEA services firms. Currently, UK consumers of EEA
services firms should be able to refer complaints to alternative dispute resolution (ADR) schemes in other EEA member states if the firm that they are dealing with agrees to consider complaints under such schemes and has not signed up to join the voluntary jurisdiction (VJ) of the Financial Ombudsman Service.
44. We propose to include EEA services firms in the TPR in the CJ of the Financial
Ombudsman Service and to apply our complaints-handling rules to them. These firms will be required to pay case fees and annual fees because of being included in the CJ. Firms in the regime with a UK branch are already included in the CJ and this will continue as part of the regime. Costs of our proposals
45. In respect of all EEA firms with a UK branch, we estimate that there will be no costs
as the firms will be subject to the same requirements under the baseline and the proposals.
46. In respect of all EEA services firms, we estimate that there will be some
implementation costs associated with being included in the CJ and being required to apply our complaints-handling rules as against the baseline. We also estimate that there will be some costs for these firms in respect of the case fees and annual fees because of being included in the CJ. However, given these fees relate to the funding of the Financial Ombudsman Service and its operation in relation to the CJ, it is not necessary to carry out a CBA in respect of this rule change under the exemption in FSMA regarding the FOS funding.62 Benefits of our proposals
47. Including all EEA services firms in the CJ would ensure consumers of these firms will
not lose rights to refer complaints to an ADR scheme on exit. The proposal is intended to preserve consumer protection and access to redress and should also help to maintain consumer trust and confidence when dealing with EEA services firms in the TPR. If we do not amend our rules to include these firms in the CJ this could have an impact on a consumer’s decision to use EEA services firms in the TPR. If a consumer is unable to access an ADR scheme, progressing disputes through formal court processes could be lengthy and costly for both the firm and the consumer. Status disclosure
48. Currently EEA branches are required to disclose their authorisation status in their
letters and electronic communications (under GEN 4.3), unless they are subject to equivalent home state requirements whilst EEA services firms are only required to include a disclosure in communications (under GEN 4.4) where they indicate that they are an authorised person.
49. In the baseline scenario, TP firms with a UK branch would be required to comply with
the disclosure requirements which apply to any other firm with a Part 4A permission 62 See section 138I(6)(c) of FSMA

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50. Therefore, we believe that our proposals requiring a different disclosure from TP firms,
whilst involving a cost to them, does not represent an additional cost, or represents only minimal additional costs, to TP firms as against the baseline.
51. EEA services firms in the TPR would not however be required to comply with these
requirements in the baseline scenario, and only GEN 4.4 would continue to apply to them. Requiring a status disclosure in all circumstances from these firms therefore represents a cost as against the baseline scenario.
52. In CP 12/24,63 we estimated that, on the basis of certain assumptions, including taking
an average number of customers and an average number of relevant communications per year to each customer, the one-off costs for a firm of making the required changes to status disclosures at that time could range from less than £100 to no more than £2,500. If we adjust these estimates to take account of inflation, these numbers in 2018 are £108 to £2,700.64
53. However as explained elsewhere in this CBA and in the CBA in CP18/29, there is
significant uncertainty about the number and type of firms which will come into the TPR. It is possible that the size of TP firms will differ from the size of firms used to produce the estimate above. Therefore, this estimate might not accurately reflect the costs which a TP firm would incur. For the reasons explained in paragraph 26 above, we believe that it is not reasonably practicable to produce a more reflective estimate.
54. We believe that requiring appropriate status disclosure represents a benefit to
consumers of having the opportunity to understand the nature of the firm they are dealing with, and the protections which are available to them. This will allow consumers to factor the nature of a TP firm in to their decision about the extent and character of their relationship with a particular firm.
55. Taking into account the limited time available for the exercise and the wide range of
business potentially within the TPR, it is not reasonably practicable to produce an estimate of how many decisions might be influenced by this or reasonably practicable to quantify this benefit.
56. GEN 4.5 would continue to apply to EEA branches in the baseline scenario, but would
not apply to EEA services firms. We do not believe that applying the duties set out in that chapter to EEA services firms will involve more than a minimal cost for them, as it is a duty not to misrepresent their regulatory position, and their regulatory position will be readily known to the firm, rather than a positive duty to act which would incur a cost.
57. This represents a corresponding benefit to consumers of not being misled about
the firm’s position. We consider that in applying GEN 4.5 and making the appropriate comparison there will either be no costs or, to the extent there are new compliance costs, only minimal costs. 63 www.fsa.gov.uk/static/pubs/cp/cp12-24.pdf 64 www.gov.uk/government/statistics/gdp-deflators-at-market-prices-and-money-gdp-october-2018-budget-2018

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List of Statutory Instruments and policy notes 65 Statutory Instruments Alternative Investment Fund Managers (Amendment) (EU Exit) Regulations 2018 Collective Investment Schemes (Amendment) (EU Exit) Regulations 2018 Consumer Credit (Amendment) (EU Exit) Regulations 2018 Electronic Money, Payment Services and Payment Systems (Amendment and Transitional Provisions) (EU Exit) Regulations 2018 Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018 Money Laundering and Transfer of Funds (Information) (Amendment) (EU Exit) Regulations 2018 Payment Accounts (Amendment) (EU Exit) Regulations 2018 Packaged Retail and Insurance-based Investment Products (Amendment) (EU Exit) Regulations 2019 Solvency 2 and Insurance (Amendment) (EU Exit) Regulations 2018 The Bank Recovery and Resolution and Miscellaneous Provisions (Amendment) (EU Exit) Regulations 2018 The EEA Passport Rights (Amendment, etc., and Transitional Provisions) (EU Exit) Regulations 2018 The Insurance Distribution (Amendment) (EU Exit) Regulations 2018 The Long-term Investment Funds (Amendment) (EU Exit) Regulations 2018 The Capital Requirements (Amendment) (EU Exit) Regulations 2018 The Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc., and Transitional Provision (EU Exit) Regulations 2018 The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2018 65 Please also see annex 2 of CP18/28 for other relevant SI’s and policy notes

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List of relevant Binding Technical Standards List of BTSs consulted on in this CP where the FCA is the sole regulator EMIR

Annex A and B – please see FCA CP18/28
Commission Delegated Regulation (EU) 151/2013 of 19 December 2012
supplementing Regulation (EU) 648/2012 of the European Parliament and of the Council on OTC derivatives, central counterparties and trade repositories, with regard to regulatory technical standards specifying the data to be published and made available by trade repositories and operational standards for aggregating, comparing and accessing the data. TD (Modification)
Commission Delegated Regulation (EU) 2015/761 of 17 December 2014
supplementing Directive 2004/109/EC of the European Parliament and of the Council with regard to certain regulatory technical standards on major holdings. MAR
Commission Implementing Regulation (EU) 2016/347 of 10 March 2016 laying down
implementing technical standards with regard to the precise format of insider lists and for updating insider lists in accordance with Regulation (EU) No 596/2014 of the European Parliament and of the Council.
Commission Implementing Regulation (EU) 2016/523 of 10 March 2016 laying
down implementing technical standards with regard to the format and template for notification and public disclosure of managers’ transactions in accordance with Regulation (EU) No 596/2014 of the European Parliament and of the Council.
Commission Delegated Regulation (EU) 2016/908 of 26 February 2016
supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council laying down regulatory technical standards on the criteria, the procedure and the requirements for establishing an accepted market practice and the requirements for maintaining it, terminating it or modifying the conditions for its acceptance.
Commission Delegated Regulation (EU) 2016/909 of 1 March 2016 supplementing
Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the content of notifications to be submitted to competent authorities and the compilation, publication and maintenance of the list of notifications.
Commission Delegated Regulation (EU) 2016/957 of 9 March 2016 supplementing
Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the appropriate arrangements, systems

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Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing
Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest.
Commission Delegated Regulation (EU) 2016/960 of 17 May 2016 supplementing
Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the appropriate arrangements, systems and procedures for disclosing market participants conducting market soundings.
Commission Delegated Regulation (EU) 2016/1052 of 8 March 2016 supplementing
Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the conditions applicable to buy-back programmes and stabilisation measures.
Commission Implementing Regulation (EU) 2016/1055 of 29 June 2016 laying down
implementing technical standards with regard to the technical means for appropriate public disclosure of inside information and for delaying the public disclosure of inside information in accordance with Regulation (EU) No 596/2014 of the European Parliament and of the Council. MMFR
Commission Implementing Regulation (EU) 2018/708 of 17 April 2018 laying
down implementing technical standards with regard to the template to be used by managers of money market funds when reporting to competent authorities as stipulated by Article 37 of Regulation (EU) 2017/1131 of the European Parliament and of the Council. PAD
Commission Implementing Regulation (EU) 2018/33 of 28 September 2017
laying down implementing technical standards with regard to the standardised presentation format of the statement of fees and its common symbol according to Directive 2014/92/EU of the European Parliament and of the Council.
Commission Implementing Regulation (EU) 2018/34 of 28 September 2017
laying down implementing technical standards with regard to the standardised presentation format of the fee information document and its common symbol according to Directive 2014/92/EU of the European Parliament and of the Council. IDD
Commission Implementing Regulation (EU) 2017/1469 of 11 August 2017 laying
down a standardised presentation format for the insurance product information document. MiFIR
Commission Delegated Regulation (EU) 2017/587 of 14 July 2016 supplementing
Regulation (EU) No 600/2014 of the European Parliament and of the Council on markets in financial instruments with regard to regulatory technical standards on

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Commission Delegated Regulation (EU) 2017/588 of 14 July 2016 supplementing
Directive 2014/65/EU of the European Parliament and of the Council with regard to regulatory technical standards on the tick size regime for shares, depositary receipts and exchange-traded funds.
Commission Delegated Regulation (EU) 2017/577 of 13 June 2016 supplementing
Regulation (EU) No 600/2014 of the European Parliament and of the Council on markets in financial instruments with regard to regulatory technical standards on the volume cap mechanism and the provision of information for the purposes of transparency and other calculations. PD
Commission Delegated Regulation (EU) No 382/2014 of 7 March 2014
supplementing Directive 2003/71/EC of the European Parliament and of the Council with regard to regulatory technical standards for publication of supplements to the prospectus.
Commission Delegated Regulation (EU) 2016/301 of 30 November 2015
supplementing Directive 2003/71/EC of the European Parliament and of the Council with regard to regulatory technical standards for approval and publication of the prospectus and dissemination of advertisements and amending Commission Regulation (EC) No 809/2004. PSD
Commission Delegated Regulation (EU) 2017/2055 of 23 June 2017 supplementing
Directive (EU) 2015/2366 of the European Parliament and of the Council with regard to regulatory technical standards for the cooperation and exchange of information between competent authorities relating to the exercise of the right of establishment and the freedom to provide services of payment institutions. BMR
Commission Implementing Regulation (EU) 2018/1106 laying down implementing
technical standards with regard to templates for the compliance statement to be published and maintained by administrators of significant and non-significant benchmarks pursuant to Regulation (EU) 2016/1011 of the European Parliament and of the Council.
Commission Delegated Regulation (EU) 2018/1637 supplementing Regulation (EU)
2016/1011 of the European Parliament and of the Council with regard to regulatory technical standards for the procedures and characteristics of the oversight function.
Commission Delegated Regulation (EU) 2018/1638 supplementing Regulation (EU)
2016/1011 of the European Parliament and of the Council with regard to regulatory technical standards specifying further how to ensure that input data is appropriate and verifiable, and the internal oversight and verification procedures of a contributor that the administrator of a critical or significant benchmark has to ensure are in place where the input data is contributed from a front office function.

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Commission Delegated Regulation (EU) 2018/1641 supplementing Regulation
(EU) 2016/1011 of the European Parliament and of the Council with regard to regulatory technical standards specifying further the information to be provided by administrators of critical or significant benchmarks on the methodology used to determine the benchmark, the internal review and approval of the methodology and on the procedures for making material changes in the methodology.
Commission Delegated Regulation (EU) 2018/1639 supplementing Regulation (EU)
2016/1011 of the European Parliament and of the Council with regard to regulatory technical standards specifying further the elements of the code of conduct to be developed by administrators of benchmarks that are based on input data from contributors.
Commission Delegated Regulation (EU) 2018/1640 supplementing Regulation (EU)
2016/1011 of the European Parliament and of the Council with regard to regulatory technical standards specifying further the governance and control requirements for supervised contributors.
Commission Delegated Regulation (EU) 2018/1642 supplementing Regulation (EU)
2016/1011 of the European Parliament and of the Council with regard to regulatory technical standards specifying further the criteria to be taken into account by competent authorities when assessing whether administrators of significant benchmarks should apply certain requirements.
Commission Delegated Regulation (EU) 2018/1643 supplementing Regulation (EU)
2016/1011 of the European Parliament and of the Council with regard to regulatory technical standards specifying further the contents of, and cases where updates are required to, the benchmark statement to be published by the administrator of a benchmark.
Commission Delegated Regulation (EU) 2018/1644 supplementing Regulation
(EU) 2016/1011 of the European Parliament and of the Council with regard to regulatory technical standards determining the minimum content of cooperation arrangements with competent authorities of third countries whose legal framework and supervisory practices have been recognised as equivalent.
Commission Delegated Regulation (EU) 2018/1645 supplementing Regulation (EU)
2016/1011 of the European Parliament and of the Council with regard to regulatory technical standards for the form and content of the application for recognition with the competent authority of the Member State of reference and of the presentation of information in the notification to European Securities and Markets Authority (ESMA).
Commission Delegated Regulation (EU) 2018/1646 supplementing Regulation
(EU) 2016/1011 of the European Parliament and of the Council with regard to regulatory technical standards for the information to be provided in an application for authorisation and in an application for registration. ELTIF
Regulation 2018/480 supplementing Regulation (EU) 2015/760 of the European
Parliament and of the Council with regard to regulatory technical standards on financial derivative instruments solely serving hedging purposes, sufficient length of the life of the European long-term investment funds, assessment criteria for the

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Commission Delegated Regulation (EU) 2017/653 of 8 March 2017 supplementing
Regulation (EU) No 1286/2014 of the European Parliament and of the Council on key information documents for packaged retail and insurance-based investment products (PRIIPs) by laying down regulatory technical standards with regard to the presentation, content, review and revision of key information documents and the conditions for fulfilling the requirement to provide such documents. MiFID
Commission Delegated Regulation (EU) 2017/566 of 18 May 2016 Supplementing
Directive 2014/65/EU of the European Parliament and of the Council on Markets in Financial Instruments with regard to regulatory technical standards for the ratio of unexecuted orders to transactions in order to prevent disorderly trading conditions. EuSEF (Revocation)
The FCA revokes Commission Implementing Regulation (EU) 594/2014 of 3 June
2014 laying down implementing technical standards with regard to the format of the notification according to Article 17(1) of Regulation (EU) 346/2013 of the European Parliament and of the Council on European social entrepreneurship funds. EuVECA (Revocation)
The FCA revokes Commission Implementing Regulation (EU) 593/2014 of 3 June
2014 laying down implementing technical standards with regard to the format of the notification according to Article 16(1) of Regulation (EU) 345/2013 of the European Parliament and of the Council on European venture capital funds. TD (Revocation)
Commission Delegated Regulation (EU) 2016/1437 of 19 May 2016 supplementing
Directive 2004/109/EC of the European Parliament and of the Council with regard to regulatory technical standards on access to regulated information at Union level. List of BTSs that are shared with the Bank of England or the PRA, where the FCA is the lead authority EMIR
Commission Delegated Regulation (EU) No 148/2013 of 19 December 2012
supplementing Regulation (EU) No 648/2012 of the European Parliament and of the Council on OTC derivatives, central counterparties and trade repositories with regard to regulatory technical standards on the minimum details of the data to be reported to trade repositories.
Commission Delegated Regulation (EU) No 149/2013 of 19 December 2012
supplementing Regulation (EU) No 648/2012 of the European Parliament and of the Council with regard to regulatory technical standards on indirect clearing arrangements, the clearing obligation, the public register, access to a trading venue, non-financial counterparties, and risk mitigation techniques for OTC derivatives contracts not cleared by a CCP.

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Commission Implementing Regulation (EU) No 1247/2012 of 19 December 2012
laying down implementing technical standards with regard to the format and frequency of trade reports to trade repositories according to Regulation (EU) No 648/2012 of the European Parliament and of the Council on OTC derivatives, central counterparties and trade repositories.

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Annex 5
Compatibility Statement
This annex records the FCA’s compliance with legislation relevant to the proposals in this consultation. The Financial Regulators’ Powers (Technical Standards etc.) (Amendment etc.) (EU Exit) Regulations 2018 In relation to changes that we propose to make using the delegated powers under this SI, the FCA considers that the changes in this CP are appropriate to prevent, remedy or mitigate any failure of the relevant FCA Handbook provisions or BTS to operate effectively, or any other deficiency in the relevant FCA Handbook provisions or BTS, arising from the withdrawal of the United Kingdom from the EU. The proposals proposed under these powers do not impose or increase taxation or fees; make retrospective provision; create a criminal offence which is capable of leading to imprisonment of more than two years; establish a public authority; implement the Article 50 Withdrawal Agreement; result in the transfer of a function of an EU authority to a UK authority; confer any power to legislate by means of orders, rules, regulations or any other subordinate instrument; or amend any legislation other than the relevant FCA Handbook provisions and BTS. The Financial Services and Markets Act 2000 (FSMA) In relation to the additional changes that we propose to make to elements of the Senior Managers and Certification Regime, the FCA is required by section 138I(2)(d) FSMA to include an explanation of why it believes making the proposed rules is:
a. compatible with its general duty, under s. 1B(1) FSMA, so far as reasonably possible, to act in a way which is compatible with its strategic objective and advances one or more of its operational objectives, and b. its general duty under s. 1B(5)(a) FSMA to have regard to the regulatory principles in s. 3B FSMA. The FCA is also required by s. 138K(2) FSMA to state its opinion on whether the proposed rules will have a significantly different impact on mutual societies as opposed to other authorised persons. The UK’s exit from the EU changes the supervisory relationship with EEA branches and removes the reasons for the difference in treatment between EEA and third country branches. The reasons for the additional elements of the SM&CR for third country branches (e.g. additional Senior Management Functions) will now apply equally to branches of EEA firms.

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Brexit: Proposed changes to the Handbook and Binding Technical Standards – second consultation The TPR provides time for TP firms to adjust to these additional requirements. Firms should read the compatibility statement for the Temporary Permissions Regime set out in CP18/29 for more information. Our proposals comply with the FCA’s duty (so far as compatible with acting in a way which advances the consumer protection or integrity objectives) to discharge its general functions in a way that promotes effective competition in the interests of consumers. We have considered competition in relevant markets and our proposals intend to maximise competition by ensuring that firms that wish to remain in the market can do so in the most effective way possible. We do not believe that these proposals will have a significantly different impact on mutual societies as opposed to other authorised persons. Equality and diversity Under the Equality Act 2010 (the Act), in exercising our functions we must ‘have due regard’ to the need to eliminate discrimination, harassment, victimisation and any other conduct prohibited by or under the Act, advance equality of opportunity between persons who share a relevant protected characteristic and those who do not, and to foster good relations between people who share a protected characteristic and those who do not. As explained in section 1, the cross-cutting and majority of sector-specific technical changes proposed in chapters 2, 3 and 5 have not involved a choice being made on our
part.
By contrast, some of the other changes proposed do involve a choice being made. Overall, we do not think that the proposals in this CP result in discrimination for the purposes of the Equality Act 2010. But we will continue to consider the equality and diversity implications of the proposals during the consultation period, and will revisit them when publishing the final rules. In the meantime, we welcome your comments on any equality and diversity considerations you believe may arise. Where individual products or services are directly affected, we recognise that the impact of our overall proposals for our Handbook may be particularly challenging for vulnerable consumers to understand. Legislative and Regulatory Reform Act Under the LRRA, we must have regard to the principles in the LRRA and to the Regulator’ Compliance Code when determining general policies and principles and giving general guidance (but this duty does not apply to regulatory functions exercisable through our rules). We have had regard to the principles in the LRRA for the parts of the proposals that consist of general policies, principles or guidance. We believe that our proposals will be effective in helping firms and others subject to Handbook requirements understand

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The government’s economic policy – ‘continuing to strengthen the financial system,
improving the regulatory framework to reduce risks to the taxpayer and building resilience, so that it can provide finance and financial services to the real economy and realise better outcomes for consumers, supporting sustainable economic growth and encouraging productive investment.’
Matters about aspects of the government’s economic policy that relate to ‘Growth’,
‘Better outcome for consumers’ and ‘Competition’.
Our proposals are intended to ensure minimum disruption to markets, consumers and firms that rely on the participation of EEA firms in UK markets. This should contribute to greater sustainability in UK financial services markets and in the UK economy as a result, ensuring better outcomes for consumers. Our proposals are also intended to preserve the effect of the SM&CR rules and ensure that the objectives and regulatory principles set out in paragraphs 10 to 22 of the compatibility statements in Annex 3 of CP17/25 and CP17/26 remain. These include:
The desirability of sustainable growth in the UK economy in the medium or long term
The desirability of recognising differences in the nature and objectives of business
carried out by different persons, including mutual societies and other kinds of business organisations
Our duty, as required by s. 1B(5)(b) FSMA, to have regard to the importance of taking
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Annex 5
Financial Conduct Authority
Brexit: Proposed changes to the Handbook and Binding Technical Standards – second consultation Proposals relating to the Temporary Permissions Regime In CP18/29, we included a Compatibility Statement recording our compliance with legal requirements66 applicable to our proposals for the TPR. That Compatibility Statement took into account proposals which are included in this CP (the intended approach was set out in paragraphs 4.62 to 4.105 in CP18/29 and they were referred to in the Statement for example in paragraphs 11 and 24 of Annex 3). We consider that the Compatibility Statement in CP18/29 equally applies to the proposals in this CP. In addition to the information included in that CP, the proposed changes relating to the funding of the FSCS are designed to ensure that the scheme remains sufficiently funded as a result of extending cover to EEA firms in the TPR operating from UK establishments. We have considered this in accordance with our obligations under
section 213(5) of FSMA.
66 Including an explanation of our reasons for concluding that the proposals are compatible with certain requirements under the Financial Services and Markets Act 2000 (FSMA).

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Brexit: Proposed changes to the Handbook and Binding Technical Standards – second consultation
Annex 6
Abbreviations in this document
AIFM Alternative Investment Fund Managers AIFMD Alternative Investment Fund Managers Directive AIFs Alternative Investment Funds APER Statements of Principle and Code of Practice for Approved Persons APR Approved Persons Regime BCOBS Banking Conduct of Business Sourcebook BENCH General guidance on Benchmark Submission and Administration BIPRU Prudential Sourcebook for Banks, Building Societies and Investment Firms BMR Benchmark Regulations BRRD The Bank Recovery and Resolution Directive BST British Summer Time BTS Binding Technical Standards CASS Client Assets Sourcebook CBA Cost Benefit Analysis CCP Central Counterparty CMID Consolidated Motor Insurance Directive COBS Conduct of Business Sourcebook COCON Code of Conduct Sourcebook COLL Collective Investment Schemes Sourcebook COMP Compensation Sourcebook CONC Consumer Credit COND Threshold Conditions

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Financial Conduct Authority
Brexit: Proposed changes to the Handbook and Binding Technical Standards – second consultation CONRED Consumer Redress Schemes Sourcebook CP Consultation Paper CRAs Credit Rating Agencies CRAR Credit Rating Agencies Regulation CRD Capital Requirements Directive CREDS Credit Unions Sourcebook CRR Capital Requirements Regulation DEPP Decision Procedure and Penalties Manual DfT Department for Transport DISP Disputes Resolution Sourcebook DMD Distance Marketing Directive DTR Disclosure Guidance and Transparency Rules EBA European Banking Authority ECA Electronic Commerce Activity ECD E-Commerce Directive EEA European Economic Area EG Enforcement Guide ELTIF European Long-Term Investment Fund EMIR European Markets and Infrastructure Regulation EMPS Energy Market Participants Guide ESAs European Supervisory Authorities ESMA European Securities and Markets Authority EU European Union EuSEF European Social Entrepreneurship Fund EuVECA European Venture Capital Fund

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Financial Conduct Authority
Brexit: Proposed changes to the Handbook and Binding Technical Standards – second consultation EUWA European Union Withdrawal Act FEES FEES Manual FCA Financial Conduct Authority FICOD Financial Conglomerates Directive FINMAR Financial Stability and Market Confidence FIT Fit and Proper Test for Approved Persons FSCS Financial Services Compensation Scheme FSMA Financial Services and Markets Act 2000 FUND Investment Funds Sourcebook GEN General Provisions GENPRU General Prudential sourcebook GMT Greenwich Meridian Time ICOBS Insurance: Conduct of Business Sourcebook ICSD Investor Compensation Scheme Directive IDD Insurance Distribution Directive IFPRU Prudential sourcebook for Investment Firms ILS Insurance-Linked Securities IPRU-INV Interim Prudential sourcebook for Investment Businesses IPID Insurance Product Information Document ISPV Insurance Special Purpose Vehicles KID Key Information Document LR Listing Rules LRRA Legislative and Regulatory Reform Act MAR Market Conduct sourcebook MCOB Mortgages and Home Finance Conduct of Business Sourcebook

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Financial Conduct Authority
Brexit: Proposed changes to the Handbook and Binding Technical Standards – second consultation MIB Motor Insurance Bureau MiFID Markets in Financial Instruments Directive MIFIR Markets in Financial Instruments Regulation MIIC Motor Insurers Information Centre MIPRU Prudential sourcebook for Mortgage and Home Finance Firms, and Insurance Intermediaries MLRO Money Laundering Reporting Officer MTF Multilateral Trading Facility OTC Over-the-counter Derivatives PAD Payment Accounts Directive PERG The Perimeter Guidance Manual PR Prospectus Rules PR Prescribed Responsibilities PRA Prudential Regulation Authority PRIIPS Packaged Retail and Insurance-based Investment Products Regulation PRIN Principles for Business Sourcebook PROD Product Intervention and Product Guidance Sourcebook PROF Professional Firms PSR Payment Systems Regulator RAO Regulated Activities Order RCB Regulated Covered Bonds REC Recognised Investment Exchanges RTS Regulatory Technical Standards SIs Statutory Instruments SM&CR Senior Managers and Certification Regime SMF Senior Manager Functions

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Financial Conduct Authority
Brexit: Proposed changes to the Handbook and Binding Technical Standards – second consultation SUP Supervision Sourcebook SYSC Systems and Controls Sourcebook TC Training and Competence Sourcebook TP Transitional Provisions TPR Temporary Permissions Regime TR Trade Repositories UCITS Undertakings for Collective Investment in Transferable Securities UK United Kingdom UNFCOG The Unfair Contract Terms and Consumer Notices Regulatory Guide USA United States of America WDPG Wind-down Planning Guide We have developed the policy in this Consultation Paper in the context of the existing UK and EU regulatory framework. The Government has made clear that it will continue to implement and apply EU law until the UK has left the EU. We will keep the proposals under review to assess whether any amendments may be required in the event of changes in the UK regulatory framework in the future. We make all responses to formal consultation available for public inspection unless the respondent requests otherwise. We will not regard a standard confidentiality statement in an email message as a request for non-disclosure. Despite this, we may be asked to disclose a confidential response under the Freedom of Information Act 2000. We may consult you if we receive such a request. Any decision we make not to disclose the response is reviewable by the Information Commissioner and the Information Rights Tribunal. All our publications are available to download from www.fca.org.uk. If you would like to receive this paper in an alternative format, please call 020 7066 9644 or email: publications_graphics@fca.org. uk or write to: Editorial and Digital team, Financial Conduct Authority, 12 Endeavour Square, London E20 1JN

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Appendix 1
Financial Conduct Authority
Brexit: Proposed changes to the Handbook and Binding Technical Standards – second consultation
Appendix 1
Draft Guidance – our approach to non‑Handbook guidance where it relates to EU‑law or EU‑derived law The purpose of this guidance

This document sets out our approach to existing non-Handbook guidance where it
relates to EU law or EU-derived law.
It is concerned with non-Handbook guidance issued before exit day.
The guidance in this document is relevant to consumers, firms, financial institutions,
issuers and other market participants operating, or intending to operate, in the United Kingdom. What is non-Handbook guidance?
Non-Handbook guidance is guidance published outside of the Handbook.
It may include technical notes, case studies and ‘Dear CEO’ letters. Specific examples
of non-Handbook guidance include the ‘Payment Services and Electronic Money – Our Approach’67 guidance and the procedural and technical notes within the UK Listing Authority’s knowledge base.68 What is happening to non-Handbook guidance that relates to EU law or EU-derived law after Brexit?
We are not, in general, amending existing non-Handbook guidance relating to EU law or
EU-derived law.
It will continue to be relevant to take this guidance into account in relation to matters
that occur before exit day.
It will also continue to be relevant, and should be taken into account, in relation to
matters arising on or after exit day where the EU or EU-derived provisions to which it relates become or remain UK law.
In many cases, such provisions will have been amended to address deficiencies arising
from the UK’s withdrawal from the EU. Non-Handbook guidance issued before exit day will not, in general, be amended to take these changes into account.
Instead, until stated otherwise, we expect firms to interpret such guidance in line with
the approach set out below.
67 www.fca.org.uk/publication/finalised-guidance/fca-approach-payment-services-electronic-money-2017.pdf 68 www.fca.org.uk/markets/ukla/knowledge-base

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Appendix 1
Financial Conduct Authority
Brexit: Proposed changes to the Handbook and Binding Technical Standards – second consultation How to interpret non-Handbook guidance after Brexit where it relates to EU or EU derived law and matters arising after exit day
11. We expect firms and other market participants to sensibly and purposively interpret
pre-exit non-Handbook guidance in light of the provisions of the European Union (Withdrawal) Act 2018 (EUWA) and any changes to the underlying provision as it is preserved or converted into UK law.
12. We expect references to EU or EU-derived law in non-Handbook guidance to be read in
a way that takes into account the following:

the UK is no longer part of the EU;
EU regulations and EU decisions will no longer directly apply but may have been
converted into UK law;
passporting of financial services will end;
the purpose of the EUWA is to provide a functioning legal system in the UK, and, as
a general rule, ensure that the same rules and laws will apply on the day after exit day as on the day before, subject to amendments made to prevent, mitigate or remedy deficiencies.

For example, unless the context requires otherwise, where existing non-Handbook
guidance refers to:

a provision in EU law that has been converted into national law, we expect it to be
read as a reference to the post-exit national law provision;
an EU body or EU process, we expect it to be read as a reference to the UK body to
which the relevant functions have been transferred or to the equivalent UK process (if any);
all or part of an EU or EU-derived provision that has been deleted, we expect this
guidance to be read excluding this aspect (and any consequential statements).

Non-Handbook guidance will apply to firms in the temporary permissions regime
in accordance with GEN 2.2.35R (Guidance applying while a firm has temporary permission). In most cases it should be clear when non-Handbook guidance remains relevant to a temporary permissions firm.

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Appendix 2
Financial Conduct Authority
Brexit: Proposed changes to the Handbook and Binding Technical Standards – second consultation
Appendix 2
Draft Guidance – our approach to Forms

Draft Guidance – our interpretive guide on completing Handbook forms after the UK’s withdrawal from the EU The purpose of this guide

This guide sets out the approach the FCA expects users of FCA Handbook forms
to take when interpreting EU-based references found in forms after the UK’s withdrawal from the European Union (EU). This guide covers references in Handbook forms and the accompanying guidance on how to complete them.
The guide does not set out the approach to take for users of CRR BTS forms and
non-Handbook forms (hosted on the FCA website). We will be publishing interpretative guidance for non-Handbook forms before exit day but we expect the guidance on those forms to be similar to these changes. Our approach to the CRR BTS forms is that these forms will not be changed for exit day and should be read in line with FCA interpretative guidance, to be published in due course. The FCA’s guidance will reflect corresponding guidance produced by the PRA for dual-regulated firms.
It should also be noted that for Temporary Permission (TP) firms, some
references within our Handbook forms to passporting firms (and related concepts) may still be relevant to firms within the Temporary Permissions Regime (TPR). For example, although there will not be “incoming EEA firms” after the UK’s withdrawal from the EU there will be TP firms which used to be incoming EEA firms or incoming Treaty firms (some of whom may still be operating without a UK branch). TP firms should consider whether EU-based references remain applicable to them. For more information on the TPR, please see our October Consultation Paper.1 The content of this guide
Table 1 sets out a default approach for interpreting EU-based references found
in our Handbook forms. This is in line with the approach taken more widely in the FCA Handbook to take account of the UK’s withdrawal from the EU and the associated legislative changes made. This reference list is not exhaustive, and users of the forms and accompanying guidance must continue to read the relevant form in the context of the corresponding overarching Handbook rule or direction for exit day.
Table 2 sets out more specific cases, and sets out an expected approach in each
instance. The specific case guidance takes priority over table 1.
We expect users of Handbook forms and accompanying guidance to use this
interpretive guide in light of the UK’s withdrawal from the EU and the associated legislative changes. This includes the rules and directions in the FCA Handbook and our published policy approach. There may be circumstances where it is appropriate to use the pre-exit day EU-based reference.

1 CP18/29 ‘Temporary permissions regime for inbound firms and funds’ (October 2018) https://www.fca.org.uk/publication/consultation/cp18-29.pdf

This guidance should also be read in conjunction with the Prudential Regulation
Authority’s (PRA’s) Supervisory Statement on interpreting reporting and disclosure requirements2 , where relevant for shared forms. Where appropriate, our approach to Handbook forms is the same as the PRA’s. General guidance
Table 1
This table sets out the various types of EU-based references, and a default approach to how these should be interpreted. Type of reference Default interpretation Reference to UK primary or secondary legislation This should be read as a reference to UK legislation as amended under the European Union (Withdrawal) Act 2018 (EUWA). Reference to an EU regulation This should be read as a reference to the UK version of the EU regulation which is part of UK law by virtue of the EUWA. Reference to an EU technical standard This should be read as a reference to the UK version of the EU technical standard, as amended. Reference to an EU directive This should generally be read as a reference to the implementing UK legislation (including FCA or PRA rules), or the UK, FCA or PRA processes, that give effect to the directive, as amended on EU withdrawal. In some cases it may also be helpful to refer to the text of the EU directive as at exit day, to provide additional context. Reference to the ESA guidelines and recommendations and other non-legislative material See Guidance on our approach to EU non-legislative materials [URL to be inserted once finalised – the guidance is being consulted on as part of our October CP3 ] Stand-alone reference to the European Union or EU; or the European Economic Area or EEA (i.e. not in relation to, for example, an ‘EEA firm’ etc) This should be read as a reference to the UK subject to the context and the EU withdrawal legislative changes (which include the FCA Handbook).

2 Please see pages 35 to 40 in the current consultation document produced by the PRA - https://www.bankofengland.co.uk/-/media/boe/files/prudential-regulation/consultation-paper/2018/cp2618- complete.pdf 3 CP18/28 ‘Brexit: proposed changes to the Handbook and Binding Technical Standards – first consultation’ (October 2018) https://www.fca.org.uk/publication/consultation/cp18-28.pdf

Reference to Member State,
Member States or home
Member State
This should be read as a reference to the UK, subject to the context and the EU withdrawal legislative changes (which include the FCA Handbook). Reference to third country This should be read as a reference to a territory or country which is not the United Kingdom Reference to an EEA bank These should be read as references to a UK bank or a non-UK bank depending on the context and the EU withdrawal legislative changes. Reference to an EEA firm This should be read as a reference to a third-country firm depending on the context and the EU withdrawal legislative changes (which include the FCA Handbook). References to EEA other than the UK This should be read as a reference to EEA states. Reference to EEA notifications This should be read as if deleted as there is no longer a requirement to submit them, subject to the context and the EU withdrawal legislative changes (which include the FCA Handbook). References to an EEA regulator and EEA branch These should be read as if they are deleted, subject to the context and the EU withdrawal legislative changes (which include the FCA Handbook). Stand-alone reference to the European Union (i.e. not in relation to legislation) This should be read as a reference to the UK. Reference to Euros Any threshold set in Euros will continue to apply as such. This is subject to the EU withdrawal legislative changes (which include the FCA Handbook). References to an incoming EEA firm or to an incoming Treaty firm These should be read as if they are deleted as there will be no firms passporting into the UK after exit day. However it should be noted that for TP firms, some references within our Handbook forms to passporting firms (and related concepts) may still be relevant to firms within the Temporary Permissions Regime (TPR). References to the official language or languages of the EEA State These should be read as ‘the official languages of the United Kingdom’. This is subject to the EU withdrawal legislative changes (which include the FCA Handbook).

Reference to freedom to provide services
On the basis that UK firms will no longer be able to write business under the Freedom to Provide Services in the EU after exit:

any data relating to business performed
through freedom to provide service will be a nil entry after EU withdrawal, and
any references to the country where the
freedom to provide services notification was made for the purpose of identifying the location where a contract is entered into should be disregarded. Guidance on specific legislation and cases
Table 2
This table sets out guidance on how to approach specific cases. Handbook form or accompanying guidance location Form title Reference Interpretation SUP 10A Annex 10D MiFID Article 4 APER Information Form MiFID II requires certain information to be provided by the applicant firm when making changes to their management body or key function holders and currently refers to European technical standards. The information required is detailed in the MiFID II UK version of Regulatory Technical Standards (RTS) Implementing Technical Standards (ITS) which are part of UK law by virtue of the EUWA. SUP 16 Annex 42AR (and guidance notes in SUP 16
Annex 42BG)
REP-CRIM –
Financial Crime
Report
Non-EEA
Correspondent
Banks
Question 5 of the return requires firms to report the number of ‘non-EEA Correspondent Banks’ at the end of the reporting period and the number new in the same period. these references to ‘correspondent banks’ should be taken to mean any

relationship outside of the UK.
SUP 16 Annex
19B in relation to form at SUP
16 Annex 19AR
Notes for completion of the
Mortgage Lenders &
Administrators
Return (‘MLAR’)
Land in the EEA References to land in the EEA for the purpose of SUP 16
Annex 19B should be
taken to mean ‘land in the UK’.
GENPRU 3
Annex 3G
Classification of groups (GENPRU
3.1.3G)
EU non-regulated country of location
As in all instances of this term ‘EU’ will become ‘UK’ there is no longer a need to specify the country of location. This means that ‘country of location’ should be ignored, as if it was deleted. GENPRU 3
Annex 3G
Classification of
Groups
Financial
Conglomerate definition
The definition of
'financial conglomerate' refers to article 2(14) of FICOD, is amended in the UK Financial Groups Directive Regulations with the geographical scope changed from EEA to UK. MAR 9 Annex 7D in relation to MAR 9.3.6D and guidance at SUP 17A.2.1BG MAR 9 Annex 7 FCA MDP on-boarding application form
Section 3 Non-UK,
EEA authorised applicant entities
Delete this section.
MAR 9 Annex
7D in relation to MAR 9.3.6D and guidance at SUP 17A.2.1BG MAR 9 Annex 7 FCA MDP on-boarding application form
Section 4 Data
types, 4.1 (see note)
The references to non-MiFID firms should be read to mean non-UK investment firms, excluding UK branches. MAR 9 Annex 7D in relation to MAR 9.3.6D and guidance at SUP 17A.2.1BG MAR 9 Annex 7 FCA MDP on-boarding application form
Section 6 Fees
(2nd paragraph)
Delete the sentence
‘An incoming DRSP, authorised in another
EU member state, would pay 80% of each charge.’

MAR 9 Annex
5D in relation to MAR 9.3.1R
Data Reporting
Services Provider
(DRSP) Material
Change in information
EEA References to the term ‘EEA’ should be read to mean EEA, and the general guidance with respect to the term ‘EEA’ in Table 1 does not apply. MAR 9 Annex 3D in relation to MAR 9.2.3D and MAR 9.2.4G Data Reporting Services Provider (DRSP) Variation of Authorisation EEA References to the term ‘EEA’ should be read to mean ‘nonUK’, and the general guidance with respect to the term ‘EEA’ in Table 1 does not apply. MAR 9 Annex 4D in relation to MAR 9.2.5D Data Reporting Services Provider (DRSP) Cancellation of authorisation EEA References to the term ‘EEA’ should be read to mean ‘nonUK’, and the general guidance with respect to the term ‘EEA’ in Table 1 does not apply.

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Appendix 3
Financial Conduct Authority
Brexit: Proposed changes to the Handbook and Binding Technical Standards – second consultation
Appendix 3
Draft Handbook Text

FCA 201X/XX
EXITING THE EUROPEAN UNION: GLOSSARY (AMENDMENTS) INSTRUMENT 201[X] Powers exercised A. The Financial Conduct Authority makes this instrument in the exercise of:
(1) regulation 3 of the Financial Regulators’ Powers (Technical Standards) (Amendment etc.) (EU Exit) Regulations 2018; (2) section 137A (the FCA’s general rules) of the Financial Services and Markets Act 2000; and (3) section 139A (Power of the FCA to give guidance) of the Financial Services and Markets Act 2000. Commencement B. Part 1 of this instrument comes into force on 29 March 2019 at 11 p.m. and Part 2 comes into force on 9 December 2019. Amendments to the Handbook
C. The Glossary of definitions is amended in accordance with the Annex to this
instrument.
D. The Financial Conduct Authority confirms and remakes in the Glossary of definitions the defined expressions relating to any UK legislation which has been amended further to section 8 of the European Union (Withdrawal) Act 2018. Citation E. This instrument may be cited as the Exiting the European Union: Glossary (Amendments) Instrument 201[X]. By order of the Board [date]

FCA 201X/XX

from the UK’s withdrawal from the EU. We will set out our approach in due course for any additional amendments which are required to these provisions as a result of the publication of further statutory instruments. (2) The text in this instrument may also need to be amended at the time of the final instrument if there are further changes to the content of the statutory instruments set out in Annex 3 of the consultation paper. (3) The amendments in this instrument are based on the text of the Handbook in force on 1 October 2018, and as amended by the proposed near final rules set out in PS18/15 (‘Extending the Senior Managers & Certification Regime to insurers – Feedback to CP17/26 and CP17/41 and near-final rules). These proposed rules come into force on 10 December 2018. (4) If additional amendments are made to the relevant Handbook text before exit day, we will consider whether these give rise to further deficiencies or have a material impact on the proposed amendments set out in this instrument. Unless this is the case, we intend to

FCA 201X/XX
Part 1: Comes into force on 29 March 2019 at 11p.m.
Insert the following new definitions in the appropriate alphabetical position. The text is not underlined.
Annex 1 activities has the meaning in article 4(1)(26A) of the UK CRR.
Capital
Requirements
Regulations 2013 the Capital Requirements Regulations 2013 (SI 2013/3115). credit rating agency (as defined in Article 3(1)(b) of the CRA Regulation) means a legal person whose occupation includes the issuing of credit ratings on a professional basis. CRA Regulation means the UK version of Regulation (EC) No 1060/2009 of the European Parliament and of the Council of 16 September 2009 on credit rating agencies (as amended by Regulation (EU) No 513/2011 of the European Parliament and of the Council of 11 May 2011 amending Regulation (EC) No 1060/2009 on credit rating agencies and Regulation (EU) No 462/2013 of the European Parliament and of the Council of 21 May 2013 amending Regulation (EC) No 1060/2009 on credit rating agencies) which is part of UK law by virtue of the EUWA. CRR ITS on supervisory reporting the UK version of Regulation (EU) 2015/1278 of 9 July 2015 amending Implementing Regulation (EU) No 680/2014 laying down implementing technical standards with regard to supervisory reporting of institutions as regards instructions, templates and definitions which is part of UK law by virtue of the EUWA. CRD ITS on templates, definitions and ITsolutions the UK version of Regulation (EU) 2016/2070 of 14 September 2016 laying down implementing technical standards for templates, definitions and IT-solutions to be used by institutions when reporting in accordance with Article 78(2) of the CRD which is part of UK law by virtue of the EUWA. CRD RTS on the identification of the geographical location of credit exposures for calculating institution-specific countercyclical capital buffer rates the UK version of Regulation (EU) No 1152/2014 of 4 June 2014 supplementing Directive 2013/36/EU of the European Parliament and of the Council with regard to regulatory technical standards on the identification of the geographical location of the relevant credit exposures for calculating institution-specific countercyclical capital buffer rates which is part of UK law by virtue of the EUWA. EU auction regulation Commission Regulation (EU) No 1031/2010 of 12 November 2010 on the timing, administration and other aspects of auctioning of greenhouse gas emission allowances pursuant to Directive 2003/87/EC of the European Parliament and of the Council establishing a scheme

FCA 201X/XX for greenhouse gas emission allowances trading within the Community). EU benchmarks regulation Regulation (EU) No. 2016/1011 of the European Parliament and of the Council of 8 June 2016 on indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds and amending Directives 2008/48/EC and 2014/17/EU and Regulation (EU) No 596/2014. EU CRR the EU version of Regulation of the European Parliament and the Council on prudential requirements for credit institutions and investment firms (Regulation (EU) No 575/2013) and amending Regulation (EU) No 648/2012. EU EMIR Regulation (EU) No 648/2012 on OTC derivatives, central counterparties and trade repositories. EEA State compensation scheme a compensation scheme, akin to the FSCS, in an EEA State. EU MiFIR Regulation (EU) No. 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Regulation (EU) No 648/2012. EU OTF (as defined in Article 2(1)(15B) of MiFIR) means a multilateral system:
(a) which is not a regulated market or an MTF; (b) in which multiple third-party buying and selling interests in bonds, structured finance products, emission allowances or derivatives are able to interact in the system in a way that results in a contract in accordance with Title II of Directive 2014/65/EU of the European Parliament and of the Council on markets in financial instruments directive of 15 May 2014. EU regulated market (as defined in Article 2(1)(13B) of MiFIR) means a regulated market which is authorised and functions regularly and in accordance with Title III of Directive 2014/65/EU of the European Parliament and of the Council on markets in financial instruments directive of 15 May 2014. EU Securities Financing Transactions Regulation the EU version of Regulation (EU) 2015/2365 of the European Parliament and of the Council of 25 November 2015 on transparency of securities financing transactions and of reuse and amending Regulation (EU) No 648/2012. EUWA the European Union (Withdrawal) Act 2018.

FCA 201X/XX exit day as defined in section 20(1) of the EUWA, means 29 March 2019 at 11 p.m. or such date as is specified further to section 20(2) to (5)). General data protection regulation the UK version of the Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation), which is part of UK law by virtue of the EUWA. IAS Regulation the UK version of EC Regulation No. 1606/2002 of the European Parliament and of the Council of 19 July 2002 on the application of international accounting standards, which is part of UK law by virtue of the EUWA. Insolvency Proceedings Regulation the UK version of Regulation (EC) No.1346/2000 on 29 May 2000 on insolvency proceedings, which is part of UK law by virtue of the EUWA. LTIF a long-term investment fund (as defined in the LTIF regulation) authorised under the LTIF Regulation. LTIF Regulation the UK version of Regulation (EU) 2015/760 of the European Parliament and of the Council of 29 April 2015 on European long-term investment funds which is part of UK law by virtue of the EUWA. MAR Level 2 Regulations (1) the UK version of Commission Delegated Regulation (EU) 2016/909 of 1 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the content of notifications to be submitted to competent authorities and the compilation, publication and maintenance of the list of notifications, which is part of UK law by virtue of the EUWA; (2) the UK version of Commission Implementing Regulation (EU) 2016/378 of 11 March 2016 laying down implementing technical standards with regard to the timing, format and template of the submission of notifications to competent authorities according to Regulation (EU) No 596/2014 of the European Parliament and of the Council, which is part of UK law by virtue of the EUWA; (3) the UK version of Commission Delegated Regulation (EU) 2016/1052 of 8 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the conditions applicable to buy-back programmes and stabilisation measures, which is part of UK law by virtue of the EUWA; (4) the UK version of Commission Delegated Regulation (EU) 2016/522 of 17 December 2015 supplementing Regulation (EU)

FCA 201X/XX
No 596/2014 of the European Parliament and of the Council as regards an exemption for certain third countries public bodies and central banks, the indicators of market manipulation, the disclosure thresholds, the competent authority for notifications of delays, the permission for trading during closed periods and types of notifiable managers’ transactions, which is part of UK law by virtue of the EUWA; (5) the UK version of Commission Delegated Regulation (EU) 2016/960 of 17 May 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the appropriate arrangements, systems and procedures for disclosing market participants conducting market soundings, which is part of UK law by virtue of the EUWA; (6) the UK version of Commission Implementing Regulation (EU) 2016/959 of 17 May 2016 laying down implementing technical standards for market soundings with regard to the systems and notification templates to be used by disclosing market participants and the format of the records in accordance with Regulation (EU) No 596/2014 of the European Parliament and of the Council, which is part of UK law by virtue of the EUWA; (7) the UK version of Commission Delegated Regulation (EU) 2016/908 of 26 February 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council laying down regulatory technical standards on the criteria, the procedure and the requirements for establishing an accepted market practice and the requirements for maintaining it, terminating it or modifying the conditions for its acceptance, which is part of UK law by virtue of the EUWA; (8) the UK version of Commission Delegated Regulation (EU) 2016/957 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the appropriate arrangements, systems and procedures as well as notification templates to be used for preventing, detecting and reporting abusive practices or suspicious orders or transactions, which is
part of UK law by virtue of the EUWA;
(9) the UK version of Commission Implementing Regulation (EU) 2016/1055 of 29 June 2016 laying down implementing technical standards with regard to the technical means for appropriate public disclosure of inside information and for delaying the public disclosure of inside information in accordance with Regulation (EU) No 596/2014 of the European Parliament and of the Council, which is part of UK law by virtue of the EUWA;

FCA 201X/XX
(10) the UK version of Commission Implementing Regulation (EU) 2016/347 of 10 March 2016 laying down implementing technical standards with regard to the precise format of insider lists and for updating insider lists in accordance with Regulation (EU) No 596/2014 of the European Parliament and of the Council, which is part of UK law by virtue of the EUWA; (11) the UK version of Commission Implementing Regulation (EU) 2016/523 of 10 March 2016 laying down implementing technical standards with regard to the format and template for notification and public disclosure of managers’ transactions in accordance with Regulation (EU) No 596/2014 of the European Parliament and of the Council, which is part of UK law by virtue of the EUWA; (12) the UK version of Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest, which is part of UK law by virtue of the EUWA; Material Risk Takers Regulation the UK version of Commission Delegated Regulation (EU) No 604/2014 of 4 March 2014 supplementing Directive 2013/36/EU of the European Parliament and of the Council with regard to regulatory technical standards with respect to qualitative and appropriate quantitative criteria to identify categories of staff whose professional activities have a material impact on an institution’s risk profile, which is part of UK law by virtue of the EUWA. Money Market Funds Regulation the UK version of Regulation (EU) No 2017/1131 of the European Parliament and the Council of 14 June 2017 on money market funds, which is part of UK law by virtue of the EUWA. non-UK AIF an AIF which is not a UK AIF. non-UK AIFM an AIFM which is not a UK AIFM. onshored regulation a regulation made pursuant to the Treaty and which is part of UK law by virtue of the EUWA. overseas SMCR banking firm a firm identified as an overseas banking firm in the decision tree in SYSC 23 Annex 1 (Definition of SMCR firm and different types of SMCR firms) and Part Four of that Annex. pre-exit incoming EEA firm (in COMP) an EEA firm, or Treaty firm, that, before exit day, exercised its right to carry on a regulated activity in the United Kingdom, and qualified for authorisation, within the meaning of, and in

FCA 201X/XX accordance with, respectively, section 193(1)(a) and Schedule 3 of the Act (EEA Passport Rights), or section 193(1)(b) and Schedule 4 of the Act (Treaty Rights), as from time to time in force before exit day. Prospectus RTS Regulation 1 the UK version of Commission Delegated Regulation (EU) No 382/2014 supplementing Directive 2003/71/EC of the European Parliament and of the Council with regard to regulatory technical standards for publication of supplements to the prospectus, which is
part of UK law by virtue of the EUWA.
Prospectus RTS
Regulation 2 the UK version of Commission Delegated Regulation (EU) 2016/301 supplementing Directive 2003/71/EC of the European Parliament and of the Council with regard to regulatory technical standards for approval and publication of the prospectus and dissemination of advertisements and amending Commission Regulation (EC) No 809/2004, which is part of UK law by virtue of the EUWA. Regulatory technical standards 1152/2014 the UK version of Regulation (EU) No 1152/2014 of 4 June 2014 supplementing Directive 2013/36/EU of the European Parliament and of the Council with regard to regulatory technical standards on the identification of the geographical location of the relevant credit exposures for calculating institution-specific countercyclical capital buffer rates which is part of UK law as a result of section 3 of the EUWA. RRD Regulation the UK version of Commission Delegated Regulation (EU) 2016/1075 of 23 March 2016 supplementing Directive 2014/59/EU of the European Parliament and of the Council with regard to regulatory technical standards specifying the content of recovery plans, resolution plans and group resolution plans, the minimum criteria that the competent authority is to assess as regards recovery plans and group recovery plans, the conditions for group financial support, the requirements for independent valuers, the contractual recognition of write-down and conversion powers, the procedures and contents of notification requirements and of notice of suspension and the operational functioning of the resolution colleges, which is part of UK law by virtue of the EUWA. RVECA a qualifying venture capital fund (as defined in the RVECA Regulation). RVECA manager the manager of a qualifying venture capital fund (as defined in the RVECA Regulation) that is registered in accordance with article 14 of the RVECA Regulation. RVECA Regulation the UK version of Regulation (EU) No 345/2013 of the European Parliament and the Council of 17 April 2013 on European venture capital funds, which is part of UK law by virtue of the EUWA. SEF a qualifying social entrepreneurship fund (as defined in the SEF Regulation).

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SEF manager the manager of a qualifying social entrepreneurship fund (as defined in the SEF Regulation) that is registered in accordance with article 15 of the SEF Regulation. SEF Regulation the UK version of Regulation (EU) No 346/2013 of the European Parliament and the Council of 17 April 2013 on European social entrepreneurship funds, which is part of UK law by virtue of the EUWA. SSR Delegated Regulation 1 the UK version of Commission Delegated Regulation (EU) No 826/2012 of 29 June 2012 supplementing Regulation (EU) No 236/2012 of the European Parliament and of the Council with regard to regulatory technical standards on notification and disclosure requirements with regard to net short positions, the details of the information to be provided to the European Securities and Markets Authority in relation to net short positions and the method for calculating turnover to determine exempted shares, which is part of UK law by virtue of the EUWA. SSR Delegated Regulation 2 the UK version of Commission Delegated Regulation (EU) No 918/2012 of 5 July 2012 supplementing Regulation (EU) No 236/2012 of the European Parliament and of the Council on short selling and certain aspects of credit default swaps with regard to definitions, the calculation of net short positions, covered sovereign credit default swaps, notification thresholds, liquidity thresholds for suspending restrictions, significant falls in the value of financial instruments and adverse events, which is part of UK law by virtue of the EUWA. SSR Implementing Regulation the UK version of Commission Implementing Regulation (EU) No 827/2012 of 29 June 2012 laying down implementing technical standards with regard to the means for public disclosure of net position in shares, the format of the information to be provided to the European Securities and Markets Authority in relation to net short positions, the types of agreements, arrangements and measures to adequately ensure that shares or sovereign debt instruments are available for settlement and the dates and period for the determination of the principal venue for a share according to Regulation (EU) No 236/2012 of the European Parliament and of the Council on short selling and certain aspects of credit default swaps, which is part of UK law by virtue of the EUWA. TD Major Holdings Regulation the UK version of Commission Delegated Regulation (EU) 2015/761 of 17 December 2014 supplementing Directive 2004/109/EC of the European Parliament and of the Council with regard to certain regulatory technical standards on major holdings, which is part of UK law by virtue of the EUWA. Trade Repositories (EU Exit) Regulations the Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendments etc. and Transitional Provision) (EU Exit) Regulations 2018 (SI 2018/XXXX).

FCA 201X/XX trade repository a legal person that centrally collects and maintains the records of derivatives. UK-adopted IFRS has the meaning given in section 474(1) of the Companies Act 2006. [Editor’s note: The Department for Business, Energy and Industry Strategy will lay a statutory instrument containing amendments to
section 474(1) of the Companies Act 2006 in due course.]
UK AIFM regime FUND, other rules in the FCA Handbook which, when made, implemented AIFMD, the AIFMD level 2 regulation, and the AIFMD UK regulation. UK MTF (as defined in article 2(1)(14A) of MiFIR) means a multilateral system, operated by a UK investment firm or market operator, which:
(a) brings together multiple third-party buying and selling interests in financial instruments (in the system and in accordance with nondiscretionary rules) in a way which results in a contract; and (b) complies, as applicable, with:
(i) paragraph 9A of the Recognition Requirements Regulations; (ii) the EU regulations specified in Schedule 2 of MiFIR; (iii) rules made by the competent authority governing the operating conditions of investment firms so far as they apply to MTFs, and for the purposes of this definition, an investment firm or market operator is a UK investment firm or market operator if it has its registered office (or if it does not have a registered office, its head office) in the United Kingdom. UK OTF (as defined in article 2(1)(15A) of MiFIR) means a multilateral system:
(a) which is not a regulated market or an MTF; (b) in which multiple third-party buying and selling interests in bonds, structured finance products, emission allowances or derivatives are able to interact in the system in a way that results in a contract, and complies, as applicable, with:
(i) paragraph 9A of the Recognition Requirements Regulations; (ii) the EU regulations specified in Schedule 2 of MiFIR;

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(iii) rules made by the competent authority governing the operating conditions of investment firms so far as they apply to OTFs. UK parent financial holding company has the meaning in article 4(1)(30) of the UK CRR. UK parent institution has the meaning in article 4(1)(28) of the UK CRR. UK parent mixed financial holding company has the meaning in article 4(1)(32) of the UK CRR. UK parent undertaking (a) a UK parent institution; (b) a UK parent financial holding company; or (c) a UK parent mixed financial holding company. UK prudential sectoral legislation (in relation to a financial sector) requirements applicable to persons in that financial sector in accordance with UK legislation and rules about prudential supervision of regulated entities in that financial sector and so that:
(a) (in relation to the banking sector and the investment services sector) in particular this includes the requirements laid down in the UK CRR (in relation to a CAD investment firm), GENPRU and BIPRU; and (b) (in relation to the insurance sector) in particular this includes requirements laid down in the UK provisions which implemented the Solvency II Directive and Solvency II Regulations. UK regulated entity a regulated entity that is a UK firm. UK UCITS means (in accordance with sections 236A and 237 of the Act) subject to (4) below, an undertaking which may consist of several sub-funds and:
(1) is an AUT, an ACS or an ICVC:
(a) with the sole object of collective investment of capital raised from the public in transferable securities or other liquid financial assets specified in paragraph (2), and operating on the principle of risk-spreading; (b) with units which are, at the request of holders, repurchased or redeemed, directly or indirectly, out of those undertakings’ assets (see also paragraph (3)); and

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(c) which (in accordance with the rules in COLL 4.2) has identified itself as a UCITS in its prospectus and has been authorised accordingly by the FCA. (2) The transferable securities or other liquid financial assets specified for the purposes of paragraph (1)(a) are those which are permitted by COLL 5.2. (3) For the purposes of paragraph (1)(b), action taken by the undertaking to ensure that the price of its units on an investment exchange do not significantly vary from their net asset value is to be regarded as equivalent to such repurchase or redemption. (4) The following undertakings are not a UK UCITS:
(a) a collective investment undertaking of the closed-ended type; (b) a collective investment undertaking which raises capital without promoting the sale of its units to the public in the UK; (c) an open-ended investment company, or other collective investment undertaking, the units of which, under the fund rules or the instruments of incorporation of the investment company, may be sold only to the public in countries or territories outside the UK.

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Amend the following definitions as shown. Underlining indicates new text and striking through indicates deleted text. above-threshold nonEEA UK AIFM a non-EEA UK AIFM that is not a small AIFM. acting as trustee or depositary of a UK UCITS the regulated activity, specified in article 51ZB of the Regulated Activities Order which is, in summary, acting as:
(a) a trustee of an authorised unit trust scheme; or (b) a depositary of an open-ended investment company; or (c) a depositary of an authorised contractual scheme; where that company or scheme is a UK UCITS. additional tier 1 capital as defined in article 61 of the EU CRR UK CRR. additional tier 1 instrument a capital instrument that qualifies as an additional tier 1 capital instrument under article 52 of the EU CRR UK CRR. ADR entity any alternative dispute resolution entity, however named or referred to, which is listed in accordance with article 20(2) of the ADR Directive as defined in regulation 4 of the ADR Regulations. [Note: article 4(1) of the ADR Directive] agreeing to carry on a regulated activity the regulated activity specified in article 64 of the Regulated Activities Order (Agreeing to carry on specified kinds of activity), of agreeing to carry on an activity specified in Part II or Part 3A of that Order other than:
…
(ca) managing a UK UCITS;
(cb) acting as trustee or depositary of a UK UCITS; … AIFM investment firm a firm which:
(a) is:
(i) a full-scope UK AIFM; or and
(ii) an incoming EEA AIFM branch; and [deleted]

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(b) has a Part 4A permission (or an equivalent permission from its Home State regulator) for managing investments where:
(i) the investments managed include one or more financial instruments; and (ii) the permission is limited to the activities permitted by
article 6(4) of AIFMD referred to in FUND 1.4.3R(3)
to (6).
AIFM investment management functions investment management functions of an AIFM as set out in 1(a) (being portfolio management) or (b) (risk management) of Annex I to AIFMD. AIFM management functions the management functions of an AIFM listed in Annex I to AIFMD FUND 1.4.7G. AIFMD level 2 regulation the UK version of Commission delegated regulation (EU) No 231/2013 supplementing Directive 2011/16/EU of the European Parliament and of the Council with regard to exemptions, general operating conditions, depositaries, leverage, transparency and supervision (http://eur-lex.europa.eu/legalcontent/EN/TXT/?uri=CELEX%3A32013R0231), which is part of UK law by virtue of the EUWA. alternative debenture the investment specified in article 77A of the Regulated Activities Order (Alternative finance investment bonds). [Editor’s note: The current policy intention for COLL is to reflect the current scope of this article in the Regulated Activities Order. If amendments are made to the scope of this article in the relevant statutory instrument, we will amend the drafting of this glossary term to deliver the stated policy outcome.] alternative investment fund (in accordance with article 4(1)(a) of AIFMD) a collective investment undertaking, including investment compartments thereof, which:
(a) raises capital from a number of investors, with a view to investing it in accordance with a defined investment policy for the benefit of those investors; and (b) does not require authorisation pursuant to article 5 of the UCITS Directive is not a UK UCITS. [Note: article 4(1)(a) of AIFMD] alternative investment fund manager (1) (in GENPRU 3.1) a manager of alternative investment funds within the meaning of Article 4(1)(b), (l) and (ab) of Directive 2011/61/EU or an undertaking which is outside the EEA and which would require authorisation in accordance

FCA 201X/XX with Directive 2011/61/EU if it had its registered office within the EEA. (2) (except in GENPRU 3.1 and in accordance with article 4(1)(b) of AIFMD) a legal person whose regular business is performing AIFM investment management functions for one or more AIF. [Note: article 4(1)(b) of AIFMD)] ancillary service (1) (except in CONC) any of the services listed in Section B of
Annex I to MiFID Part 3A of Schedule 2 to the Regulated
Activities Order, that is:
…
(g) investment services and activities included in Part 3 of Schedule 2 to the Regulated Activities Order, as well as ancillary services within (a) to (f), above, of the type included in Part 3A, related to the underlying of the derivatives included under Section C - 5, 6, 7 and 10, that is (in accordance with that Annex and Recital 21 to, and Article 39 of, the MiFID Regulation) in paragraphs 5, 6, 7 or 10 of Part 1 of
Schedule 2 to the Regulated Activities Order where
these are connected to the provision of investment or ancillary services. :
(i) commodities;
(ii) climatic variables;
(iii) freight rates;
(iv) emission allowances;
(v) inflation rates or other official economic statistics; (vi) telecommunications bandwidth; (vii ) commodity storage capacity; (vii i) transmission or transportation capacity relating to commodities, where cable, pipeline or other means; (ix) an allowance, credit, permit, right or similar asset which is directly linked to the supply,

FCA 201X/XX distribution or consumption of energy derived from renewable resources; (x) a geological, environmental or other physical variable; (xi) any other asset or right of a fungible nature, other than a right to receive a service, that is capable of being transferred; (xii ) an index or measure related to the price or value of, or volume of transactions in any asset, right, service or obligation; where these are connected to the provision of investment services or ancillary services. [Note: article 4(1)(3) 2(3) of MiFID MiFIR] (2) … ancillary services undertaking (1) (in accordance with Article 4(21) of the Banking Consolidation Directive (Definitions) for the purpose of GENPRU (except in GENPRU 3) and BIPRU (except in BIPRU 12) and subject to (2)) and in relation to an undertaking in a consolidation group, sub-group or another group of persons) an undertaking complying with the following conditions:
(a) its principal activity consists of:
(i) owning or managing property; or
(ii) managing data-processing services; or (iii) any other similar activity; (b) the activity in (a) is ancillary to the principal activity of one or more credit institutions or investment firms; and (c) those credit institutions or investment firms are also members of that consolidation group, sub-group or group. [Note: article 4(21) of the Banking Consolidation Directive (Definitions)] (2) … (3) (except in (1)) has the meaning in article 4(1)(18) of the EU CRR UK CRR.

FCA 201X/XX appropriate UK regulator
(1) in relation to an EEA firm (in accordance with Schedule 3 paragraph 13(4) and 14(4) to the Act), whichever of the FCA or PRA is the competent authority for the purposes of the relevant Single Market Directive; [deleted] (2) in relation to a UK firm (in accordance with Schedule 3 paragraph 18A to the Act), (a) the PRA, where the firm is a PRA-authorised person; and (b) in any other case, the FCA. (3) in relation to a Treaty firm (in accordance with section 35(2A) of the Act), [deleted] (a) in the case of a PRA-authorised person, the PRA; and (b) in any other case, the FCA approved bank (except in COLL) (in relation to a bank account opened by a firm):
(a) if the account is opened at a branch in the United Kingdom:
(i) the Bank of England; or
(ii) the central bank of a member state of the OECD; or (iii) a bank; or (iv) a building society; or (v) a bank which is supervised by the central bank or other banking regulator of a member state of the OECD; or (b) if the account is opened elsewhere:
(i) a bank in (a); or
(ii) a credit institution established in an EEA State other than the United Kingdom and duly authorised by the relevant Home State regulator; or [deleted] (iii) a bank which is regulated in the Isle of Man or the Channel Islands; or (c) a bank supervised by the South African Reserve Bank; or (d) any other bank that:

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(i) is subject to regulation by a national banking regulator; (ii) is required to provide audited accounts; (iii) has minimum net assets of £5 million (or its equivalent in any other currency at the relevant time) and has a surplus revenue over expenditure for the last two financial years; and (iv) has an annual audit report which is not materially qualified. (in COLL) any person falling within (a-c) and a credit institution established in an EEA State and duly authorised by the relevant Home State regulator. approved credit institution a credit institution recognised or permitted under the law of an EEA State or the United Kingdom to carry on any of the activities set out in
Annex 1 to the CRD.
approved financial institution any of the following:
(a) the European Central Bank;
(b) the central bank of an EEA State or the United Kingdom; … approved security (1) (in COLL) a transferable security that is admitted to official listing in the UK or an EEA State or is traded on or under the rules of an eligible securities market (otherwise than by the specific permission of the market authority). …
article 18(5)
relationship the relationship where there are participations or capital ties other than those referred to in article 18(1) and (4) of the EU CRR UK CRR (Methods for prudential consolidation).
article 18(6)
relationship
(in accordance with article 18 of the EU CRR UK CRR (Methods for prudential consolidation)) a relationship of one of the following kinds:
(a) where an institution exercises a significant influence over one or more institutions or financial institutions, but without holding a participation or other capital ties in these institutions; or

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(b) where two or more institutions or financial institutions are placed under single management other than under a contract or clauses of their memoranda or articles of association. asset backed commercial paper programme for the purposes of BIPRU 9 (Securitisation) and in accordance with
Part 1 of Annex IX of the Banking Consolidation Directive
(Securitisation definitions) a programme of securitisations (within the meaning of paragraph (2) of the definition of securitisation) the securities issued by which predominantly take the form of commercial paper with an original maturity of one year or less. [Note: Part 1 of Annex IX of the Banking Consolidation Directive (Securitisation definitions)] asset management company a management company management company within the meaning of
Article 2(1)(b) of the UCITS Directive, as well as or an undertaking
the registered office of which is outside the EEA UK and which would require authorisation in accordance with Article 6(1) of the UCITS Directive Part 4A permission under Article 51ZA of the Regulated Activities Order (Managing a UK UCITS) if it had its registered office within the EEA UK. Audit Regulation the UK version of Regulation (EU) No 537/2014 of the European Parliament and of the Council of 16 April 2014 on specific requirements regarding statutory audit of public-interest entities and repealing Commission Decision 2005/909/EC), which is part of UK law by virtue of the EUWA, except that any reference to Article 16 of that Regulation, shall, where and to the extent that the effect of that
Article has been reproduced in any of the following enactments in
relation to a category of issuer, be a reference to that enactment in relation to that category of issuer:
(1) for private companies, sections 485A to 485C and 494ZA of the Companies Act 2006; (2) for public companies, sections 489A to 489C and 494ZA of the Companies Act 2006; (3) for building societies, paragraphs 3B to 3E of Schedule 11 to the Building Societies Act 1986; (4) for friendly societies, paragraphs 2 to 5 of Schedule 14A to the Friendly Societies Act 1992; (5) for limited liability partnerships, sections 485A to 485C and 494ZA of the Companies Act 2006 as applied by regulations 36 and 38A of the Limited Liability Partnerships (Accounts and Audit) (Application of the Companies Act 2006) Regulations 2008;

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(6) for insurance undertakings within the meaning given by regulation 2 of The Insurance Accounts Directive (Miscellaneous Insurance Undertakings) Regulations 2008, sections 485A to 485C and 494ZA of the Companies Act 2006 as applied by regulation 6(1A) of those Regulations. authorised contractual scheme manager a firm, including, if relevant, an EEA UCITS management company or incoming EEA AIFM, which is the authorised fund manager of the ACS in accordance with the contractual scheme deed. authorised corporate director the director of an ICVC who is the authorised corporate director of the ICVC in accordance with COLL 6.5.3R (Appointment of an ACD) including, if relevant, an EEA UCITS management company or incoming EEA AIFM. authorised person (in accordance with section 31 of the Act (Authorised persons)) one of the following:
(a) a person who has a Part 4A permission to carry on one or more regulated activities; (b) an incoming EEA firm; [deleted] (c) an incoming Treaty firm; [deleted] (d) a UCITS qualifier; [deleted] (e) an ICVC; (f) the Society of Lloyd’s. (see also GEN 2.2.18R for the position of an authorised partnership or unincorporated association which is dissolved.) bank (a) a firm with a Part 4A permission which includes accepting deposits, and:
(i) which is a credit institution; or
(ii) whose Part 4A permission includes a requirement that it comply with the rules in GENPRU and BIPRU relating to banks; [deleted] but which is not a building society, a friendly society or a credit union; (b) an EEA bank which is a full credit institution. [deleted] banking and investment group a group of persons (at least one of which is an EEA regulated entity a UK regulated entity that is a credit institution or an investment firm) who:

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(a) form a group in respect of which the consolidated capital adequacy requirements for the banking sector or the investment services sector under:
(i) the appropriate regulator’s sectoral rules; (ii) the sectoral rules of another competent authority apply; or [deleted] (b) would form such a group if the scope of those sectoral rules were amended as described in paragraph 3.1 of GENPRU 3
Annex 2 (removing restrictions relating to place of
incorporation or head office of members of those financial sectors). benchmarks regulation the UK version of Regulation (EU) No. 2016/1011 of the European Parliament and of the Council of 8 June 2016 on indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds and amending Directives 2008/48/EC and 2014/17/EU and Regulation (EU) No 596/2014, which is part of UK law by virtue of the EUWA. [Note: see http://eur-lex.europa.eu/legalcontent/EN/TXT/?uri=CELEX%3A32016R1011 BIPRU firm a firm, as defined in article 4(1)(2)(c) of the EU CRR UK CRR that satisfies the following conditions:
(a) …
BMR benchmark administrator a person who:
(1) is an administrator as defined in article 3.1(6) of the benchmarks regulation (which in summary is a person who has control over the provision of a benchmark); and (2) has been authorised or registered (whether in the UK or elsewhere) in accordance with article 34 of the benchmarks regulation. branch (a) (in relation to a credit institution):
(i) a place of business which forms a legally dependent
part of a credit institution and which carries out
directly all or some of the transactions inherent in the business of credit institutions; (ii) for the purposes of the CRD and in accordance with
article 38 of the CRD, any number of places of
business set up in the same EEA State by a credit

FCA 201X/XX institution with headquarters in another EEA State are to be regarded as a single branch; [deleted] (b) (in relation to an investment firm):
(i) a place of business other than the head office which is a part of an investment firm, which has no legal personality and which provides investment services and/or activities and which may also perform ancillary services for which the firm has been authorised; (ii) all the places of business set up in the same EEA State by an investment firm with headquarters in another EEA State are regarded as a single branch; [deleted] [Note: article 4(1)(30) of MiFID] (c) (in relation to an insurance undertaking) any permanent presence of the insurance undertaking in an EEA State other than that the country in which it has its head office is to be regarded as a single branch, whether that presence consists of a single office which, or two or more offices each of which:
(i) is managed by the insurance undertaking’s own staff; or (ii) is an agency of the insurance undertaking; or (iii) is managed by a person who is independent of the insurance undertaking, but has permanent authority to act for the insurance undertaking as an agency would. (d) (in relation to an IDD insurance intermediary):
(i) a place of business which is a part of an IDD insurance intermediary, not being the principal place of business, which has no separate legal personality and which provides insurance distribution for which the IDD insurance intermediary has been registered; (ii) for the purposes of the IDD, all the places of business set up in the same EEA State by an IDD insurance intermediary with headquarters in another EEA State are to be regarded as a single branch [deleted]; (iii) an agency or permanent presence of an IDD insurance intermediary in a Host State that is equivalent to a branch is to be regarded as a branch,

FCA 201X/XX unless the intermediary lawfully sets up such permanent presence in another legal form [deleted]. [Note: articles 2(1)(12) and 6(1) of the IDD] (e) (in relation to an IDD reinsurance intermediary):
(i) a place of business which is a part of an IDD reinsurance intermediary, not being the principal place of business, which has no separate legal personality and which provides reinsurance distribution for which the IDD reinsurance intermediary has been registered; (ii) for the purposes of the IDD, all the places of business set up in the same EEA State by an IDD reinsurance intermediary with headquarters in another EEA State are to be regarded as a single branch [deleted]; (iii) an agency or any permanent presence of an IDD reinsurance intermediary in the territory of a Host State that is equivalent to a branch is to be regarded as a branch, unless the intermediary lawfully sets up such permanent presence in another legal form [deleted]. [Note: articles 2(1)(12) and 6(1) of the IDD] (f) (in relation to an EEA UCITS management company):
[deleted]
(i) a place of business which is a part of an EEA UCITS management company, which has no separate legal personality and which provides the services for which the EEA UCITS management company has been authorised; (ii) for the purposes of the UCITS Directive, all the places of business set up in the same EEA State by an EEA UCITS management company with headquarters in another EEA State are to be regarded as a single branch. (g) (in accordance with regulation 2(1) of the Payment Services Regulations) (in relation to a payment institution, or a registered account information service provider or an EEA registered account information service provider) a place of business of such a payment service provider, other than its head office, which forms a legally dependent part of such a provider and which carries out directly all or some of the services inherent in its business. For the purposes of the

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Payment Services Regulations, all places of business set up in the same EEA State other than the United Kingdom by such a payment service provider are to be regarded as a single branch. [Note: article 4 (39) of the Payment Services Directive] (h) (in relation to a person carrying on auction regulation bidding) a branch. [deleted] (i) (in relation to an AIFM) (i) a place of business which is a part of an AIFM that has no legal personality and provides the services for which the AIFM has been authorised; (ii) for the purpose of (i), all places of business established in the same EEA State country by an AIFM with its registered office in another EEA State country shall be regarded as a single branch. [Note: article 4(1)(c) of AIFMD] Buy-back and Stabilisation Regulation the UK version of Commission Delegated Regulation (EU) 2016/1052 of 8 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the conditions applicable to buy-back programmes and stabilisation measures, which is part of UK law by virtue of the EUWA. See: http://eur-lex.europa.eu/legalcontent/EN/TXT/?uri=CELEX%3A32016R1052 buy-to-let credit agreement a contract that:
(a) at the time it is entered into:
(i) is one under which a lender provides credit to an individual or to trustees (the ‘borrower’); (ii) provides for the obligation of the borrower to repay to be secured by a mortgage on land in the EEA the UK; where “land” for these purposes means:
(iii) in relation to a contract entered into before exit day:
(A) land in the United Kingdom; or
(B) if the contract was entered into on or after 21 March 2016, land in the United Kingdom or within the territory of a State that was an EEA

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State at the time the contract was entered into; and (iv) in relation to a contract entered into on or after exit day, land in the United Kingdom. … … CAD article 22 group UK consolidation group or non-EEA non-UK sub-group that meets the conditions in BIPRU 8.4.9R (Definition of a CAD Article 22 group). CAD investment firm a firm that is subject to the requirements imposed by the UK implementation of MiFID (or a firm which would be subject to that Directive those requirements if its head office were in an EEA State the UK) but excluding a bank, a building society, a credit institution, a local and an exempt CAD firm that meets the following conditions:
(a) it is a firm as defined in article 4(1)(2)(c) of the EU CRR UK CRR; … capital conservation buffer (in accordance with article 128(1) of CRD (Definitions) regulation 2(1) (Interpretation) of the Capital Requirements (Capital Buffers and Macro-prudential Measures) Regulations 2014) the amount of common equity tier 1 capital a firm must calculate in line with in IFPRU 10.2. capital resources (1) in relation to a BIPRU firm, the firm’s capital resources as calculated in accordance with the capital resources table; or (2) (in relation to a CAD investment firm that is an EEA firm and not a BIPRU firm and which is required to meet the capital resources requirements of the CRD implementation measures for its EEA State on an individual basis) capital resources calculated under those CRD implementation measures; or [deleted] (3) (for the purposes of GENPRU and BIPRU (except in BIPRU 12), in relation to an undertaking not falling within (1) or (2) and subject to (4)), capital resources calculated in accordance with (1) on the assumption that:
(a) it is a BIPRU firm with a Part 4A permission; and (b) it carries on all its business in the United Kingdom and has obtained whatever permissions for doing so are required under the Act; or

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(4) (for the purposes of GENPRU and BIPRU (except in BIPRU
12) and in relation to any undertaking not falling within in (1)
or (2) for which the methodology in (3) does not give an answer whose capital resources a BIPRU firm (the “relevant firm”) is required to calculate under a Handbook rule) capital resources calculated under (1) on the assumption that it is a BIPRU firm of the same category as the relevant firm; or (5) (for a firm carrying on any home financing connected to regulated mortgage contracts or home financing and home financing administration connected to regulated mortgage contracts) capital resources calculated under MIPRU 4.2.23R. cash assimilated instrument in accordance with Article 4(35) of the Banking Consolidation Directive (Definitions)) a certificate of deposit or other similar instrument issued by a lending firm. [Note: article 4(35) of the Banking Consolidation Directive (Definitions)] CASS 7 asset management firm a firm subject to the client money rules and which falls within either (a) or (b), or both, but not (c):
…
(b) …
…
(viii) acting as trustee or depositary of a UK UCITS; … CESR’s UCITS eligible assets guidelines the Committee of European Securities Regulators’ guidelines concerning eligible assets for investment by undertakings for collective investment in transferable securities (CESR/07-044). These are available at https://www.esma.europa.eu/sites/default/files/library/2015/11/07_04 4.pdf CCR internal model method permission an Article 129 implementing measure, Article 129 permission, a requirement or a waiver that requires a BIPRU firm or a CAD investment firm to use the CCR internal model method central bank (1) (in accordance with Article 4(23) of the Banking Consolidation Directive (Definitions) and for the purposes of GENPRU (except GENPRU 3) and BIPRU (except BIPRU 12)) includes the European Central Bank unless otherwise indicated, the Bank of England and the central banks of other countries.

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[Note: article 4(23) of the Banking Consolidation Directive (Definitions)] (2) (except in (1)) has the meaning in article 4(1)(46) of the EU CRR UK CRR. central counterparty (in accordance with Part 1 of Annex III of the Banking Consolidation Directive (Definitions) and for the purpose of BIPRU 13 (The calculation of counterparty risk exposure values for financial derivatives, securities financing transactions and long settlement transactions)) an entity that legally interposes itself between counterparties to contracts traded within one or more financial markets, becoming the buyer to every seller and the seller to every buyer. [Note: Part 1 of Annex III of the Banking Consolidation Directive (Definitions)] certificate representing certain securities the investment specified in article 80 of the Regulated Activities Order (Certificates representing certain securities), which is in summary: a certificate or other instrument which confers contractual or property rights (other than rights consisting of options):
…
[Editor’s note: The current policy intention for COLL is to reflect the current scope of this article in the Regulated Activities Order. If amendments are made to the scope of this article in the relevant statutory instrument, we will amend the drafting of this glossary term to deliver the stated policy outcome.] CIU (1) (except in IFPRU) collective investment undertaking. (2) (in IFPRU) has the meaning in article 4(1)(7) of the EU CRR UK CRR. class (1) … (2) (in COLL):
(a) a particular class of units of an authorised fund; or (b) all of the units relating to a single sub-fund; or (c) a particular class of units relating to a single subfund.; or (d) in relation to an EEA UCITS scheme, any arrangement equivalent to (a), (b) or (c). [deleted] …

FCA 201X/XX clean-up call option (1) (for the purposes of BIPRU 9 (Securitisation), in relation to a securitisation (within the meaning of paragraph (2) of the definition of securitisation) and in accordance with Part 1 of
Annex IX of the Banking Consolidation Directive
(Securitisation definitions)) a contractual option for the originator to repurchase or extinguish the securitisation positions before all of the underlying exposures have been repaid, when the amount of outstanding exposures falls below a specified level. [Note: Part 1 of Annex IX of the Banking Consolidation Directive (Securitisation definitions)] … collective portfolio management in relation to a management company, the activity of management of UCITS schemes, EEA UCITS schemes or other collective investment undertakings not covered by the UCITS Directive that the firm management company is permitted to carry on in accordance with COLL 6.9.9R or article 6(2) of the UCITS Directive as applicable. This includes the functions mentioned in Annex II to that directive. collective portfolio management firm a firm which:
(a) …
(b) is a UCITS firm that has a Part 4A permission for managing a UK UCITS. combined buffer the sum of:
(1) the capital conservation buffer; and
(2) the countercyclical capital buffer. has the meaning in regulation 2(1) (Interpretation) of the Capital Requirements (Capital Buffers and Macro-prudential Measures) Regulations 2014). commodity (1) (except for (2)) a physical asset (other than a financial instrument or cash) which is capable of delivery. (2) (for the purpose of calculating position risk requirements) any of the following (but excluding gold):
(a) a commodity within the meaning of paragraph (1); and (b) any:
(i) physical or energy product; or

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(ii) of the items referred to in paragraph 10 of
Section C of Annex I of MIFID paragraph 10
of Part 1 of Schedule 2 to the Regulated
Activities Order as an underlying with respect to the derivatives mentioned in that paragraph; which is, or can be, traded on a secondary market. (3) (in relation to the UK provisions which implemented MiFID or MiFIR) any goods of a fungible nature that are capable of being delivered, including metals and their ores and alloys, agricultural products, and energy such as electricity. commodity derivative those financial instruments defined in:
(a) point (44)(c) of article 4(1) of MiFID which relate to a commodity; or an underlying referred to in Section C(10) of
Annex I of MiFID; or
(b) in points (5), (6), (7) and (10) of Section C of Annex I to MiFID. means financial instruments:
(a) defined in article 2(1)(24)(c) of MiFIR; (b) which relate to a commodity or an underlying referred to in paragraph 10 of Part 1 of Schedule 2 to the Regulated Activities Order; or (c) which are referred to in paragraphs 5, 6, 7 or 10 of Part 1 of
Schedule 2 to the Regulated Activities Order.
[Note: article 2(1)(30) of MiFIR] common equity tier 1 capital as defined in article 50 of the EU CRR UK CRR. common equity tier 1 instrument a capital instrument that qualifies as a common equity tier 1 instrument under article 26 of the EU CRR UK CRR. common platform firm … (c) a UK MiFID investment firm which falls within the definition of ‘local firm’ in article 4(1)(4) of the EU CRR UK CRR; or … competent authority (1) (in relation to the functions referred to in Part VI of the Act)

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(a) the FCA, or the functions referred to in Part VI of the Act under the laws of (b) an authority exercising functions corresponding to the functions referred to in Part VI of the Act under the laws of another EEA State. (2) (in relation to the exercise of an EEA right and the exercise of the overseas financial stability information power) a competent authority for the purposes of the UK provisions which implemented the relevant Single Market Directive or the auction regulation. (3) (in relation to a group, and for the purposes of SYSC 12 (Group risk systems and controls requirement), GENPRU and BIPRU, any national authority of an EEA State the UK which is empowered by law or regulation to supervise regulated entities, whether on an individual or group-wide basis. (4) the authority, designated by each EEA State in accordance with Article 67 of MiFID, unless otherwise specified in MiFID. regulation 3 of the MiFI Regulations, or by regulation 17 of the DRS Regulations. [Note: article 4(1)(26) 2(18) of MiFID MiFIR] (5) (in REC) in relation to an investment firm or credit institution, means the competent authority in relation to that firm or institution for the purposes of the UK provisions which implemented MiFID. (6) [deleted] (7) the authority designated by each EEA State in accordance with article 32 of the short selling regulation. [deleted] (8) (for an AIF) the national authorities of an EEA State which are empowered by law or regulation to supervise AIFs. [deleted] (9) (for an AIFM) a national authority in an EEA State which is empowered by law or regulation to supervise AIFMs. [deleted] (10) (for the purposes of IFPRU) has the meaning in article 4(1)(40) of the EU UK CRR. (11) in relation to an EU State the authority designated by each that EU (and where applicable, EEA) State in accordance with
article 40 of the EU benchmarks regulation; and in relation to
a third country which is not an EU State, the supervisory authority which exercises functions equivalent to those

FCA 201X/XX exercised by competent authorities in EU States under the EU benchmarks regulation. (12) (in COLL) an authority exercising functions corresponding to the functions referred to in Part VI of the Act under the laws of an EEA State. conglomerate capital resources in relation to a financial conglomerate with respect to which GENPRU 3.1.29R (Application of method 1 or 2 from Annex I of the Financial Groups Directive) applies) capital resources as defined in whichever of paragraphs 1.1 or 2.1 of GENPRU 3 Annex 1 (Capital adequacy calculations for financial conglomerates) applies with respect to that financial conglomerate. conglomerate capital resources requirement (in relation to a financial conglomerate with respect to which GENPRU 3.1.29R (Application of method 1 or 2 from Annex I of the Financial Groups Directive) applies) the capital resources requirement defined in whichever of paragraphs 1.3 or 2.4 of GENPRU 3 Annex 1 (Capital adequacy calculations for financial conglomerates) applies with respect to that financial conglomerate. consolidated basis has the meaning in article 4(1)(48) of the EU CRR UK CRR. consolidated capital resources (in relation to a UK consolidation group or a non-EEA non-UK subgroup and in GENPRU and BIPRU) that group’s capital resources calculated in accordance with BIPRU 8.6 (Consolidated capital resources). consolidated capital resources requirement (in relation to a UK consolidation group or a non-EEA non-UK subgroup and in GENPRU and BIPRU) an amount of consolidated capital resources that that group must hold in accordance with BIPRU
8.7 (Consolidated capital resources requirement).
consolidated indirectly issued capital has the meaning in BIPRU 8.6.12R (Indirectly issued capital and group capital resources), which is in summary any capital instrument issued by a member of a UK consolidation group or non-EEA non-UK sub-group where the conditions in BIPRU 8.6.12R are met. consolidated situation has the meaning in article 4(1)(47) of the EU CRR UK CRR. consolidated tape provider a person permitted under regulation 5 of the DRS Regulations to provide the service of:
(a) collecting trade reports for financial instruments made in accordance with articles 6, 7, 10, 12, 13, 20 and 21 of MiFIR from regulated markets, UK MTFs, UK OTFs and APAs; and (b) consolidating them into a continuous electronic live data stream providing price and volume data per financial instrument.

FCA 201X/XX consolidating supervisor has the meaning in article 4(1)(41) of the EU CRR UK CRR. consolidation Article 12(1) relationship a relationship between one undertaking (the first undertaking) and one two or more other undertakings which satisfies satisfying the following conditions set out in Article 12(1) of the Seventh Company Law Directive, which in summary are as follows:
(a) those the undertakings are not connected in the manner, as described in article 1(1) or (2) of that Directive section 1162 and Schedule 7 of the Companies Act 2006; and (b) one of the following conditions is satisfied either:
(i) they the undertakings are managed on a unified basis pursuant to a contract with one of them concluded with the first undertaking, or provisions in the undertaking’s memorandum or articles of association of those undertakings; or (ii) the administrative, management or supervisory bodies of those undertakings consist, for the major
part, of the same persons in office during the
financial year in respect of which it is being decided whether such a relationship exists. consolidation group (1) … (2) (for the purposes of SUP 16) the undertakings included in the scope of prudential consolidation to the extent and in the manner prescribed in Part One, Title II, Chapter 2, Sections 2 and 3 of the EU CRR UK CRR and IFPRU 8.1.3R to IFPRU 8.1.4R (Prudential consolidation) for which the FCA is the consolidating supervisor under article 111 of the CRD regulation 20 of the Capital Requirements Regulations 2013. consumer … (2A) (as further defined in section 425A of the Act) (in relation to the issue of statements or codes under section 64 of the Act), and general exemptions to consultation by the FCA (section 138L of the Act) in the publication of notices (section 391 of the Act) and the exercise of Treaty rights (Schedule 4 to the Act) a person who uses, has used, may have used, or has relevant rights or interests in relation to any services provided by:
(a) authorised persons in carrying on regulated activities;

FCA 201X/XX
(b) authorised persons who are investment firms, or credit institutions, in providing relevant ancillary services; or (c) persons acting as appointed representatives. for the purposes of this definition:
…
(D) (for the purposes of (2A)(b)):
(a) “credit institution” means:
(i) a credit institution authorised under the UK provisions which implemented the CRD; or (ii) an institution which would satisfy the requirements for authorisation as a credit institution under that directive if it had its registered office (or if it does not have one, its head office) in an EEA State the UK; … … (7) (in the definitions of cross-border dispute, domestic dispute, sales contract and service contract, and in DISP 1.1.10-BR, DISP 1.1A.42R, DISP 2.7.3R and DISP 2.7.9AR) has the meaning in regulation 3 of the ADR Regulations, which is an individual acting for purposes which are wholly or mainly outside that individual’s trade, business, craft, or profession. [Note: article 4(1) of the ADR Directive] … contingent convertible instrument a financial instrument which meets the requirements for either:
(a) Additional Tier 1 instruments under article 52; or (b) Tier 2 instruments under article 63, provided:
(i) the provisions governing the instrument require that, upon the occurrence of a trigger event, the principal amount of the instrument be written down on a permanent or temporary basis or the instrument be converted to one or more common equity Tier 1 instruments; and

FCA 201X/XX
(ii) the trigger mechanism in (i) is different from, or additional to, any discretionary mechanism for converting or writing down the principal amount of the instrument which is activated following a determination by the relevant authority that the issuer of the financial instrument (or its group, or any member of its group) is no longer viable, or will no longer be viable unless the relevant instrument is converted or written down; in each case of Regulation of the European Parliament and the Council on prudential requirements for credit institutions and investment firms (Regulation (EU) No 575/2013) and amending Regulation (EU) No 648/2012 the UK CRR. contract for differences the investment, specified in article 85 of the Regulated Activities Order (Contracts for differences etc), which is in summary rights under:
…
[Editor’s note: The current policy intention for COLL is to reflect the current scope of this article in the Regulated Activities Order. If amendments are made to the scope of this article in the relevant statutory instrument, we will amend the drafting of this glossary term to deliver the stated policy outcome.] contract of insurance … (2) (in relation to a contract) (in accordance with article 3(1) of the Regulated Activities Order (Interpretation)) any contract of insurance which is a long-term insurance contract or a general insurance contract, including:
…
(e) contracts of a kind referred to in the UK provisions which implemented article 2(3)(b)(v) of the Solvency II Directive (Collective insurance etc); and (f) contracts of a kind referred to in article 2(3)(c) of the Solvency II Directive (Social insurance) contracts relating to the length of human life that are regulated by or under any enactment relating to social security, in so far as they are effected or carried out at their own risk by undertakings with permission to effect or carry out contracts of long-term insurance as principals; …

FCA 201X/XX contracts of large risks
(in ICOBS and PROD) contracts of insurance covering risks within the following categories, in accordance with the UK provisions which implemented article 13(27) of the Solvency II Directive:
…
[Note: article 13(27) of the Solvency II Directive and article 2(1)(16) of the IDD] controller … (4) shares and voting power that a person holds in a firm (“B”) or in a parent undertaking of B (“P”) are disregarded for the purposes of determining control in the following circumstances:
…
(c) shares representing no more than 5% of the total voting power in B or P held by an investment firm, provided that:
(i) it holds the shares in the capacity of a market maker (as defined in article 4.1(7) of MIFID) (article 2(1)(6) of MiFIR); (ii) it is authorised by its Home State Regulator under MiFID has a Part 4A permission under the Act to carry on one or more investment services and/or activities; and (iii) it does not intervene in the management of B or P nor exerts any influence on B or P to buy the shares or back the share price; … (e) shares held by a credit institution or an investment firm are disregarded, provided that:
(i) the shares are held as a result of performing the investment services and activities of:
(A) underwriting share issues; or
(B) placing shares on a firm commitment basis in accordance with Annex I, section A.6 of MiFID paragraph 6 of Part 3 of
Schedule 2 to the Regulated Activities
Order; and

FCA 201X/XX
…
… conversion factor (in accordance with Article 4(28) of the Banking Consolidation Directive (Definitions) and for the purposes of BIPRU) the ratio of the currently undrawn amount of a commitment that will be drawn and outstanding at default to the currently undrawn amount of the commitment; the extent of the commitment is determined by the advised limit, unless the unadvised limit is higher. [Note: article 4(28) of the Banking Consolidation Directive (Definitions)] coordinator (in relation to a financial conglomerate) the competent authority which has been appointed, in accordance with Article 10 of the Financial Groups Directive (Competent authority responsible for exercising supplementary supervision (the coordinator)) Article 1(2) of the Financial Groups Directive Regulations, as the competent authority which is responsible for the co-ordination and exercise of supplementary supervision of that financial conglomerate. core UK group (1) (in relation to a BIPRU firm) all undertakings which, in relation to the firm, satisfy the conditions set out in BIPRU 3.2.25R (Zero risk-weighting for intra-group exposures: core UK group). (2) (in relation to an IFPRU investment firm) all counterparties which:
(a) are listed in the firm's core UK group permission; (b) satisfy the conditions in article 113(6) of the EU CRR UK CRR (Calculation of risk-weighted exposure amounts: intragroup); and (c) (unless it is an IFPRU limited-activity firm or IFPRU limited-licence firm, or an exempt IFPRU commodities firm to which article 493(1) of the EU CRR UK CRR (Transitional provision for large exposures) apply) for which exposures are exempted, under article 400(1)(f) of the EU CRR UK CRR (Large exposures: exemptions), from the application of article 395(1) of the EU CRR UK CRR (Limits to large exposures). core UK group permission a permission given by the FCA under article 113(6) of the EU CRR UK CRR (see IFPRU 8.1.14G to IFPRU 8.1.21G). corporate governance rules (in accordance with sections 73A(1) and 89O(1) of the Act) rules for the purpose of implementing, enabling the implementation of or dealing with matters arising out of or related to, any EU law

FCA 201X/XX obligation relating to the corporate governance of issuers who have requested or approved admission to trading of their securities and about corporate governance in relation to such issuers for the purpose of implementing, or dealing with matters arising out of or related to, any EU law obligation. The corporate governance rules are located in chapters 1B, 4 and 7 of DTR. countercyclical buffer rate (in accordance with article 128(7) of the CRD (Definitions)) the rate:
(a) expressed as a percentage of total risk exposure amount set by the UK countercyclical buffer authority or an EEA countercyclical buffer authority; or (b) expressed in terms equivalent to a percentage of total risk exposure amount set by a third-country countercyclical buffer authority, that a firm must apply in order to calculate its countercyclical capital buffer. [Note: article 128(7) of the CRD (Definitions)] countercyclical capital buffer (in accordance with article 128(2) of CRD (Definitions) regulation 2(1) (Interpretation) of the Capital Requirements (Capital Buffers and Macro-prudential Measures Regulations 2014)) the amount of common equity tier 1 capital a firm must calculate in line with IFPRU 10.3. counterparty credit risk (1) (in accordance with Part 1 of Annex III of the Banking Consolidation Directive (Definitions) and for the purposes of BIPRU) the risk that the counterparty to a transaction could default before the final settlement of the transaction's cash flows. (2) (other than in (1)) has the meaning as used in the EU CRR UK CRR. [Note: Part 1 of Annex III of the Banking Consolidation Directive (Definitions] covered bond (1) (in accordance with Article 52(4) of the UCITS Directive and except for the purposes of the IRB approach or the standardised approach to credit risk) a bond that is issued by a credit institution which has its registered office in the UK or an EEA State and is subject by law to special public supervision designed to protect bondholders and in particular protection under which sums deriving from the issue of the bond must be invested in conformity with the law in assets which, during the whole period of validity of the bond, are capable of covering claims attaching to the bond and which, in the event of failure of the issuer, would be used on a

FCA 201X/XX priority basis for the reimbursement of the principal and payment of the accrued interest. [Note: article 52(4) of the UCITS Directive] (2) (in accordance with point 68 of Part 1 of Annex VI of the Banking Consolidation Directive (Exposures in the form of covered bonds) and for the purposes of the IRB approach or the standardised approach to credit risk in BIPRU) a covered bond as defined in (1) collateralised in accordance with BIPRU 3.4.107R (Exposures in the form of covered bonds). that meets the following conditions:
(a) it is issued by a credit institution which has its registered office in the United Kingdom; and (b) it is collateralised in accordance with BIPRU 3.4.107R (Exposures in the form of covered bonds). [Note: point 68 of Part 1 of Annex VI of the Banking Consolidation Directive (Exposures in the form of covered bonds)] (3) … (4) for the purposes of INSPRU 2.1) a debenture that is issued by a credit institution which: [deleted] (a) has its head office in an EEA State; and (b) is subject by law to special official supervision designed to protect the holders of the debenture; in particular, sums deriving from the issue of the debenture must be invested in accordance with the law in assets which, during the whole period of validity of the debenture, are capable of covering claims attaching to the debenture and which, in the event of failure of the issuer, would be used on a priority basis for the reimbursement of the principal and payment of the accrued interest. CRD bank a bank which uses the EU CRR UK CRR to measure the capital requirement on its trading book. CRD credit institution (1) (except in COLL and FUND) a credit institution that has its registered office (or, if it has no registered office, its head office) in an EEA State the UK, excluding an institution to which the CRD does not apply under the UK provisions which implemented article 2 of the CRD (see also full CRD credit institution). (2) (in COLL and FUND) a credit institution that:

FCA 201X/XX
(a) has its registered office (or, if it has no registered office, its head office) in the UK, excluding an institution to which the CRD does not apply under the UK provisions which implemented article 2 of the CRD; or (b) has its registered office (or, if it has no registered office, its head office) in an EEA State, excluding an institution to which the CRD does not apply under
article 2 of the CRD.
CRD full-scope firm an investment firm as defined in article 4(1)(2) of the EU CRR UK CRR that is subject to the requirements imposed by the UK provisions that implemented MiFID (or which would be subject to that Directive those requirements if its head office were in an EEA State the UK) and that is not a limited activity firm or a limited licence firm. credit enhancement (1) (in accordance with Article 4(43) of the Banking Consolidation Directive (Definitions) and for the purposes of BIPRU) a contractual arrangement whereby the credit quality of a position in a securitisation (within the meaning of paragraph (2) of the definition of securitisation) is improved in relation to what it would have been if the enhancement had not been provided, including the enhancement provided by more junior tranches in the securitisation and other types of credit protection. [Note: article 4(43) of the Banking Consolidation Directive (Definitions)] … credit institution (1) (except in REC, SUP 11 and SUP 16):
(a) has the meaning in article 4(1)(1) of the EU CRR UK CRR; or (b) [deleted] (c) [deleted] (d) [deleted] (2) (in REC and in SUP 11 (Controllers and close links) and SUP 16 (Reporting requirements)):
(a) a credit institution authorised under the CRD which has permission under Part 4A of the Act to carry on the regulated activity of accepting deposits; or (b) an institution which would satisfy the requirements for authorisation as a credit institution under the CRD

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Part 4A of the Act if it had its registered office (or if it
does not have a registered office, its head office) in an EEA State the UK. (3) (in relation to the definition of electronic money issuer and payment service provider) a credit institution as defined by (1)(a) and includes a branch of the credit institution within the meaning of article 4(1)(17) of the EU CRR UK CRR which is situated within the EEA UK and which has its head office in a territory outside the EEA UK in accordance with article 47 of the CRD. [Note: article 47 of the CRD] (4) (in SUP 11) (Controllers and close links) a credit institution that has its registered office (or, if it has no registered office, its head office) in an EEA State, excluding an institution to which the CRD does not apply under article 2 of the CRD. credit risk mitigation (1) (in GENPRU (except in GENPRU 3) and BIPRU (except in BIPRU 12)) (in accordance with Article 4(30) of the Banking Consolidation Directive (Definitions)) a technique used by an undertaking to reduce the credit risk associated with an exposure or exposures which the undertaking continues to hold. [Note: article 4(30) of the Banking Consolidation Directive (Definitions)] (2) (except in (1)) has the meaning in article 4(1)(58) of the EU CRR UK CRR. critical functions activities, services or operations (wherever carried out) the discontinuance of which is likely, in one or more EEA States to lead to the disruption of essential services to the real economy of the UK or disrupt financial stability in the UK due to the:
… cross product netting (in accordance with Part 1 of Annex III of the Banking Consolidation Directive (Definitions) and for the purpose of BIPRU 13 (The calculation of counterparty risk exposure values for financial derivatives, securities financing transactions and long settlement transactions)) the inclusion of transactions of different product categories within the same netting set pursuant to the rules about cross product netting set out in BIPRU 13. [Note: Part 1 of Annex III of the Banking Consolidation Directive (Definitions)] CRR firm (for the purposes of SYSC) a UK bank, building society and an investment firm that is subject to the EU CRR UK CRR.

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CSDR the UK version of Regulation (EU) No 909/2014 of the European Parliament and of the Council of 23 July 2014 on improving securities settlement in the EU and on central securities depositories and amending the Settlement Finality Directive and MiFID and the short selling regulation, which is part of UK law by virtue of the EUWA. current approved person approval … (a) … (b) … A person treated as approved under section 59ZZA of the Act (as treated as being inserted into the Act by the EEA Passport Rights (Amendment, etc., and Transitional Provisions) (EU Exit) Regulations 2018 (SI 2018/[XXXX])) has a current approved person approval. current exposure (in accordance with Part 1 of Annex III of the Banking Consolidation Directive (Definitions) and for the purpose of BIPRU 13 (The calculation of counterparty risk exposure values for financial derivatives, securities financing transactions and long settlement transactions)) the larger of zero, or the market value of a transaction or portfolio of transactions within a netting set with a counterparty that would be lost upon the default of the counterparty, assuming no recovery on the value of those transactions in bankruptcy. [Note: Part 1 of Annex III of the Banking Consolidation Directive (Definitions)] current market value (in accordance with Part 1 of Annex III of the Banking Consolidation Directive (Definitions) and for the purpose of BIPRU 13.5 (CCR standardised method)) the net market value of the portfolio of transactions within the netting set with the counterparty; both positive and negative market values are used in computing current market value. [Note: Part 1 of Annex III of the Banking Consolidation Directive (Definitions)] custody asset (1) other than when acting as trustee or depositary of an AIF or acting as trustee or depositary of a UK UCITS:
…
(3) in relation to acting as trustee or depositary of a UK UCITS in CASS 6:
… deal on own account (1) (for the purposes of GENPRU and BIPRU) has the meaning in BIPRU 1.1.23R (Meaning of dealing on own account)

FCA 201X/XX which is in summary the service referred to in paragraph 3 of point 3 of Section A Annex I to MiFID Part 3 of Schedule 2 to the Regulated Activities Order, subject to the adjustments in BIPRU 1.1.23R(2) and BIPRU 1.1.23R(3) (Implementation of Article 5(2) of the Capital Adequacy Directive). (2) (other than in GENPRU and BIPRU) has the meaning in IFPRU 1.1.12R (Meaning of dealing on own account) which is, in summary, the service referred to in point 3 of Section A of Annex I to MiFID paragraph 3 of Part 3 of Schedule 2 to the Regulated Activities Order, subject to the adjustments in IFPRU 1.1.12R(2) and IFPRU 1.1.12R(3) (Implementation of
article 29(2) of CRD).
dealing on own account trading against proprietary capital resulting in the conclusion of transactions in one or more financial instruments. [Note: article 4(1)(6) 2(1)(5) of MIFID MiFIR] debt security … (2) (in DTR 4, DTR 5 and DTR 6) (in accordance with article 2.1(b) of the Transparency Directive) bonds or other forms of transferable securitised debts, with the exception of securities which are equivalent to shares in companies or which, if converted or if the rights conferred by them are exercised, give rise to a right to acquire shares or securities equivalent to shares. [Note: article 2.1(b) of the Transparency Directive] … deposit (1) (except in COMP) the investment, specified in article 74 and defined in articles 5(2) and 5(3) of the Regulated Activities Order, which is in summary: a sum of money (other than one excluded by any of articles 6 to 9 AB of the Regulated Activities Order) paid on terms:
…
[Editor’s note: The current policy intention for COLL is to reflect the current scope of these articles in the Regulated Activities Order. If amendments are made to the scope of these articles in the relevant statutory instrument, we will amend the drafting of this glossary term to deliver the stated policy outcome.] depositary (1) (except in LR):
…

FCA 201X/XX
(ca) (in relation to an EEA UCITS scheme) the person fulfilling the function of a depositary in accordance with article 2(1)(a) of the UCITS Directive; [deleted] … … (e) (for an AIF managed by a full-scope UK AIFM or a full-scope EEA AIFM (other than an AIF which is an ICVC, an AUT or an ACS)) the person fulfilling:
(i) the function of a depositary in accordance with
article 21(1) of AIFMD FUND 3.4.11R; or
(ii) one or more of the functions of cash monitoring, safekeeping or oversight for a nonEEA UK AIF, in line with FUND 3.11.33R(1)(a) (AIFM of a non-EEA UK AIF). … derivative (1) (other than in REC, MAR 5 and MAR 5A) a contract for differences, a future or an option (see also securitised derivative). [Editor’s note: The current policy intention for COLL is to reflect the current scope of these definitions, which in turn are defined by reference to articles in the Regulated Activities Order. Please refer to the individual glossary terms for further information.] (2) (in REC, MAR 5 and MAR 5A) has the meaning in article 2(1)(29) of MiFIR those financial instruments defined in
article 2 (1)(24)(c) of MiFIR or referred to in paragraphs 4 to
10 of Part 1 of Schedule 2 to the Regulated Activities Order. [Note: article 2(1)(29) of MiFIR] designated investment (1) a security or a contractually-based investment (other than a funeral plan contract and a right to or interest in a funeral plan contract) specified in Part III of the Regulated Activities Order (Specified Investments):
…
[Editor’s note: The current policy intention for COLL is to reflect the current scope of this Part of the Regulated Activities Order. If amendments are made to the scope of this

FCA 201X/XX
Part in the relevant statutory instrument, we will amend the
drafting of this glossary term to deliver the stated policy outcome.] … designated investment business any of the following activities, specified in Part II of the Regulated Activities Order (Specified Activities), which is carried on by way of business:
…
(ba) MiFID business bidding (part of bidding in emissions auctions) (article 24A); [deleted] … (p) managing a UK UCITS; (q) acting as trustee or depositary of a UK UCITS; … designated money market fund (in BIPRU 12 and BSOCS) a collective investment scheme authorised under the UCITS Directive or which is subject to supervision and, if applicable, authorised by an authority under the national law of an EEA State, and which an authorised fund which satisfies the following conditions:
… dilution risk (in accordance with Article 4(24) of the Banking Consolidation Directive (Definitions)) the risk that an amount receivable is reduced through cash or non-cash credits to the obligor. [Note: article 4(24) of the Banking Consolidation Directive (Definitions)] discretionary pension benefit (1) (in SYSC 19C) enhanced pension benefits granted on a discretionary basis by a firm to an employee as part of that employee’s variable remuneration package, but excluding accrued benefits granted to an employee under the terms of his company pension scheme. [Note: article 4(49) of the Banking Consolidation Directive] (2) (in IFPRU, SYSC 19A (IFPRU Remuneration Code) and SYSC 19D (Dual-regulated firms Remuneration Code)) has the meaning in article 4(1)(73) of the EU CRR UK CRR. distribution in connection with (in accordance with article 141(10) of CRD) includes:

FCA 201X/XX common equity tier 1 capital
(a) a payment of cash dividends;
(b) a distribution of fully or partly paid bonus shares or other capital instruments referred to in article 26(1)(a) of the EU CRR UK CRR (Common equity tier 1 items); (c) a redemption or purchase by a firm of its own shares or other capital instruments referred to in article 26(1)(a) of the EU CRR UK CRR (Common equity tier 1 items); (d) a repayment of amounts paid in connection with capital instruments referred to in article 26(1)(a) of the EU CRR UK CRR (Common equity tier 1 items); and (e) a distribution of items referred to in article 26(1)(b) to (e) of the EU CRR UK CRR (Common equity tier 1 items). [Note: article 141(10) of CRD] distribution of exposures (in accordance with Part 1 of Annex III of the Banking Consolidation Directive (Definitions) and for the purpose of BIPRU 13 (The calculation of counterparty risk exposure values for financial derivatives, securities financing transactions and long settlement transactions)) the forecast of the probability distribution of market values that is generated by setting forecast instances of negative net market values equal to zero. [Note: Part 1 of Annex III of the Banking Consolidation Directive (Definitions)] distribution of market values (in accordance with Part 1 of Annex III of the Banking Consolidation Directive (Definitions) and for the purpose of BIPRU 13 (The calculation of counterparty risk exposure values for financial derivatives, securities financing transactions and long settlement transactions)) the forecast of the probability distribution of net market values of transactions within a netting set for some future date (the forecasting horizon), given the realised market value of those transactions up to the present time. [Note: Part 1 of Annex III of the Banking Consolidation Directive (Definitions)] DLG by default … (ca) In the case of a group liquidity reporting firm that is within paragraph (a) of the definition of UK lead regulated firm (it is not part of a group that is subject to consolidated supervision by the FCA or the PRA or any other regulatory body), paragraph (c)(i) of the definition of DLG by default is

FCA 201X/XX amended so that it only includes a member of the firm's group that falls into one of the following categories:
(i) it is a credit institution; or
(ii) it is an investment firm or third country investment firm authorised to deal on own account. For these purposes:
(iii) credit institution has the meaning used in SUP 16 (Reporting requirements), namely either of the following:
(A) a credit institution authorised under the CRD or (B) an institution which would satisfy the requirements for authorisation as a credit institution under the UK provisions which implemented the CRD if it had its registered office (or if it does not have a registered office, its head office) in an EEA State the UK; and (iv) a person is authorised to deal on own account if:
(A) it is a firm and its permission includes that activity; or (B) it is an EEA firm and it is authorised by its Home State regulator to do that activity; or [deleted] (C) (if the carrying on of that activity is prohibited in a state or territory without an authorisation in that state or territory) that person has such an authorisation. … domestic UCITS merger (in COLL and in accordance with article 2(1)(r) of the UCITS Directive regulations 7 and 8 of the UCITS Regulations 2011) a UCITS merger between two or more UCITS schemes in relation to which a UCITS marketing notification has been made in respect of at least one of the relevant schemes. durable medium (a) paper; or (b) any instrument which enables the recipient to store information addressed personally to the recipient in a way accessible for future reference and for a period of time adequate for the purposes of the information and which allows the unchanged reproduction of the information stored. In relation to the equivalent business of a third country

FCA 201X/XX investment firm, MiFID optional exemption business or collective portfolio management, if the relevant rule derives from the MiFID Org Regulation or is a rule which implements implemented the UCITS Directive, the UCITS implementing Directive or the UCITS implementing Directive No 2 the instrument used must be:
(i) …
… early amortisation provision
(1) (in BIPRU) (in accordance with Article 100 of the Banking Consolidation Directive (Securitisation of revolving exposures) and in relation to a securitisation within the meaning of paragraph (2) of the definition of securitisation) a contractual clause which requires, on the occurrence of defined events, investors’ positions to be redeemed prior to the originally stated maturity of the securities issued. [Note: article 100 of the Banking Consolidation Directive (Securitisation of revolving exposures)] (2) (except in (1)) has the meaning in article 242(14) of the EU CRR UK CRR. ECAI (1) (except in MIPRU) an external credit assessment institution, as defined in article 4(1)(98) of the EU CRR UK CRR. (2) (in MIPRU) an external credit assessment institution. EEA AIF an AIF, other than a UK AIF, which:
(a) is authorised or registered in an EEA State under the applicable national law; or (b) is not authorised or registered in an EEA State but has its registered office or head office in an EEA State. EEA AIFM an AIFM which has its registered office in an EEA State other than the UK. EEA firm (in accordance with paragraph 5 of Schedule 3 to the Act (EEA Passport Rights)) any of the following, if it does not have its relevant office in the United Kingdom:
…
(h) a person who has received authorisation under article 18 of the EU auction regulation; …

FCA 201X/XX
EEA key investor information document a document that:
(a) relates to an EEA UCITS scheme;
(b) complies with the requirements of the KII Regulation Commission Regulation (EU) No 583/2010; and (c) is provided in a language stipulated by article 94(1)(b) of the UCITS Directive English. EEA MiFID investment firm a MiFID investment firm whose Home State is not the United Kingdom an EEA firm which would be a MiFID investment firm if it had its head office or registered office in the UK. EEA regulator (1) a competent authority for the purposes of any of the Single Market Directives or the EU auction regulation. (2) (in DEPP 7) (as defined in section 131FA of the Act) the competent authority of an EEA State other than the United Kingdom for the purposes of the short selling regulation. … EEA SMCR firm (a) … (b) any other SMCR firm that is an incoming EEA firm or incoming Treaty firm a TP firm. EEA State (in accordance with Schedule 1 to the Interpretation Act 1978), in relation to any time - (a) a state which at that time is a member State; or (b) any other state which is at that time a party to the EEA agreement. [Note: Current non-member State parties to the EEA agreement are Norway, Iceland and Lichtenstein. [Where the context requires, references to an EEA State include references to Gibraltar as appropriate.]] EEA UCITS management company any incoming EEA firm that is a management company established in the EEA. EEA UCITS Scheme a collective investment scheme established in accordance with the UCITS Directive in an EEA State other than the United Kingdom. effective expected exposure (in accordance with Part 1 of Annex III of the Banking Consolidation Directive (Definitions) and for the purpose of BIPRU 13 (The calculation of counterparty risk exposure values for financial derivatives, securities financing transactions and long settlement

FCA 201X/XX transactions) and as at a specific date) the maximum expected exposure that occurs at that date or any prior date; alternatively, it may be defined for a specific date as the greater of the expected exposure at that date, or the effective exposure at the previous date. [Note: Part 1 of Annex III of the Banking Consolidation Directive (Definitions)] effective expected positive exposure (in accordance with Part 1 of Annex III of the Banking Consolidation Directive (Definitions) and for the purpose of BIPRU 13) the weighted average over time of effective expected exposure over the first year, or, if all the contracts within the netting set mature before one year, over the time period of the longest maturity contract in the netting set, where the weights are the proportion that an individual expected exposure represents of the entire time interval. [Note: Part 1 of Annex III of the Banking Consolidation Directive (Definitions)] effective maturity (in accordance with Part 1 of Annex III of the Banking Consolidation Directive (Definitions), for the purpose of the CCR internal model method and with respect to a netting set with maturity greater than one year) the ratio of the sum of expected exposure over the life of the transactions in the netting set discounted at the risk-free rate of return divided by the sum of expected exposure over one year in a netting set discounted at the risk-free rate; this effective maturity may be adjusted to reflect rollover risk by replacing expected exposure with effective expected exposure for forecasting horizons under one year. [Note: Part 1 of Annex III of the Banking Consolidation Directive (Definitions)] efficient portfolio management (in COLL and in accordance with article 11 of the UCITS eligible assets Directive) techniques and instruments which relate to transferable securities and approved money-market instruments and which fulfil the following criteria:
…
[Note: article 11 of the UCITS eligible assets Directive] electronic commerce activity an activity which:
(a) consists of the provision of an information society service from an establishment in an EEA State the UK; and (b) is, or but for article 72A (Information society services) of the Regulated Activities Order (Information society services) (and irrespective of the effect of article 72 of that Order (Overseas persons)) would be, a regulated activity.

FCA 201X/XX electronic money issuer
(1) (except in DISP) any of the following persons when they issue electronic money:
…
(c) EEA authorised electronic money institutions; [deleted] … (f) the Bank of England, the European Central Bank and the national central banks of EEA States other than the United Kingdom, when not acting in their its capacity as a monetary authority or other public authority; … … eligible capital has the meaning in article 4(1)(71) of the EU CRR UK CRR. eligible institution (in COLL):
(a) a CRD credit institution authorised by its Home State regulator; (b) an MiFID investment firm authorised by the FCA or an EEA MiFID investment firm authorised by its Home State regulator. EMIR the UK version of Regulation (EU) No 648/2012 on OTC derivatives, central counterparties and trade repositories, which is part of UK law by virtue of the EUWA, sometimes referred to as the “European Markets Infrastructure Regulation”. EMIR indirect clearing RTS the UK version of Commission Delegated Regulation (EU) No 2017/2155 of 22 September 2017 amending Commission Delegated Regulation (EU) No 149/2013 of 19 December 2012 with regard to regulatory technical standards on indirect clearing arrangements, which is part of UK law by virtue of the EUWA. EMIR L2 Regulation the UK version of Commission Delegated Regulation (EU) No 149/2013 of 19 December 2012 supplementing Regulation (EU) No 648/2012 of the European Parliament and of the Council with regard to regulatory technical standards on indirect clearing arrangements, the clearing obligation, the public register, access to a trading venue, non-financial counterparties, and risk mitigation techniques for OTC derivatives contracts not cleared by a CCP, which is part of UK law by virtue of the EUWA.

FCA 201X/XX
EMIR requirements requirements imposed under EMIR and any onshored regulation made under it EU EMIR. EMIR technical standards on OTC derivatives means the UK version of “Commission Delegated Regulation (EU) 149/2013 of 19 December 2012 supplementing EMIR with regard to regulatory technical standards on indirect clearing arrangements, the clearing obligation, the public register, access to a trading venue, nonfinancial counterparties, and risk mitigation techniques for OTC derivatives contracts not cleared by a central counterparty”, which is
part of UK law by virtue of the EUWA.
energy market participant a firm:
…
(b) which is not an authorised professional firm, bank, BIPRU firm (unless it is an exempt BIPRU commodities firm), IFPRU investment firm (unless it is an exempt IFPRU commodities firm), building society, credit union, friendly society, ICVC, insurer, MiFID investment firm (unless it is an exempt BIPRU commodities firm or exempt IFPRU commodities firm), media firm, oil market participant, service company, insurance intermediary, home finance administrator, home finance provider, incoming EEA firm (without a top-up permission), or incoming Treaty firm (without a top-up permission) or regulated benchmark administrator. ESMA MAR delayed disclosure guidelines ESMA’s guidelines on ‘Delay in the disclosure of inside information’ (ESMA 2016/1478) dated 20 October 2016. These are available at:
https://www.esma.europa.eu/sites/default/files/library/2016- 1478_mar_guidelines_-_legitimate_interests.pdf. established (1) (in accordance with article 4(1)(j) AIFMD):
(a) for AIFMs, ‘having its registered office in’; (b) for AIFs, ‘being authorised or registered in’ or, if the AIF is not authorised or registered, ‘having its registered office in’; or (c) for depositaries of unauthorised funds only, ‘having its registered office or branch in’. [Note: article 4(1)(j) of AIFMD] (2) for a depositary of a UCITS scheme, ‘having its registered office or branch in’. EU the European Union, being the Union established by the Treaty on European Union signed at Maastricht on 7 February 1992 (as

FCA 201X/XX amended), taking into account the UK’s withdrawal from the Union pursuant to Article 50 of the Treaty. EU-adopted International Financial Reporting Standards (or EU adopted IFRS) international financial accounting standards within the meaning of EC Regulation No 1606/2002 of the European Parliament and of the Council of 19 July 2002 as adopted from time to time by the European Commission in accordance with that Regulation. EU UK CRR the UK version of Regulation of the European Parliament and the Council on prudential requirements for credit institutions and investment firms (Regulation (EU) No 575/2013) and amending Regulation (EU) No 648/2012, which is part of UK law by virtue of the EUWA. excess spread (for the purposes of BIPRU 9 (Securitisation), in relation to a securitisation (within the meaning of paragraph (2) of the definition of securitisation) and in accordance with Part 1 of Annex IX of the Banking Consolidation Directive (Securitisation definitions)) finance charge collections and other fee income received in respect of the securitised exposures net of costs and expenses. [Note: Part 1 of Annex IX of the Banking Consolidation Directive (Securitisation definitions)] exchange-traded fund a fund of which at least one unit or share class is traded throughout the day on at least one trading venue and with at least one market maker which takes action to ensure that the price of its units or shares on the trading venue does not vary significantly from its net asset value and, where applicable, from its indicative net asset value. [Note: article 4(1)(46) 2(26) of MiFID MiFIR] exchange traded product any of the following investments:
(a) a unit or share in an open-ended investment company, a debt security or a contract for differences which meets all of the following criteria:
(i) it is admitted to trading on a regulated market, an EU regulated market or a market operated by a ROIE; … excluded custody activities any activities of a firm which:
(a) are carried on in connection with, or for the purposes of, managing a UK UCITS or an AIF (as the case may be); and

FCA 201X/XX
(b) … exempt CAD firm (1) (except in SYSC and IPRU(INV)) a firm as defined in article 4(1)(2)(c) of the EU CRR UK CRR that is authorised to provide only one or more the following investment services:
(a) investment advice;
(b) receive and transmit orders from investors as referred to in Section A of Annex I of MiFID Part 3 of
Schedule 2 to the Regulated Activities Order.
(2) (in SYSC and IPRU(INV)) a firm in (1) whose head office (or, if it has a registered office, that office) is in the United Kingdom. exempt IFPRU commodities firm an IFPRU investment firm which falls within the meaning in articles 493(1) and 498(1) of the EU CRR UK CRR. expected exposure (in accordance with Part 1 of Annex III of the Banking Consolidation Directive (Definitions) and for the purpose of BIPRU 13 (The calculation of counterparty risk exposure values for financial derivatives, securities financing transactions and long settlement transactions)) the average of the distribution of exposures at any particular future date before the longest maturity transaction in the netting set matures. [Note: Part 1 of Annex III of the Banking Consolidation Directive (Definitions)] expected loss (in accordance with Article 4(29) of the Banking Consolidation Directive (Definitions) and for the purposes of the IRB approach and the standardised approach to credit risk) the ratio of the amount expected to be lost on an exposure from a potential default of a counterparty or dilution over a one year period to the amount outstanding at default. [Note: article 4(29) of the Banking Consolidation Directive (Definitions)] expected positive exposure (in accordance with Part 1 of Annex III of the Banking Consolidation Directive (Definitions) and for the purpose of BIPRU 13 (The calculation of counterparty risk exposure values for financial derivatives, securities financing transactions and long settlement transactions)) the weighted average over time of expected exposures where the weights are the proportion that an individual expected exposures represents of the entire time interval; when calculating the minimum capital requirement, the average is taken over the first year or, if all the contracts within the netting set mature before one year, over the time period of the longest-maturity contract in the netting set.

FCA 201X/XX
[Note: Part 1 of Annex III of the Banking Consolidation Directive (Definitions)] exposure (1) (in relation to a firm but subject to (2) and (6)) the maximum loss which the firm might suffer if:
(a) a counterparty or a group of connected counterparties fail to meet their obligations; or (a) it realises assets or off-balance sheet positions. (2) (in accordance with Article 77 of the Banking Consolidation Directive and for the purposes of the calculation of the credit risk capital component and the counterparty risk capital component (including BIPRU 3 (Standardised credit risk), BIPRU 4 (The IRB approach), BIPRU 5 (Credit risk mitigation), BIPRU 9 (Securitisation)) an asset or off-balance sheet item. [Note: article 77 of the Banking Consolidation Directive] … (4) (in IFPRU and to calculate own funds requirements under
Part Three Title II (credit risk and counterparty credit risk))
has the meaning in article 5(1) of the EU CRR UK CRR.
(5) (in IFPRU 8.2 (Large exposures) for the purpose of Part Four ((Large exposures) of the EU CRR UK CRR) has the meaning in article 389 of the EU CRR UK CRR (Large exposures:
definitions).
… external valuer a person who performs the valuation function described in article 19 of the AIFMD FUND 3.9.4R and 3.9.5R in respect of an AIF managed by a full-scope UK AIFM, and is not the AIFM of that AIF. extraordinary public financial support State aid within article 107(1) of the Treaty, or any other public financial support at supra-national level, which, if given at national level, would constitute state aid that is given to preserve or restore the viability, liquidity or solvency of any member of an RRD group has the meaning provided in section 3 of the Banking Act 2009. [Note: article 2(1)(28) of RRD] FCA consolidation group the undertakings included in the scope of prudential consolidation to the extent and in the manner prescribed in Part One, Title II, Chapter 2, Sections 2 and 3 of the EU CRR UK CRR and IFPRU 8.1.3 R to IFPRU 8.1.4 R (Prudential consolidation) for which the FCA is the consolidating supervisor under article 111 of the CRD regulation 20 of the Capital Requirements Regulations 2013.

FCA 201X/XX fee-paying electronic money issuer any of the following when they issue electronic money:
…
(c) an EEA authorised electronic money institution; [deleted]; (d) a full credit institution, including a branch of the full credit institution within the meaning of article 4(17) of the EU CRR UK CRR which is situated within the EEA in the United Kingdom and which has its head office in a territory outside the EEA United Kingdom in accordance with article 47 of the EU CRR UK CRR; … A full credit institution that is an EEA firm is only a fee-paying electronic money issuer if it is exercising an EEA right in accordance with Part II of Schedule 3 to the Act (Exercise of passport rights by EEA firms) to issue electronic money in the United Kingdom. An EEA authorised electronic money institution is only a fee-paying electronic money issuer if it is exercising a right under Article 3 of the Electronic Money Directive to issue electronic money in the United Kingdom. [deleted] fee-paying payment service provider any of the following when they provide payment services:
(a) a payment institution;
(b) a full credit institution;
(c) an electronic money issuer (except where it is an electronic money issuer whose only payment service activities are those relating to the issuance of electronic money by itself or if it is a credit union, a municipal bank or the National Savings Bank); (d) the Post Office Limited; (e) the Bank of England, other than when acting in its capacity as a monetary authority or carrying out functions of a public nature; and (f) government departments and local authorities, other than when carrying out functions of a public nature. A full credit institution that is an EEA firm is only a fee-paying payment service provider if it is exercising an EEA right in accordance with Part 2 of Schedule 3 to the Act (exercise of passport rights) to provide payment services in the United Kingdom. An EEA

FCA 201X/XX authorised payment institution or an EEA authorised electronic money institution is only a fee-paying payment service provider if it is exercising a right under Article 25 of the Payment Services Directive or Article 3 of the Electronic Money Directive to provide payment services in the United Kingdom. feeder AIF (in accordance with article 4(1)(m) of AIFMD) an AIF which:
…
[Note: article 4(1)(m) of AIFMD] feeder UCITS (in accordance with article 58(1) of the UCITS Directive):
(a) a UCITS scheme or a sub-fund of a UCITS scheme which has been approved by the FCA; or (b) an EEA UCITS scheme or a sub-fund of an EEA UCITS scheme which has been approved by the competent authority of the UCITS Home State; to invest at least 85% of its assets in the units of a single master UCITS. [Note: article 58(1) of the UCITS Directive] final response … (3) (in DISP) either:
(a) in relation to a MiFID complaint, a response in accordance with DISP 1.1A.29EUUK, DISP 1.1A.30EUUK and DISP 1.1A.31R; or (b) in relation to all other complaints, has the meaning given in DISP 1.6.2R(1). financial conglomerate (in accordance with Article 2(14) of the Financial Groups Directive (Definitions) Regulation 1(2) of the Financial Groups Directive Regulations) a consolidation group that is identified as a financial conglomerate by the financial conglomerate definition decision tree. financial holding company a financial institution that fulfils the following conditions:
(1) (except in (2)) has the meaning in article 4(1)(20) of the EU CRR UK CRR. (2) (in GENPRU (except GENPRU 3) and BIPRU (except BIPRU
12) a financial institution that fulfils the following conditions:

FCA 201X/XX
(a) its subsidiary undertakings are exclusively or mainly CAD investment firms or financial institutions; (b) at least one of those subsidiary undertakings is a CAD investment firm; and (c) it is not a mixed financial holding company. financial institution (1) (in accordance with paragraph 5(c) of Schedule 3 to the Act (EEA Passport Rights: EEA firm) and article 3 (22) of the CRD (Definitions)), but not for the purposes of GENPRU, BIPRU and IFPRU), an undertaking, other than a credit institution, the principal activity of which is to acquire holdings or to carry on one or more of the listed activities listed in points 2 to 12 and 15 of Annex I to the CRD, which is a subsidiary of the kind mentioned in article 34 of the CRD and which fulfils the conditions in that article [deleted] (2) for the purposes of GENPRU (except GENPRU 3), BIPRU (except in BIPRU 12) and in accordance with Articles 1(3) (Scope) and 4(5) (Definitions) of the Banking Consolidation Directive):
(a) an undertaking, other than a credit institution or an investment firm, the principal activity of which is to acquire holdings or to carry on one or more of the listed activities activities listed in points 2 to 12 and 15 of Annex I to the Banking Consolidation Directive
Annex 1 activities including the services and activities
provided for in Sections A and B of Annex I of the MIFID Parts 3 and 3A of Schedule 2 to the Regulated Activities Order when referring to financial instruments. the financial instruments provided for in
Section C of Annex I of that Directive
(b) (for the purposes of consolidated requirements) those institutions permanently excluded by listed in Article 2 of the Banking Consolidation Directive (Scope), with the exception of the Bank of England and the central banks of EEA States other countries. [Note: articles 1(3) (Scope) and 4(5) (Definitions) of the Banking Consolidation Directive)] (3) (except in (1) and (2) and subject to (4)) has the meaning in
article 4(1)(26) of the EU CRR UK CRR.
(4) (for the purposes of consolidated requirements in IFPRU and in accordance with article 2(6) of CRD) the following:

FCA 201X/XX
(a) financial institutions within the meaning in article 4(1)(26) of the EU CRR UK CRR; and (b) those institutions permanently excluded by article 2(5) of CRD (Scope) with the exception of the ESCB central banks as defined in article 4(1)(4546) of the EU CRR UK CRR. [Note: article 2(6) of CRD] financial instrument (1) (other than in (2), and (3) and (4)) instruments specified in
Section C of Annex I of MiFID, those instruments specified
in Part 1 of Schedule 2 to the Regulated Activities Order, that is:
…
(f) options, futures, swaps, and any other derivative contract relating to commodities that can be physically settled provided that they are traded on a regulated market, an MTF or an OTF, except for wholesale energy products (having regard to article 6 of the MiFID Org Regulation) traded on an OTF or an EU OTF that must be physically settled where the conditions of article 5 of the MiFID Org Regulation are met; (g) options, futures, swaps, forwards and any other derivative contracts relating to commodities, that can be physically settled not otherwise mentioned in (f) and:
(i) not being for commercial purposes or wholesale energy products traded on an EU OTF, having regard to article 7(4) of the MiFID Org Regulation; (ii) which have the characteristics of other derivative financial instruments, having regard to article 7(1) of the MiFID Org Regulation; and (iii) not being spot contracts having regard to articles 7 (1) and (2) of the MiFID Org Regulation; … (2) …

FCA 201X/XX
(3) (in IFPRU) has the meaning in article 4(50) of the EU CRR UK CRR. (4) (for a UCITS custodial asset) an instrument specified in
Section C of Annex I to MiFID. [deleted]
financial promotion …
(2) (in relation to COBS 3.2.1R(3) and COBS 4.3.1R) (in addition to (1)) a marketing communication within the meaning of the UK provisions which implemented MiFID made by a firm in connection with its MiFID, equivalent third country or optional exemption business. (3) (in MCOB 3A), in addition to (1), any advertising or marketing communications within the meaning of the UK provisions which implemented articles 10 or 11 of the MCD made by an MCD firm in relation to an MCD credit agreement. (4) (in ICOBS and in relation to a life policy, in COBS 3.2.1R(3) and COBS 4.3.1R), in addition to (1), any marketing communication within the meaning of the UK provisions which implemented article 17(2) of the IDD. [Note: articles 10 and 11 of the MCD. and article 17(2) of the IDD] financial sector entity has the meaning in article 4(1)(27) of the EU CRR UK CRR. Financial Services Register the public record, as required by section 347 of the Act (The public record), regulation 4 of the Payment Services Regulations (The register of certain payment service providers), regulation 4 of the Electronic Money Regulations and article 8 of the MCD Order, of every:
…
(aa) authorised payment institution and its EEA branches; … (aca) authorised electronic money institution and an EEA branch of an authorised electronic money institution; … FINREP firm (a) a credit institution or investment firm subject to article 99(2) of the EU CRR UK CRR that is also subject to article 4 of Regulation (EC) No 1606/2002; or

FCA 201X/XX
(b) a credit institution other than one referred to in article 4 of Regulation (EC) No 1606/2002 that prepares its consolidated accounts in conformity with the international accounting standards adopted in accordance with the procedure laid down in article 6(2) of that Regulation. [deleted] [Note: article 99 of the EU CRR UK CRR] foreign currency loan an MCD credit agreement where the credit is:
(a) denominated in a currency other than that in which the consumer receives the income or holds the assets from which the credit is to be repaid; or (b) denominated in a currency other than that of the EEA State in which the consumer is resident sterling. [Note: article 4(28) of the MCD] full CRD credit institution an undertaking whose business is to receive deposits or other repayable funds from the public and to grant credits for its own account and that has its registered office (or, if it has no registered office, its head office) in an EEA state the UK, excluding an institution to which CRD does did not apply under the UK provisions which implemented article 2 of CRD. full-scope UK AIFM a UK AIFM which:
(a) is not a small AIFM; or
(b) is a small AIFM but has opted in to AIFMD in accordance with article 3(4) of AIFMD exercised the option to meet the full requirements applying to a full-scope AIFM. funded credit protection (in accordance with Article 4(31) of the Banking Consolidation Directive (Definitions) and for the purposes of BIPRU) a technique of credit risk mitigation where the reduction of the credit risk on the exposure of an undertaking derives from the right of the undertaking, in the event of the default of the counterparty or on the occurrence of other specified credit events relating to the counterparty, to liquidate, or to obtain transfer or appropriation of, or to retain certain assets or amounts, or to reduce the amount of the exposure to, or to replace it with, the amount of the difference between the amount of the exposure and the amount of a claim on the undertaking. [Note: article 4(31) of the Banking Consolidation Directive (Definitions)] future the investment, specified in article 84 of the Regulated Activities Order (Futures), which is in summary: rights under a contract for the

FCA 201X/XX sale of a commodity or property of any other description under which delivery is to be made at a future date and at a price agreed on when the contract is made and futures and forwards to which article 84(1A), (1B), (1C), (1CA) or (1D) of the Regulated Activities Order applies. [Editor’s note: The current policy intention for COLL is to reflect the current scope of this article in the Regulated Activities Order. If amendments are made to the scope of this article in the relevant statutory instrument, we will amend the drafting of this glossary term to deliver the stated policy outcome.] general market risk (in accordance with paragraph 12 of Annex I of the Capital Adequacy Directive) the risk of a price change in an investment:
(a) (in relation to items that may or must be treated under BIPRU
7.2 (Interest Rate PRR)) owing to a change in the level of
interest rates; or
(b) (in relation to items that may or must be treated under BIPRU
7.3 (Equity PRR and basic interest rate PRR for equity
derivatives) except insofar as BIPRU 7.3 relates to the calculation of the interest rate PRR) owing to a broad equitymarket movement unrelated to any specific attributes of individual securities. [Note: paragraph 12 of Annex I of the Capital Adequacy Directive] general wrong-way risk (in accordance with Part 1 of Annex III of the Banking Consolidation Directive (Definitions) and for the purpose of BIPRU 13 (The calculation of counterparty risk exposure values for financial derivatives, securities financing transactions and long settlement transactions)) the risk that arises when the probability of default of counterparties is positively correlated with general market risk factors. [Note: Part 1 of Annex III of the Banking Consolidation Directive (Definitions)] government and public security the investment, specified in article 78 of the Regulated Activities Order (Government and public securities), which is in summary: a loan stock, bond or other instrument creating or acknowledging indebtedness, issued by or on behalf of:
…
[Editor’s note: The current policy intention for COLL is to reflect the current scope of this article in the Regulated Activities Order. If amendments are made to the scope of this article in the relevant statutory instrument, we will amend the drafting of this glossary term to deliver the stated policy outcome.] group …

FCA 201X/XX
(5) (in relation to a common platform firm) means the group of which that firm forms a part, consisting of a parent undertaking, its subsidiaries and the entities in which the parent undertaking or its subsidiaries hold a participation, as well as undertakings linked to each other by a consolidation
article 12(1) relationship within the meaning of Article 12(1)
of Directive 83/349/EEC on consolidated accounts.
… group of connected clients has the meaning given to it in article 4.1(39) of the EU CRR UK CRR. hedging set (in accordance with Part 1 of Annex III of the Banking Consolidation Directive (Definitions) and for the purpose of BIPRU 13 (The calculation of counterparty risk exposure values for financial derivatives, securities financing transactions and long settlement transactions)) a group of risk positions from the transactions within a single netting set for which only their balance is relevant for determining the exposure value under the CCR standardised method. [Note: Part 1 of Annex III of the Banking Consolidation Directive (Definitions] Home State … (4) (in relation to an insurance undertaking with an EEA right) the EEA State in which the registered office of the insurance undertaking is situated. [deleted] … (7) (in relation to a Treaty firm) the EEA State in which its head office is situated, in accordance with paragraph 1 of Schedule 4 to the Act (Treaty Rights). [deleted] (8) (in LR and PR) (as defined in section 102C of the Act) in relation to an issuer of transferable securities, the EEA State which is the “home Member State” for the purposes of the prospectus directive (which is to be determined in accordance with Article 2.1(m) of that directive). [deleted] (9) (in DTR): [deleted] (a) in the case of an issuer of debt securities the denomination per unit of which is less than EUR 1 000 or an issuer of shares:
(ii) where the issuer is incorporated in the EEA, the EEA State in which it has its registered office;

FCA 201X/XX
(ii) where the issuer is incorporated in a third country, the EEA State chosen by the issuer from among the EEA States where its securities are admitted to trading on a regulated market; the choice of Home State shall remain valid unless the issuer has chosen a new Home State under (c) and has disclosed the choice in accordance with DTR 6.4.2R and DTR 6.4.3R. The definition of Home State shall be applicable to debt securities in a currency other than Euro, provided that the value of such denomination per unit is, at the date of the issue, less than EUR 1 000, unless it is nearly equivalent to EUR 1 000; (b) for an issuer not covered by (a), the EEA State chosen by the issuer from among the EEA States in which the issuer has its registered office, where applicable, and those EEA States where its securities are admitted to trading on a regulated market. The issuer may choose only one EEA State as its Home State. Its choice shall remain valid for at least three years unless its securities are no longer admitted to trading on any regulated market in the EEA or unless the issuer becomes covered by (a) or (c) during the three year period; (c) for an issuer whose securities are no longer admitted to trading on a regulated market in its Home State as defined by (a)(ii) or (b) but instead are admitted to trading in one or more other EEA States, such new Home State as the issuer may choose from among the EEA States where its securities are admitted to trading on a regulated market and, where applicable, the EEA State where the issuer has its registered office. In the absence of disclosure by the issuer of its Home State as defined by (a)(ii) or (b) within a period of three months from the date that the issuer’s securities are first admitted to trading on a regulated market, the Home State shall be determined in accordance with DTR 6.4.4R. … (11) (in REC) in relation to an EEA market operator, the EEA State in which it has its registered office, or if it has no registered office, its head office. [deleted] (12) (in relation to a person who has received authorisation under
article 18 of the EU auction regulation) the EEA state in

FCA 201X/XX which the person is established and authorised under the EU auction regulation. … Home State regulator (1) (in relation to an EEA firm) (as defined in paragraph 9 of
Schedule 3 to the Act (EEA Passport Rights)) the competent
authority (under the relevant Single Market Directive or the EU auction regulation) of an EEA State (other than the United Kingdom) in relation to the EEA firm concerned. (2) (in relation to a UK firm or UCITS scheme) the FCA or PRA as the case may be. [deleted] (3) (in relation to a Treaty firm) (as defined in paragraph 1 of
Schedule 4 to the Act (Treaty Rights)) the competent
authority of the firm's Home State for the purpose of its Home State authorisation. [deleted] … Host State (1) (in LR and PR) as defined in Article 2.1(n) of the Prospectus Directive) the EEA State where an offer to the public is made or admission to trading is sought, when different from the Home State. [deleted] (1A) (in DTR) an EEA State in which securities are admitted to trading on a regulated market, if different from the Home State. [deleted] (2) (except in LR, PR and DTR and except in relation to MiFID) the EEA State in which an EEA firm, a UK firm, or a Treaty firm is exercising an EEA right or Treaty right to establish a branch or provide cross border services. [deleted] … (4) (in relation to the UCITS Directive) the EEA State, other than the UCITS Home State, in which units of a UCITS are marketed in accordance with a notification made under article 93 of that directive. [deleted] … Host State regulator (1) (in relation to an EEA firm or a Treaty firm exercising an EEA right or Treaty right in the United Kingdom) the FCA or PRA as the case may be. [deleted] (2) (in relation to a UK firm) (as defined in paragraph 11 of
Schedule 3 to the Act (EEA Passport Rights)) the competent
authority (under the relevant Single Market Directive or the auction regulation) of an EEA State (other than the United

FCA 201X/XX
Kingdom) in relation to a UK firm’s exercise of EEA rights there. [deleted] (3) … (4) (in relation to an EEA UCITS scheme which is a recognised scheme) the FCA. [deleted] (5) (in relation to a UCITS that is the subject of a notification in accordance with article 93 of the UCITS Directive) the competent authority of an EEA State (other than the United Kingdom) in which units of the UCITS may be marketed to the public. [deleted] ICD claim a claim:
(a) against a MiFID investment firm (including a credit institution which is a MiFID investment firm), whether established in the United Kingdom or in another EEA State (or, where applicable, a successor of such a firm); and … IDD Insurance Distribution Directive, Directive (EU) 2016/97 of the European Parliament and of the Council of 20 January 2016 on insurance distribution (recast). [Note: See http://eur-lex.europa.eu/eli/dir/2016/97/oj] IDD IPID Regulation the UK version of Commission Implementing Regulation (EU) 2017/1469 of 11 August laying down a standardised presentation format for the insurance product information document, which is part of UK law by virtue of the EUWA. [Note: See http://eur-lex.europa.eu/eli/reg_impl/2017/1469/oj] IDD POG Regulation the UK version of Commission Delegated Regulation (EU) No 2017/2358 of 21 September 2017, supplementing the IDD of the European Parliament and of the Council with regard to product oversight and governance requirements for insurance undertakings and insurance distributors, which is part of UK law by virtue of the EUWA. IDD Regulation the UK version of Commission Delegated Regulation (EU) 2017/2359 of 21 September 2017, supplementing the IDD of the European Parliament and of the Council with regard to information requirements and conduct of business rules applicable to the distribution of insurance–based investment products, which is part of UK law by virtue of the EUWA.

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IFPRU investment firm an investment firm, as defined in article 4(1)(2) of the EU CRR UK CRR (including a collective portfolio management investment firm), that satisfies the following conditions:
(a) it is a firm;
(b) its head office is in the UK and it is not otherwise excluded under IFPRU 1.1.5R; and (c) it is not a designated investment firm; that is not excluded under IFPRU 1.1.5R (Exclusion of certain types of firms). IFR the UK version of Regulation (EU) 2015/751 of the European Parliament and of the Council of 29 April 2015 on interchange fees for card-based payment transactions, which is part of UK law by virtue of the EUWA. IFR transactions by acquirers operating in the United Kingdom all transactions subject to the IFR acquired by:
(a) UK-based acquirers (or an operator acting as such an acquirer) resulting in payments to merchants located in the United Kingdom UK, where the card issuer is located in the EEA UK; (b) UK-based acquirers (or an operator acting as such an acquirer) resulting in payments to merchants located outside the United Kingdom UK, where the card issuer is located in the EEA UK; and (c) non-UK-based acquirers (or an operator acting as such an acquirer) resulting in payments to merchants located in the United Kingdom UK, where the card issuer is located in the EEA UK. IFR transactions by card issuers operating in the United Kingdom all transactions subject to the IFR on cards issued by UK-based card issuers (or an operator acting as such an a card issuer), where the acquirer is located in the EEA UK. injured party (in ICOBS) a resident of the United Kingdom or the EEA entitled to compensation in respect of any loss or injury caused by vehicles. [Note: article 1(2) of Directive 72/166/EC (First Motor Insurance Directive)] initial capital (1) [deleted] (2) [deleted]

FCA 201X/XX
(3) [deleted]
(3A) (in IPRU(INV) 11 and in accordance with article 28(1) of the CRD) the amount of own funds referred to in article 26(1)(a) to (e) of the EU CRR UK CRR and calculated in line with Part Two of those Regulations (Own funds). [Note: article 28(1) of the CRD] (4) (in the case of a BIPRU firm) capital resources included in stage A (Core tier one capital) of the capital resources table plus capital resources included in stage B of the capital resources table (Perpetual non-cumulative preference shares);. (5) (in the case of an institution that is an EEA firm) capital resources calculated in accordance with the CRD implementation measures of its Home State for Article 4 of the Capital Adequacy Directive (Definition of initial capital) or Article 9 of the Banking Consolidation Directive (Initial capital requirements); [deleted] (6) (for the purposes of the definition of dealing on own account in BIPRU and in the case of an undertaking not falling within (3) or (4)) capital resources calculated in accordance with (3) and paragraphs (3) and (4) of the definition of capital resources. (7) (in IPRU(INV) 13) the initial capital of a firm calculated in accordance with IPRU(INV) 13.1A.6R. (8) (for an IFPRU investment firm and in accordance with article 28(1) of CRD) the amount of own funds referred to in article 26(1)(a) to (e) of the EU CRR UK CRR and calculated in accordance with Part Two of those Regulations (Own funds). [Note: article 28(1) of CRD] (9) (for the purpose of the definition of dealing on own account in IFPRU) the amount of own funds referred to in article 26(1)(a) to (e) of the EU CRR UK CRR and calculated in accordance with Part Two of those Regulations (Own funds). institution (1) has the meaning in article 4(1)(3) of the EU CRR UK CRR). (2) (for the purposes of GENPRU and BIPRU) includes a CAD investment firm. instrument constituting the fund …

FCA 201X/XX
(ba) (in relation to an EEA UCITS scheme) the fund rules or instrument of incorporation of such a scheme; [deleted] … insurance-based investment product a contract of insurance which offers a maturity or surrender value and where that maturity or surrender value is wholly or partially exposed, directly or indirectly, to market fluctuations, and does not include:
…
(d) officially recognised occupational pension schemes falling under the scope of the UK provisions which implemented Directive 2003/41/EC or the UK provisions which implemented Directive 2009/138/EC; … insurance holding company (1) a parent undertaking, other than an insurance undertaking, the main business of which is to acquire and hold participations in subsidiary undertakings and which fulfils the following conditions:
(a) its subsidiary undertakings are either exclusively or mainly insurance undertakings; and (b) at least one of those subsidiary undertakings is an insurer or an EEA firm that is a regulated insurance entity or a reinsurance undertaking; a parent undertaking, other than an insurance undertaking, that fulfils the conditions in paragraphs (1)(a) and (b) of this definition is not an insurance holding company if:
(c) it is a mixed financial holding company; and (d) notice has been given in accordance with Article 4(2) of the Financial Groups Directive Regulation 2 of the Financial Groups Directive Regulations that the financial conglomerate of which it is a mixed financial holding company is a financial conglomerate. insurance sector a sector composed of one or more of the following entities:
(a) “Solvency II undertaking” “UK Solvency II firm” as defined in the PRA Rulebook: Glossary;

FCA 201X/XX
… insurance special purpose vehicle an undertaking whether incorporated or not, which has received authorisation in accordance with the UK provisions which implemented article 211(1) or (3) of the Solvency II Directive and:
(a) which assumes risks from an insurer or a regulated insurance entity; and … interest-rate contract interest-rate contracts listed in paragraph 1 of Annex II to the EU CRR UK CRR. internal approaches one or more of the following, as referred to in the EU CRR UK CRR:
(a) the Internal Ratings Based Approach in article 143(1); (b) the Internal Models Approach in article 221; (c) the own estimates approach in article 225; (d) the Advanced Measurement Approaches in article 312(2); (e) the Internal Model Method and internal models in articles 283 and 363; and (f) the internal assessment approach in article 259(3). EU-adopted international accounting standards means the international accounting standards, within the meaning of of EC Regulation No. 1606/2002 of the European Parliament and of the Council of 19 July 2002 on the application of international accounting standards, adopted from time to time by the European Commission in accordance with that Regulation. EU-adopted International Financial Reporting Standards international financial accounting standards within the meaning of EC Regulation No 1606/2002 of the European Parliament and of the Council of 19 July 2002 as adopted from time to time by the European Commission in accordance with that Regulation. intra-group transactions (in accordance with Article 2(18) of the Financial Groups Directive (Definitions)) all transactions by which regulated entities within a financial conglomerate rely either directly or indirectly upon other undertakings within the same financial conglomerate or upon any person linked to the undertakings within that financial conglomerate by close links, for the fulfilment of an obligation whether or not contractual, and whether or not for payment. [Note: article 2(18) of the Financial Groups Directive (Definitions)] investment firm (1) any person whose regular occupation or business is the provision of one or more investment services to third parties

FCA 201X/XX and/or the performance of one or more investment activities on a professional basis. [Note: article 4(1)(1) of MiFID 2(1A) of MiFIR] (2) (in REC) a MiFID investment firm, or a person who would be a MiFID investment firm if it had its head office in the EEA UK. (3) (in the definition of IDD ancillary insurance intermediary, and IFPRU and BIPRU 12) has the meaning in article 4(1)(2) of the EU CRR UK CRR. [Note: article 2(1)(4) of the IDD] … investment management firm a firm whose permitted activities include designated investment business, which is not an authorised professional firm, bank, IFPRU investment firm, BIPRU firm, collective portfolio management firm, credit union, energy market participant, friendly society, ICVC, insurer, media firm, oil market participant, or service company, incoming EEA firm (without a top-up permission), incoming Treaty firm (without a top-up permission), or UCITS qualifier (without a topup permission), whose permission does not include a requirement that it comply with IPRU-INV 3 or IPRU-INV 13 (Personal investment firms) and which is within (a), (b) or (c):
…
(c) a firm:
…
(ii) for which the most substantial part of its gross income (including commissions) from the designated investment business included in its Part 4A permission is derived from one or more of the following activities (based, for a firm given a Part 4A permission after commencement, on the business plan submitted as part of the firm’s application for permission or, for a firm authorised under section 25 of the Financial Services Act 1986, on the firm's financial year preceding its authorisation under the Act):
…
(D c) acting as a trustee or depositary of a UK UCITS; …

FCA 201X/XX investment service any of the following involving the provision of a service in relation to a financial instrument: any of the services listed in Part 3 of Schedule 2 to the Regulated Activities Order, relating to any of the instruments listed in Part 1 of Schedule 2 to that order, that is:
…
[Note: article 4(1)(2) 2(2) of, and section A of Annex 1 to, MiFID and
article 6(5) of the auction regulation MiFIR]
investment services and/or activities any of the services and activities listed in Section A of Annex I to MiFID relating to any financial instrument any of the services and activities listed in Part 3 of Schedule 2 to the Regulated Activities Order, relating to any of the instruments listed in Part 1 of Schedule 2 to that order, that is:
…
[Note: article 4(1)(2) 2(2) of, and section A of Annex 1 to, MiFID and
article 6(5) of the auction regulation MiFIR]
investment trust a company which:
(a) is approved by the Commissioners for HM Revenue and Customs under sections 1158 and 1159 of the Corporation Tax Act 2010 (or, in the case of a newly formed company, has declared its intention to conduct its affairs so as to obtain such approval); or (b) (for the purposes of the definitions of non-mainstream pooled investment and packaged product only) is resident in an EEA State other than the United Kingdom and would qualify for such approval if resident in the United Kingdom. IRB permission an Article 129 implementing measure, a requirement or a waiver that requires a BIPRU firm or a CAD investment firm to use the IRB approach. key investor information (1) (for a UCITS) key information for investors on the essential elements of a UCITS scheme or EEA UCITS scheme, as detailed in article 78 of the UCITS Directive and in the KII Regulation. (2) … KII Regulation the UK version of Commission Regulation (EU) No 583/2010, specifying the form and contents of key investor information, the text of which is reproduced in COLL Appendix 1EU Appendix 1UK, which is part of UK law by virtue of the EUWA.

FCA 201X/XX
KIRB (for the purposes of BIPRU 9 (Securitisation), in relation to a securitisation (within the meaning of paragraph (2) of the definition of securitisation) and in accordance with Part 1 of Annex IX of the Banking Consolidation Directive (Securitisation definitions)) 8% of the risk weighted exposure amounts that would be calculated under the IRB approach in respect of the securitised exposures, had they not been securitised, plus the amount of expected losses associated with those exposures calculated under the IRB approach. [Note: Part 1 of Annex IX of the Banking Consolidation Directive (Securitisation definitions)] large exposure (1) (in BIPRU) the exposure of a firm to a counterparty, or a group of connected clients, whether in the firm’s non-trading book or trading book or both, which in aggregate equals or exceeds 10% of the firm's capital resources. (2) (except in (1)) has the meaning in article 392 of the EU CRR UK CRR (Definition of a large exposure). lending firm (in accordance with Article 90 of the Banking Consolidation Directive (Credit risk mitigation) and for the purposes of rules in BIPRU about credit risk mitigation) a firm that has an exposure, whether or not deriving from a loan. [Note: article 90 of the Banking Consolidation Directive (Credit risk mitigation)] leverage (in accordance with article 4(1)(v) of AIFMD) any method by which an AIFM increases the exposure of an AIF it manages whether through borrowing of cash or securities, or leverage embedded in derivative positions or by any other means. [Note: article 4(1)(v) of AIFMD] limited activity firm has the meaning in article 96(1) of the EU CRR UK CRR. limited licence firm has the meaning in article 95(1) of the EU CRR UK CRR. liquidity facility (for the purposes of BIPRU 9 (Securitisation), in relation to a securitisation (within the meaning of paragraph (2) of the definition of securitisation) and in accordance with Part 1 of Annex IX of the Banking Consolidation Directive (Securitisation definitions)) the securitisation position arising from a contractual agreement to provide funding to ensure timeliness of cash-flows to investors. [Note: Part 1 of Annex IX of the Banking Consolidation Directive (Securitisation definitions)] liquidity risk (1) (in COLL and in accordance with article 3(8) of the UCITS implementing Directive) the risk that a position in a UCITS' portfolio cannot be sold, liquidated or closed out at limited

FCA 201X/XX cost in an adequately short timeframe and that the ability of the scheme to comply at any time with COLL 6.2.16R (Sale and redemption) or, in the case of an EEA UCITS scheme,
article 84(1) of the UCITS Directive is thereby compromised.
[Note: article 3(8) of the UCITS implementing Directive] … listed activity an activity listed in Annex 1 to the CRD the Annex 1 Activities. local firm has the meaning in article 4(1)(4) of the EU CRR UK CRR. long settlement transaction (in accordance with Part 1 of Annex III of the Banking Consolidation Directive (Definitions)) a transaction where a counterparty undertakes to deliver a security, a commodity, or a foreign currency amount against cash, other CRD financial instruments, or commodities, or vice versa, at a settlement or delivery date that is contractually specified as more than the lower of the market standard for this particular transaction and five business days after the date on which the person enters into the transaction. [Note: Part 1 of Annex III of the Banking Consolidation Directive (Definitions)] loss (in accordance with Article 4(26) of the Banking Consolidation Directive (Definitions) and for the purposes of the IRB approach, the standardised approach to credit risk and BIPRU 5 (Credit risk mitigation)) economic loss, including material discount effects, and material direct and indirect costs associated with collecting on the instrument. [Note: article 4(26) of the Banking Consolidation Directive (Definitions)] (1) (in BIPRU and in accordance with Article 4(26) of the Banking Consolidation Directive (Definitions) and for the purposes of the IRB approach, the standardised approach to credit risk and BIPRU 5 (Credit risk mitigation)) economic loss, including material discount effects, and material direct and indirect costs associated with collecting on the instrument. [Note: article 4(26) of the Banking Consolidation Directive (Definitions)] (2) (except in (2)) has the meaning in article 5(1) of the EU CRR UK CRR. loss given default (in accordance with Article 4(27) of the Banking Consolidation Directive (Definitions) and in relation to the IRB approach) the ratio of the loss on an exposure due to the default of a counterparty to the amount outstanding at default.

FCA 201X/XX
[Note: article 4(27) of the Banking Consolidation Directive (Definitions)] low frequency liquidity reporting firm … (c) a standard ILAS BIPRU firm that meets the following conditions:
(i) it does not have any annual report and accounts and it has been too recently established to be required to have produced any; (ii) it has submitted a projected balance sheet to the FCA or PRA (as the case may be) as part of an application for a Part 4A permission or a variation of one; and (iii) the most recent such balance sheet shows that the firm will meet the size condition set out in (b) in all periods covered by those projections. In respect of an incoming EEA firm or a third country BIPRU firm that is also a standard ILAS BIPRU firm and which reports on the basis of its branch operation in the United Kingdom, if the balance sheet assets attributable to the UK branch can be determined from the firm’s most recent annual report and accounts (or, if applicable, the projected balance sheet) or any data item submitted by the firm, then paragraphs (b) and (c) apply at the level of the branch rather than of the firm. management body (1) (other than in (2)) (in accordance with article 3(7) of CRD and article 4(1)(36) of MiFID 4(1)(9) of the UK CRR) the governing body and senior personnel who are empowered to set the person’s strategy, objectives and overall direction, and which oversee and monitor management decision-making in the following:
(a) a common platform firm (in relation to the requirements imposed by or under the UK provisions which implemented MiFID or MiFIR); or (b) a recognised investment exchange; or (c) a data reporting services provider. [Note: article 4(1)(36) of MiFiD] (2) (in COLL and in SYSC 19E and in accordance with article 2(1)(s) of the UCITS Directive), the governing body of a management company or depositary of a UCITS scheme or an EEA UCITS scheme, as applicable, with ultimate decisionmaking authority comprising the supervisory and the

FCA 201X/XX managerial function or only the managerial function, if the two functions are separated. [Note: article 2(1)(s) of the UCITS Directive] management company (in accordance with article 2(1)(b) of the UCITS Directive) a company, the regular business of which is the management of UCITS in the form of unit trusts, common funds (including authorised contractual schemes) or investment companies (collective portfolio management), including, where permitted by its Home State regulator, the additional services referred to in article 6(3) of that directive. as defined in section 237(2) of the Act, that is:
(1) a company, the regular business of which is:
(a) the management of UK UCITS; or
(b) the management of other collective investment undertakings which are not UK UCITS (and whose units cannot be marketed as such) and for which the management company is subject to prudential supervision, where undertaken in addition to the activity in sub-paragraph (a). (2) For the purposes of paragraph 1(a) above, the regular business of a management company may include the following services, where permitted by the FCA and where undertaken in addition to the activity in paragraph 1 (a) above:
(a) management of portfolios of investments, including those owned by pension funds, in accordance with mandates given by investors on a discretionary, clientby-client basis, where such portfolios include one or more financial instruments; and (b) the following non-core services, where provided in addition to the services in paragraph 2(a) above:
(i) investment advice concerning one or more financial instruments; (ii) safekeeping and administration in relation to units of collective investment undertakings. (3) For the purposes of paragraph 1(b) above, the management of other collective investment schemes includes the functions referred to in schedule 6 of the Regulated Activities Order. manager (1) (in relation to an AUT) the firm, including, if relevant, an EEA UCITS management company or incoming EEA AIFM which is the manager of the AUT in accordance with the trust deed.

FCA 201X/XX
(1A) (in relation to an OEIC which is an undertaking for collective investment in transferable securities within the meaning of the UCITS Directive a UK UCITS or which is an AIF, and which has appointed a person to manage the scheme) the person appointed to manage the scheme. … managing a UK UCITS the regulated activity, specified in article 51ZA of the Regulated Activities Order of carrying on collective portfolio management within the meaning of the UCITS Directive, in relation to an a UK UCITS. margin agreement (in accordance with Part 1 of Annex III of the Banking Consolidation Directive (Definitions) and for the purpose of BIPRU 13 (The calculation of counterparty risk exposure values for financial derivatives, securities financing transactions and long settlement transactions)) a contractual agreement or provisions to an agreement under which one counterparty must supply collateral to a second counterparty when an exposure of that second counterparty to the first counterparty exceeds a specified level. [Note: Part 1 of Annex III of the Banking Consolidation Directive (Definitions)] margin lending transaction (in accordance with Part 1 of Annex III of the Banking Consolidation Directive (Definitions) and for the purpose of BIPRU 13 (The calculation of counterparty risk exposure values for financial derivatives, securities financing transactions and long settlement transactions)) transactions in which a person extends credit in connection with the purchase, sale, carrying or trading of securities; the definition does not include other loans that happen to be secured by securities collateral. [Note: Part 1 of Annex III of the Banking Consolidation Directive (Definitions)] margin period of risk (in accordance with Part 1 of Annex III of the Banking Consolidation Directive (Definitions) and for the purpose of BIPRU 13 (The calculation of counterparty risk exposure values for financial derivatives, securities financing transactions and long settlement transactions)) the time period from the last exchange of collateral covering a netting set of transactions with a defaulting counterpart until that counterpart is closed out and the resulting market risk is rehedged. [Note: Part 1 of Annex III of the Banking Consolidation Directive (Definitions)] margin threshold (in accordance with Part 1 of Annex III of the Banking Consolidation Directive (Definitions) and for the purpose of BIPRU 13 (The calculation of counterparty risk exposure values for financial

FCA 201X/XX derivatives, securities financing transactions and long settlement transactions)) the largest amount of an exposure that remains outstanding until one party has the right to call for collateral. [Note: Part 1 of Annex III of the Banking Consolidation Directive (Definitions)] Market Abuse Regulation the UK version of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC, which is part of UK law by virtue of the EUWA. marketing (1) … (2) (except in COLL) a direct or indirect offering or placement, at the initiative of the AIFM or on behalf of the AIFM of units or shares of an AIF it manages, to or with investors domiciled or with a registered office in the EEA UK. [Note: article 4(1)(x) of AIFMD] market maker (1) … (2) (in COBS and DTR) a person who holds himself or herself out on the financial markets on a continuous basis as being willing to deal on own account by buying and selling financial instruments against his that person’s proprietary capital at prices defined by him that person. [Note: article 4(1)(7) 2(1)(6) of MiFID MiFIR] (3) [deleted] (4) (in DTR) a person who holds himself or herself out on the financial markets on a continuous basis as being willing to deal on own account by buying and selling financial instruments against that person’s proprietary capital at prices defined by that person. market making activities (as defined in article 2(1)(k) of the short selling regulation) the activities of an investment firm, a credit institution, a third-country entity, or a firm as referred to in point (l) of article 2(1) of MIFID, which is a member of a trading venue or of a market in a third country, the legal and supervisory framework of which has been declared equivalent by the European Commission pursuant to article 17(2) of the short selling regulation where it deals as principal in a financial instrument, whether traded on or outside a trading venue, in any of the following capacities:

FCA 201X/XX
(a) by posting firm, simultaneous two-way quotes of comparable size and at competitive prices, with the result of providing liquidity on a regular and ongoing basis to the market; or (b) as part of its usual business, by fulfilling orders initiated by clients or in response to clients’ requests to trade; or (c) by hedging positions arising from the fulfilment of tasks under points (a) and (b). (as defined in article 2(1)(k) of the short selling regulation) means the activities of an investment firm, a credit institution, a third-country entity, or a firm as referred to in point (ka), which is a member of a trading venue or of a market in a third country, the legal and supervisory framework of which has been declared equivalent by the Commission pursuant to Article 17(2) before exit day, or by the Treasury in accordance with that paragraph as amended, or with regulation 16 of the Short Selling (EU Exit) (Amendment) Regulations 2018, where it deals as principal in a financial instrument, whether traded on or outside a trading venue, in any of the following capacities:
(i) by posting firm, simultaneous two-way quotes of comparable size and at competitive prices, with the result of providing liquidity on a regular and ongoing basis to the market; (ii) as part of its usual business, by fulfilling orders initiated by clients or in response to clients’ requests to trade; or (iii) by hedging positions arising from the fulfilment of tasks under points (i) and (ii). [Note: Point 2(1)(ka) of the short selling regulation provides: For the purposes of point (k), the firms referred to in this point are firms which provide investment services and/or perform investment activities consisting exclusively in dealing on own account on markets in financial futures or options or other derivatives and on cash markets for the sole purpose of hedging positions on derivatives markets or which deal for the accounts of other members of those markets or make prices for them and which are guaranteed by clearing members of the same markets, where responsibility for ensuring the performance of contracts entered into by such firms is assumed by clearing members of the same markets.] market operator a person or persons who manages and/or operates the business of a regulated market and who may be the regulated market itself. [Note: article (4)(1)(18) MiFID 2(1)(10) of MiFIR]

FCA 201X/XX master AIF (in accordance with article 4(1)(y) of AIFMD) an AIF in which another AIF (a feeder AIF) invests or has an exposure in accordance with the definition of ‘feeder AIF’. [Note: article 4(1)(y) of AIFMD] master UCITS (in accordance with article 58(3) of the UCITS Directive) a UCITS scheme, an EEA UCITS scheme or a sub-fund of such a scheme where:
(a) at least one of its Unitholders is a feeder UCITS; (a) it is not itself a feeder UCITS; and (a) it does not hold units of a feeder UCITS. [Note: article 58(3) of the UCITS Directive] merging UCITS (in COLL and in accordance with regulations 7 and 8 of the UCITS Regulations 2011) in relation to a UCITS merger, the UCITS scheme, EEA UCITS scheme or sub-fund of such a scheme, that under the proposed arrangements will be transferring all its assets and liabilities to the receiving UCITS. MiFID complaint any oral or written expression of dissatisfaction, whether justified or not, from, or on behalf of, a person about the provision of, or failure to provide, a financial service or a redress determination:
(a) which alleges that the complainant has suffered (or may suffer) financial loss, material distress or material inconvenience; and (b) either:
(i) to which article 26 of the MiFID Org Regulation applies; or (ii) which concerns the equivalent business of a third country investment firm. [Note: For the application of article 26 of the MiFID Org Regulation, see the UK provisions which implemented articles 1(1), 1(3), 1(4), 39 and 41 of MiFID, article 1 of the MiFID Org Regulation, DISP 1.1A.3G and DISP 1.1A.4G] [Note: a MiFID complaint which falls within the jurisdiction of the Financial Ombudsman Service is a complaint] MiFID investment firm (1) (in summary) (except in SUP 13, SUP 13A and SUP 14 in relation to notification of passported activity) a firm to which MiFID applies would apply if it had its head office or registered office in the EEA including, for some purposes

FCA 201X/XX only, a credit institution and collective portfolio management investment firm. (2) (in full) a firm (except in SUP 13, SUP 13A and SUP 14 in relation to notification of passported activity) which is:
(a) an investment firm with its head office in the EEA UK (or, if it has a registered office, that office); (b) a CRD credit institution (only when providing an investment service or activity or when selling, or advising clients in relation to, structured deposits, for the purposes of:
(i) the rules implementing corresponding to the articles referred to in article 1(3) and article 1(4) of MiFID; (ii) the requirements imposed upon it by and under MiFIR; and (iii) the requirements imposed upon it by onshored regulations which were previously EU regulations made under MiFID); (ba) CRD credit institution (only when providing an investment service or activity) in relation to COMP or FEES 6); (c) a collective portfolio management investment firm (only when providing the services referred to in article 6(4) AIFMD or article 6(3) of the UCITS Directive in relation to the rules which implemented implementing the articles of MiFID referred to in article 6(6) of AIFMD or Article 6(4) of the UCITS Directive and for a full-scope UK AIFM, where relevant, or the rules implementing which implemented article 12(2)(b) of AIFMD); unless, and to the extent that, it is a person to which Part 1 of
Schedule 3 to the Regulated Activities Order or regulation 8
of the MiFI Regulations applies.
(3) (in SUP 13, SUP 13A and SUP 14 in relation to notification of passported activity) an investment firm with its head office in the EEA (or, if it has a registered office, that office) unless, and to the extent that, MiFID does not apply to it as a result of
article 2 (Exemptions) or article 3 (Optional exemptions) of
MiFID. [deleted]
MiFID ITS 19 the UK version of Commission Implementing Regulation (EU) 2016/824 of 25 May 2016 laying down implementing technical

FCA 201X/XX standards with regard to the content and format of the description of the functioning of MTFs and OTFs and the notification to ESMA according to MiFID, which is part of UK law by virtue of the EUWA. MiFID ITS 2 the UK version of Commission Implementing Regulation (EU) No 2017/1005 of 15 June 2017 laying down implementing technical standards with regard to the format and timing of the communication and publication of the suspension and removal of financial instruments from trading on a regulated market, an MTF or an OTF according to MiFID, which is part of UK law by virtue of the EUWA. MiFID ITS 3 the UK version of Commission Implementing Regulation (EU) No 2017/1110 of 22 June 2017 laying down implementing technical standards with regard to the standard forms, templates and procedures for the authorisation of data reporting services providers and related notifications according to MiFID, which is part of UK law by virtue of the EUWA. MiFID ITS 4 the UK version of Commission Implementing Regulation (EU) No 2017/1093 of 20 June laying down implementing technical standards with regard to the format of position reports by investment firms and market operators, which is part of UK law by virtue of the EUWA. MiFID ITS 4A the UK version of Commission Implementing Regulation (EU) No [xxxx/xxx] laying down implementing technical standards with regard to standard forms, templates and procedures for the transmission of information in accordance with MiFID, which is part of UK law by virtue of the EUWA. MiFID ITS 5 the UK version of Commission Implementing Regulation (EU) No 2017/953 of 6 June 2017 laying down implementing technical standards with regard to the format and the timing of position reports by investment firms and market operators of trading venues according to MiFID of the European Parliament and of the Council on markets in financial instruments, which is part of UK law by virtue of the EUWA. MiFID/MiFIR requirements any of the requirements applicable to an RIE or an applicant to become an RIE imposed by MiFIR and any formerly directly applicable regulation made under MiFID or EU MiFIR, which is an onshored regulation. MiFID Org Regulation the UK version of Commission Delegated Regulation (EU) 2017/565 of 25 April 2016 supplementing MiFID of the European Parliament and of the Council as regards organisational requirements and operating conditions for investment firms and defined terms for the purposes of that Directive, which is part of UK law by virtue of the EUWA. MiFID RTS 1 the UK version of Commission Delegated Regulation (EU) 2017/587 of 14 July 2016 supplementing MiFIR with regard to regulatory

FCA 201X/XX technical standards on transparency requirements for trading venues and investment firms in respect of shares, depositary receipts, exchange-traded funds, certificates and other similar financial instruments and the obligation for investment firms to execute transactions in certain shares on a trading venue or a systematic internaliser, which is part of UK law by virtue of the EUWA. MiFID RTS 2 the UK version of Commission Delegated Regulation (EU) No 2017/583 of 14 July 2016 supplementing MiFIR with regard to regulatory technical standards on transparency requirements for trading venues and investment firms in respect of bonds, structured finance products, emission allowances and derivatives, which is part of UK law by virtue of the EUWA. MiFID RTS 3 the UK version of Commission Delegated Regulation (EU) No 2017/577 of 13 June 2016 supplementing MiFIR with regard to regulatory technical standards on the volume cap mechanism and the provision of information for the purposes of transparency and other calculations, which is part of UK law by virtue of the EUWA. MiFID RTS 3A the UK version of Commission Delegated Regulation (EU) No 2017/1018 of 29 June 2016 supplementing MiFID with regard to regulatory technical standards specifying information to be notified by investment firms, market operators and credit institutions, which is
part of UK law by virtue of the EUWA.
MiFID RTS 6 the UK version of Commission Delegated Regulation (EU) No 2017/589 of 19 July 2016 supplementing MiFID with regard to regulatory technical standards specifying the organisational requirements of investment firms engaged in algorithmic trading, providing direct electronic access and acting as general clearing members, which is part of UK law by virtue of the EUWA. MiFID RTS 7 the UK version of Commission Delegated Regulation (EU) No 2017/584 of 14 July 2016 supplementing MiFID with regard to regulatory technical standards specifying organisational requirements of regulated markets, multilateral trading facilities and organised trading facilities enabling or allowing algorithmic trading through their systems, which is part of UK law by virtue of the EUWA. MiFID RTS 8 the UK version of Commission Delegated Regulation (EU) 2017/578 of 13 June 2016 supplementing MiFID with regard to regulatory technical standards specifying the requirements on market making agreements and schemes, which is part of UK law by virtue of the EUWA. MiFID RTS 9 the UK version of Commission Delegated Regulation (EU) No 2017/566 of 18 May 2016 supplementing MiFID with regard to regulatory technical standards on the ratio of unexecuted orders to transactions, which is part of UK law by virtue of the EUWA.

FCA 201X/XX
MiFID RTS 10 the UK version of Commission Delegated Regulation (EU) 2017/573 of 6 June 2016 supplementing MiFID with regard to regulatory technical standards on requirements to ensure fair and nondiscriminatory co-location and fee structures, which is part of UK law by virtue of the EUWA. MiFID RTS 11 the UK version of Commission Delegated Regulation (EU) 2017/588 of 14 July 2016 supplementing MiFID with regard to regulatory technical standards on the tick size regime for shares, depositary receipts and exchange traded funds, which is part of UK law by virtue of the EUWA. MiFID RTS 12 the UK version of Commission Delegated Regulation (EU) No 2017/570 of 26 May 2016 supplementing MiFID with regard to regulatory technical standards on the determination of a material market in terms of liquidity relating to notifications of a temporary halt in trading, which is part of UK law by virtue of the EUWA. MiFID RTS 13 the UK version of Commission Delegated Regulation (EU) No 2017/571 of 2 June 2016 supplementing MiFID with regard to regulatory technical standards on the authorisation, organisational requirements and the publication of transactions for data reporting services providers, which is part of UK law by virtue of the EUWA. MiFID RTS 14 the UK version of Commission Delegated Regulation (EU) No 2017/572 of 2 June 2016 supplementing MiFIR with regard to regulatory technical standards on the specification of the offering of pre-trade and post-trade data and the level of disaggregation, which is part of UK law by virtue of the EUWA. MiFID RTS 17 the UK version of Commission Delegated Regulation (EU) No 2017/568 of 24 May 2016 supplementing MiFID with regard to regulatory technical standards for the admission of financial instruments to trading on regulated markets, which is part of UK law by virtue of the EUWA. MiFID RTS 18 the UK version of Commission Delegated Regulation (EU) No 2017/569 of 24 May 2016 supplementing MiFID with regard to regulatory technical standards for the suspension and removal of financial instruments from trading, which is part of UK law by virtue of the EUWA. MiFID RTS 21 the UK version of Commission Delegated Regulation (EU) No 2017/591 of 1 December 2016 supplementing MiFID with regard to regulatory technical standards for the application of position limits to commodity derivatives, which is part of UK law by virtue of the EUWA. MiFID RTS 22 the UK version of Commission Delegated Regulation (EU) 2017/590 of 28 July 2016 supplementing MiFIR with regard to regulatory

FCA 201X/XX technical standards for the reporting of transactions to competent authorities, which is part of UK law by virtue of the EUWA. MiFID RTS 23 the UK version of Commission Delegated Regulation (EU) No 2017/585 of 14 July 2016 supplementing MiFIR with regard to regulatory technical standards for the data standards and formats for financial instrument reference data and technical measures in relation to arrangements to be made by the European Securities and Markets Authority and competent authorities, which is part of UK law by virtue of the EUWA. MiFID RTS 25 the UK version of Commission Delegated Regulation (EU) 2017/574 of 7 June 2016 supplementing MiFID with regard to regulatory technical standards for the level of accuracy of business clocks, which is part of UK law by virtue of the EUWA. MiFID RTS 26 the UK version of Commission Delegated Regulation (EU) 2017/582 of 29 June 2016 supplementing MiFIR with regard to regulatory technical standards specifying the obligation to clear derivatives traded on regulated markets and timing of acceptance for clearing, which is part of UK law by virtue of the EUWA. MiFID RTS 27 the UK version of Commission Delegated Regulation (EU) 2017/575 of 8 June 2016 supplementing MiFID with regard to regulatory technical standards for the data to be provided by execution venues on the quality of execution of transactions, which is part of UK law by virtue of the EUWA. MiFID RTS 28 the UK version of Commission Delegated Regulation (EU) 2017/576 of 8 June 2016 supplementing MiFID with regard to regulatory technical standards for the annual publication by investment firms of information on the identity of execution venues and on the quality of execution, which is part of UK law by virtue of the EUWA. MiFIR the UK version of Regulation (EU) No. 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Regulation (EU) No 648/2012, which is
part of UK law by virtue of the EUWA.
MiFIR Delegated
Regulation the UK version of Commission Delegated Regulation (EU) 2017/567 of 18 May 2016 supplementing Regulation (EU) No 600/2014 of the European Parliament and of the Council with regard to definitions, transparency, portfolio compression and supervisory measures on product intervention and positions, which is part of UK law by virtue of the EUWA. MiFIR indirect clearing RTS the UK version of Commission Delegated Regulation (EU) 2017/2154 of 22 September 2017 supplementing Regulation (EU) No 600/2014 of the European Parliament and of the Council with regard to regulatory technical standards on indirect clearing arrangements, which is part of UK law by virtue of the EUWA.

FCA 201X/XX mixed-activity holding company has the meaning given to the definition of “mixed activity holding company” in article 4(1)(22) of the EU CRR UK CRR. mixed financial holding company in accordance with Article 2(15) of the Financial Groups Directive (Definitions)) a parent undertaking, other than a regulated entity, which meets the following conditions:
(a) it, together with its subsidiary undertakings, at least one of which is an EEA UK regulated entity, and other entities, constitutes a financial conglomerate; (b) it has been notified by its coordinator that its group is a financial conglomerate in accordance with Article 4(2) of the Financial Groups Directive Regulation 1(2) of the Financial Groups Directive Regulations; and (c) it has not been notified that its coordinator and other relevant competent authorities have has agreed not to treat the group as a financial conglomerate in accordance with Article 3(3) or
Article 3(3a) of the Financial Groups Directive where such
group, in terms of the tests in GENPRU 3 Annex 4:
(i) does not meet Threshold Test 2 but meets Threshold Test 3; or (ii) meets Threshold Test 2 but not Threshold Test 3. Motor Insurers’ Information Centre the information centre appointed to meet the United Kingdom’s obligations under the UK provisions which implemented article 23 of the Consolidated Motor Insurance Directive (Information Centres). multilateral system any system or facility in which multiple third-party buying and selling trading interests in financial instruments are able to interact in the system. [Note: article 4(1)(19) 2(1)(11) of MiFID MiFIR] mutual society share a share, excluding a deferred share issued by a credit union, which:
(a) meets the requirements for common equity Tier 1 capital instruments under article 28 or 29; and (b) is issued by an institution which is of a type listed in article 27; in each case of Regulation of the European Parliament and the Council on prudential requirements for credit institutions and investment firms (Regulation (EU) No 575/2013) and amending Regulation (EU) No 648/2012 the UK CRR.

FCA 201X/XX near cash money, deposits or investments which, in each case, fall within any of the following:
(a) money which is deposited with an eligible institution or an approved bank in:
(i) a current account; or
(ii) a deposit account, if the money can be withdrawn immediately and without payment of a penalty exceeding seven days' interest calculated at ordinary commercial rates; (b) certificates of deposit issued by an eligible institution or an approved bank if immediately redeemable at the option of the holder; (c) government and public securities, if redeemable at the option of the holder or bound to be redeemed within two years; (d) bills of exchange which are government and public securities; (e) deposits with a local authority of a kind which fall within paragraph 9 of Part II of the First Schedule to the Trustee Investments Act 1961, and equivalent deposits with any local authority in another an EEA State, if the money can be withdrawn immediately and without payment of a penalty as described in (a). netting set (in accordance with Part 1 of Annex III of the Banking Consolidation Directive (Definitions) and for the purpose of BIPRU 13 (The calculation of counterparty risk exposure values for financial derivatives, securities financing transactions and long settlement transactions)) a group of transactions with a single counterparty that are subject to a legally enforceable bilateral netting arrangement and for which netting is recognised under BIPRU 13.7 (Contractual netting), BIPRU 5 (Credit risk mitigation) and, if applicable, BIPRU
4.10 (The IRB approach: Credit risk mitigation); each transaction that
is not subject to a legally enforceable bilateral netting arrangement, which is recognised under BIPRU 13.7 must be interpreted as its own netting set for the purpose of BIPRU 13. Under the method set out at BIPRU 13.6, all netting sets with a single counterparty may be treated as a single netting set if negative simulated market values of the individual sets are set to zero in the estimation of expected exposure (EE). [Note: BCD, Part 1 of Annex III of the Banking Consolidation Directive (Definitions) and Annex III, Part 1, point 5 of the Banking Consolidation Directive]

FCA 201X/XX non-core concentration risk group counterparty (in accordance with Article 113(4)(c) of the Banking Consolidation Directive) has the meaning in BIPRU 10.9A.4R (Definition of noncore concentration risk group counterparty), which is in summary (in relation to a firm) each counterparty which is its parent undertaking, its subsidiary undertaking or a subsidiary undertaking of its parent undertaking, provided that (in each case) both the counterparty and the firm satisfy the conditions in BIPRU 10.9A.4R (Definition of noncore concentration risk group counterparty). [Note: article 113(4)(c) of the Banking Consolidation Directive] non-core large exposures group (in relation to a firm) all counterparties which:
(1) are listed in the firm’s non-core large exposures group permission; (2) satisfy the conditions in IFPRU 8.2.6R (Intra-group exposures: non-core large exposures group); and (3) for which exposures are exempted, under article 400(2)(c) of the EU CRR UK CRR (Exemptions), from the application of
article 395(1) of the EU CRR UK CRR (Limits to large
exposures). non-core large exposures group permission a permission referred to in IFPRU 8.2.6R given by the FCA for the purpose of article 400(2)(c) of the EU CRR UK CRR (Large exposures: exemptions). non-directive firm (1) (in SUP 11 (Controllers and close links) and SUP 16 (Reporting requirements)) (in accordance with the Financial Services and Markets Act 2000 (Controllers) (Exemption) Order 2009 (SI 2009/774)) a UK domestic firm other than:
(a) a credit institution authorised under the Banking Consolidation Directive that has permission under Part 4A of the Act to carry on the regulated activity of accepting deposits; (b) an investment firm authorised under MIFID that has permission under Part 4A of the Act to carry on regulated activities relating to investment services and/or activities in the UK; (c) a management company as defined in article 2(1)(b) of the UCITS Directive, authorised under that directive
section 237 of the Act which is authorised by the FCA;
(d) a Solvency II firm.
…

FCA 201X/XX non-EEA non-UK bank a bank which is a body corporate or partnership formed under the law of any country or territory outside the EEA UK. non-EEA non-UK feeder AIF a UK AIF or an EEA AIF that is a feeder AIF, the master AIF of which is a non-EEA UK AIF or is managed by a non-EEA UK AIFM. non-EEA non-UK sub-group (1) (in GENPRU (except GENPRU 3) and BIPRU (except BIPRU 12)) a group of undertakings identified as a non EEA non-UK sub-group in BIPRU 8.3.1R (Main consolidation rule for nonEEA non-UK sub-groups); however where the provision in question refers to a non-EEA sub-group in another EEA State it means a group of undertakings identified in Article 73(2) of the Banking Consolidation Directive (Non-EEA subgroups) required to be supervised on a consolidated basis under
Article 73(2) of the Banking Consolidation Directive by a
competent authority in that EEA State.
(2) (except in (1)) a group of undertakings identified in article 22 of the EU CRR (Sub-consolidation in cases of entities in third countries). non-financial entity (as defined in Article 2(1) of MiFID RTS 21) a natural or legal person person other than:
(a) an investment firm authorised in accordance with MIFID as such by means of a Part 4A permission under the Act in accordance with MIFID; (b) a credit institution authorised in accordance with Directive 2013/36/EU of the European Parliament and of the Council or a CRD credit institution; (c) an insurance undertaking authorised as such by means of a
Part 4A permission under the Act or in accordance with
Directive 73/ 239/EEC;
(d) an assurance undertaking authorised as such by means of a
Part 4A permission under the Act or in accordance with
Directive 2002/83/EC of the European Parliament and of the Council; (e) a reinsurance undertaking authorised as such by means of a
Part 4A permission under the Act or in accordance with
Directive 2005/68/EC of the European Parliament and of the Council; (f) a UCITS and, where relevant, its management company, authorised as such by means of a Part 4A permission under the Act or in accordance with the UCITS Directive;

FCA 201X/XX
(g) an institution for occupational retirement provision within the meaning of article 6(a) of Directive 2003/41/EC of the European Parliament and of the Council or an occupational pension scheme; (h) an alternative investment fund managed by AIFMs authorised or registered in accordance with the AIFMD or authorised as such by means of a Part 4A permission under the Act or registered as such pursuant to the Alternative Fund Managers Regulations 2013; (i) a CCP authorised in accordance with EMIR Regulation (EU) No 909/2014 of the European Parliament and of the Council or recognised as such by means of a recognition order under Part XVIII of the Act; (j) a central securities depositary authorised in accordance with CDSR Regulation (EU) No 909/2014 of the European Parliament and of the Council or recognised as such by means of a recognition order under Part XVIII of the Act. A third-country entity is a non-financial entity if it would not require authorisation under any of the aforementioned legislation if it was based in the Union United Kingdom and subject to Union UK law [Note: article 2 of MiFID RTS 21] non-listed company (in accordance with article 4(1)(ac) of AIFMD) a company which has its registered office in the UK or the EEA and the shares of which are not admitted to trading on a regulated market. [Note: article 4(1)(ac) of AIFMD] normally based (in ICOBS) (in relation to a vehicle):
(a) the territory of the EEA State State of which the vehicle bears a registration plate; or (b) in cases where no registration is required for the type of vehicle, but the vehicle bears an insurance plate or a distinguishing sign analogous to a registration plate, the territory of the EEA State State in which the insurance plate or the sign is issued; or (c) in cases where neither registration plate nor insurance plate nor distinguishing sign is required for the type of vehicle, the territory of the EEA State State in which the keeper of the vehicle is permanently resident.

FCA 201X/XX
ODR Regulation the UK version of Regulation (EU) No 524/2013 of the European Parliament and of the Council of 21 May 2013 on online dispute resolution for consumer disputes and amending Regulation (EC) No 2006/2004 and Directive 2009/22/EC, which is part of UK law by virtue of the EUWA. oil market participant a firm:
(a) whose permission:
(i) includes a requirement that the firm must not carry on any designated investment business other than oil market activity; and (ii) does not include a requirement that it comply with IPRU(INV) 5 (Investment management firms) or 13 (Personal investment firms); and (b) which is not an authorised professional firm, bank, BIPRU firm, (unless it is an exempt BIPRU commodities firm), IFPRU investment firm (unless it is an exempt IFPRU commodities firm), building society, credit union, friendly society, ICVC, insurer, MiFID investment firm (unless it is an exempt BIPRU commodities firm or exempt IFPRU commodities firm), media firm, service company, insurance intermediary, home finance administrator, mortgage intermediary, or home finance provider, incoming EEA firm (without a top-up permission), or incoming Treaty firm (without a top-up permission) or regulated benchmark administrator. one-sided credit valuation adjustment (in accordance with Part 1 of Annex III of the Banking Consolidation Directive (Definitions) and for the purposes of BIPRU) a credit valuation adjustment that reflects the market value of the credit risk of the counterparty to a firm, but does not reflect the market value of the credit risk of the firm to the counterparty. [Note: Part 1 of Annex III of the Banking Consolidation Directive (Definitions)] operational risk (1) (in COLL and FUND) the risk of loss for a UCITS or AIF resulting from inadequate internal processes and failures in relation to the people and systems of the management company or AIFM or from external events, and it includes legal and documentation risk and risk resulting from the trading, settlement and valuation procedures operated on behalf of the fund. (2) (in GENPRU (except GENPRU 3 (Cross sector groups) and BIPRU (except BIPRU 12 (Liquidity Standards)) (in

FCA 201X/XX accordance with Article 4(22) of the Banking Consolidation Directive) the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events, including legal risk. [Note: article 4(22) of the Banking Consolidation Directive] (3) (except in (1) and (2)) has the meaning in article 4(1)(52) of the EU CRR UK CRR. option the investment, specified in article 83 of the Regulated Activities Order (Options), which is in summary an option to acquire or dispose of:
…
[Editor’s note: The current policy intention for COLL is to reflect the current scope of this article in the Regulated Activities Order. If amendments are made to the scope of this article in the relevant statutory instrument, we will amend the drafting of this glossary term to deliver the stated policy outcome.] originator (1) (in GENPRU (except GENPRU 3), MIPRU and BIPRU (except BIPRU 12)) (in accordance with Article 4(41) of the Banking Consolidation Directive (Definitions) and in relation to a securitisation within the meaning of paragraph (2) of the definition of securitisation) either of the following:
(a) an entity which, either itself or through related entities, directly or indirectly, was involved in the original agreement which created the obligations or potential obligations of the debtor or potential debtor giving rise to the exposures being securitised; or (b) an entity which purchases a third party’s exposures onto its balance sheet and then securitises them. [Note: article 4(41) of the Banking Consolidation Directive (Definitions)] (2) (except in (1)) has the meaning in article 4(1)(13) of the EU CRR UK CRR. OTC derivative transaction a derivative financial instrument of a type listed on Annex II to the UK CRR that is traded over the counter. overseas firm (1) (in relation to MAR 5 and MAR 5A) a firm which has its registered office (or, if it has no registered office, its head office) outside the United Kingdom excluding an incoming EEA firm.

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(2) (in any other case) a firm which has its registered office (or, if it has no registered office, its head office) outside the United Kingdom. overseas person (in accordance with article 3(1) of the Regulated Activities Order (Interpretation)) a person who:
(a) carries on any of the following regulated activities:
…
(xa) managing a UK UCITS;
(xb) acting as trustee or depositary of a UK UCITS; … … own funds … (2A) (in IPRU(INV) 11) has the meaning in article 4(1)(118) of the EU CRR UK CRR. … (5) (except in (1) to (4)) has the meaning in article 4(1)(118) of the UK CRR. own funds instruments has the meaning in article 4(1)(119) of the EU CRR UK CRR. own funds requirements as defined in article 92 (Own funds requirements) of the EU CRR UK CRR. parent financial holding company in a Member State the UK (1) (in GENPRU (except GENPRU 3 and BIPRU (except BIPRU 12)) (in accordance with Article 4(15) of the Banking Consolidation Directive (Definitions) and Article 3 of the Capital Adequacy Directive (Definitions)) a financial holding company which is not itself a subsidiary undertaking of an institution authorised in the same EEA State UK, or of a financial holding company or mixed financial holding company established in the same EEA State UK. (2) (except in (1)) has the meaning in article 4(1)(30) of the EU CRR. [deleted] parent institution in a Member State the UK (1) (in GENPRU (except GENPRU 3 and BIPRU (except BIPRU 12)) (in accordance with Article 4(14) of the Banking Consolidation Directive and Article 3 of the Capital Adequacy Directive (Definitions)) an institution which has an institution or a financial institution as a subsidiary

FCA 201X/XX undertaking or which holds a participation in such an institution, and which is not itself a subsidiary undertaking of another institution authorised in the same EEA State UK, or of a financial holding company or mixed financial holding company established in the same EEA State UK. (2) (except in (1)) has the meaning in article 4(1)(28) of the EU CRR. [deleted] parent mixed financial holding company in a Member State the UK (1) (in GENPRU (except GENPRU 3 and BIPRU (except BIPRU 12)) in accordance with Article 4(15a) of the Banking Consolidation Directive (Definitions)) a mixed financial holding company which is not itself a subsidiary undertaking of an institution authorised in the same EEA State UK, or of a financial holding company or mixed financial holding company established in the same EEA State UK. (2) (except in (1)) has the meaning in article 4(1)(32) of the EU CRR. [deleted] parent undertaking (1) (in accordance with section 420 of the Act (Parent and subsidiary undertaking) and section 1162 of the Companies Act 2006 (Parent and subsidiary undertakings)):
(a) …
…
(viii) (except in REC or for the purposes of rules in GENPRU and INSPRU as they apply to members of the Society of Lloyd’s or to the Society or managing agents in respect of members) it is incorporated in or formed under the law of another an EEA State and is a parent undertaking within the meaning of any rule of law in that State for purposes connected with implementation of the Seventh Company Law Directive; … (3) (for the purposes of GENPRU 3, BIPRU 12, IFPRU, SYSC 19A (IFPRU Remuneration Code) and SYSC 19D (Dualregulated firms Remuneration Code)) has the meaning in
article 4(1)(15) of the EU CRR UK CRR but so that (in
accordance with article 2(9) of the Financial Groups Directive) article 4(1)(15)(b) applies for the purpose of GENPRU 3. [Note: article 2(9) of the Financial Groups Directive] participant firm (1) a firm other than:

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(a) an incoming EEA firm to the extent prescribed for the purposes of section 213(10) of the Act (The compensation scheme) under regulation 2 of the Electing Participants Regulations (Persons not to be regarded as relevant persons), unless it has top-up cover; [deleted] [Note: This covers certain incoming EEA firms: see COMP 14.1 and 14.2.] … (f) a UCITS qualifier; [deleted] (g) … (h) an AIFM qualifier; [deleted] … (2) a recognised investment exchange but only insofar as it is operating a multilateral trading facility or operating an organised trading facility; (3) (except in FEES 6) a pre-exit incoming EEA firm but only:
(a) in relation to acts or omissions before exit day that give rise to a claim against it; and (b) (where necessary for it to have obtained FSCS cover) that had, before exit day:
(i) notified the FSCS in writing that it had elected to participate in the compensation scheme under SI 2001/1783 (as in force and as from time to time amended before exit day); and (ii) the FSCS had notified it that its election had been accepted. participation (1) (for the purposes of GENPRU (except GENPRU 3) and for the purposes of BIPRU (except BIPRU 12) as they apply on a consolidated basis):
(a) a participating interest may be defined according to:
(i) section 421A of the Act where applicable; or (ii) paragraph 11(1) of Schedule 10 to the Large and Medium-sized Companies and Groups

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(Accounts and Reports) Regulations 2008 (SI 2008/410) where applicable; or (iii) paragraph 8 of Schedule 7 to the Small Companies and Groups (Accounts and Directors' Report) Regulations 2008 (SI 2008/409) where applicable; or (iv) paragraph 8 of Schedule 4 to the Large and Medium-sized Limited Liability Partnerships (Accounts) Regulations 2008 (SI 2008/1913) where applicable; or (v) paragraph 8 of Schedule 5 to the Small Limited Liability Partnerships (Accounts) Regulations 2008 (SI 2008/1912) where applicable; or (b) (otherwise) the direct or indirect ownership of 20% or more of the voting rights or capital of an undertaking; but excluding the interest of a parent undertaking in its subsidiary undertaking. (2) (except in (1) has the meaning in article 4(1)(35) of the EU CRR UK CRR. payment institution an authorised payment institution, an EEA authorised payment institution or a small payment institution. [Note: articles 4(4) and 32(3) of the Payment Services Directive] payment service … (b) The following activities do not constitute payment services:
…
(xi) services based on specific payment instruments that can be used only in a limited way and meet one of the following conditions:
(A) allow the holder to acquire goods or services only in the issuer's premises; or (B) are issued by a professional issuer and allow the holder to acquire goods or services only within a limited network of service providers which have direct commercial agreements with the issuer; or (C) may be used only to acquire a very limited range of goods or services; or

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(D) are valid only in a single EEA state the UK, are provided at the request of an undertaking or a public sector entity, and are regulated by a national or regional public authority for specific social or tax purposes to acquire specific goods or services from suppliers which have a commercial agreement with the issuer. … … payment service provider (1) (except in DISP) (in accordance with regulation 2(1) of the Payment Services Regulations) any of the following persons when they carry out a payment service:
(a) an authorised payment institution;
(b) a small payment institution;
(ba) a registered account information service provider; (c) an EEA authorised payment institution; [deleted] (d) a credit institution; (e) an electronic money issuer; (f) the Post Office Limited; (g) the Bank of England, the European Central Bank and the national central banks of EEA States other than the United Kingdom, other than when acting in their its capacity as a monetary authority or carrying out other functions of a public nature; and (h) government departments and local authorities, other than when carrying out functions of a public nature. … PD Regulation the UK version of the Prospectus Directive Regulation (No 2004/809/EC), which is part of UK law by virtue of the EUWA. peak exposure (in accordance with Part 1 of Annex III of the Banking Consolidation Directive (Definitions) and for the purpose of BIPRU 13 (The calculation of counterparty risk exposure values for financial derivatives, securities financing transactions and long settlement transactions)) a high percentile of the distribution of exposures at any particular future date before the maturity date of the longest transaction in the netting set.

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[Note: Part 1 of Annex III of the Banking Consolidation Directive (Definitions)] periodic statement a report which a firm is required to provide to a client pursuant to:
(a) COBS 16.3 (Periodic reporting) where the firm is carrying on designated investment business other than MiFID, equivalent third country or optional exemption business; (b) article 60(1) of the MiFID Org Regulation where the firm is carrying on MiFID business; (c) GEN 2.2.22AR and COBS 16A.4.1 EUUK where the firm is carrying on the equivalent business of a third country investment firm; (d) COBS 16A.1.2R and COBS 16A.4.1 EUUK where the firm is carrying on optional exemption business. [Note: see COBS 16A.4.1 EUUK where article 60(1) of the MiFID Org Regulation is reproduced]. permanent interest bearing shares any shares of a class defined as deferred shares for the purposes of
section 119 of the Building Societies Act 1986 which are issued as
permanent interest-bearing shares and on terms which qualify them as own funds for the purposes of the EU CRR UK CRR. permission permission to carry on regulated activities; that is, any of the following:
(a) a Part 4A permission;
(b) the permission that an incoming EEA firm has, under paragraph 15(1) or paragraph 15A(1), (3) or (4) of Schedule 3 to the Act (EEA Passport Rights), on qualifying for authorisation under paragraph 12 of that Schedule [deleted]; (c) the permission that an incoming Treaty firm has, under paragraph 4(1) of Schedule 4 to the Act (Treaty Rights), on qualifying for authorisation under paragraph 2 of that
Schedule [deleted];
(d) the permission that a UCITS qualifier has, under paragraph 2(1) of Schedule 5 to the Act (Persons concerned in Collective Investment Schemes) [deleted]; (e) the permission that an ICVC has, under paragraph 2(2) of
Schedule 5 to the Act (Persons concerned in Collective
Investment Schemes);
(f) the permission that the Society of Lloyd’s has, under section 315(2) of the Act (The Society: authorisation and permission),

FCA 201X/XX which is to be treated as a Part IV permission for the purposes of Part 4A of the Act (Permission to carry on regulated activities) in accordance with section 315(3) of the Act. personal investment firm a firm whose permitted activities include designated investment business, which is not an authorised professional firm, bank, IFPRU investment firm, BIPRU firm, building society, collective portfolio management firm, credit union, energy market participant, ICVC, insurer, media firm, oil market participant, or service company, incoming EEA firm (without a top-up permission), incoming Treaty firm(without a top-up permission) or UCITS qualifier (without a top-up permission), whose permission does not include a requirement that it comply with IPRU(INV) 3 (Securities and futures firms) or 5 (Investment management firms), and which is within (a), (b) or (c):
…
PII capital requirement
(1) (in IPRU(INV) 11) an amount of own funds that a collective portfolio management firm must hold in relation to its professional indemnity insurance policy to cover any defined excess (as set out in article 15 of the AIFMD level 2 regulation (professional indemnity insurance) (as replicated in IPRU(INV) 11.3.15EUUK)) and exclusions to that policy (see IPRU(INV) 11.3.16R (Professional negligence)). [deleted] position (1) (in accordance BIPRU 1.2.4R (Definition of the trading book:
Positions)) includes proprietary positions and positions arising from client servicing and market making. (2) (in IFPRU) has the meaning which it has, or is used, in the EU CRR UK CRR. PRIIPs Regulation the UK version of Regulation (EU) No 1286/2014 of the European Parliament and of the Council of 26 November 2014 on key information documents for packaged retail and insurance-based investment products (PRIIPs), which is part of UK law by virtue of the EUWA. http://data.europa.eu/eli/reg/2014/1286/oj probability of default (in accordance with Article 4(25) of the Banking Consolidation Directive (Definitions) and for the purpose of BIPRU) the probability of default of a counterparty over a one year period; for the purposes of the IRB approach, default has the meaning in the definition of default. [Note: article 4(25) of the Banking Consolidation Directive (Definitions)] professional negligence capital requirement (1) (in IPRU(INV) 11) an amount of own funds that a collective portfolio management firm must hold professional liability risks as set out in article 14 of the AIFMD level 2 regulation

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(additional own funds) (as replicated in IPRU(INV) 11.3.14EUUK) (Professional negligence). [deleted] prospectus (1) (in LR and PR, FEES and FUND 3 (Requirements for managers of alternative investment funds)) a prospectus required under the prospectus directive the Act. (2) … Prospectus Regulation the UK version of Regulation (EU) No 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2033/71/EC, which is part of UK law by virtue of the EUWA. Prospectus RTS Regulations (1) the UK version of Commission Delegated Regulation (EU) No 382/2014 supplementing Directive 2003/71/EC of the European Parliament and of the Council with regard to regulatory technical standards for publication of supplements to the prospectus, which is part of UK law by virtue of the EUWA; and (2) the UK version of Commission Delegated Regulation (EU) 2016/301 supplementing Directive 2003/71/EC of the European Parliament and of the Council with regard to regulatory technical standards for approval and publication of the prospectus and dissemination of advertisements and amending Commission Regulation (EC) No 809/2004, which is part of UK law by virtue of the EUWA. protection buyer (in BIPRU) (in relation to a credit derivative and in accordance with paragraph 8 of Annex I of the Capital Adequacy Directive (Calculating capital requirements for position risk)) the person who transfers credit risk. [Note: paragraph 8 of Annex I of the Capital Adequacy Directive (Calculating capital requirements for position risk)] protection seller (in BIPRU) (in relation to a credit derivative and in accordance with paragraph 8 of Annex I of the Capital Adequacy Directive (Calculating capital requirements for position risk)) the person who assumes the credit risk. [Note: paragraph 8 of Annex I of the Capital Adequacy Directive (Calculating capital requirements for position risk)] public international body (1) (in PR) (as defined in the PD Regulation) a legal entity of public nature established by an international treaty between sovereign States and of which one or more Member sovereign States are members.

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(2) … public sector entity (in accordance with Article 4(18) of the Banking Consolidation Directive (Definitions) and for the purposes of BIPRU) any of the following:
(a) non-commercial administrative bodies responsible to central governments, regional governments or local authorities; or (b) authorities that exercise the same responsibilities as regional and local authorities; or (c) non commercial undertakings owned by central governments that have explicit guarantee arrangements; or (d) self administered bodies governed by law that are under public supervision. [Note: article 4(18) of the Banking Consolidation Directive (Definitions)] qualified investor (in PR) (a defined in section 86(7) of the Act) in relation to an offer of transferable securities:
…
[Editor’s note: In due course, the text reproduced here will be amended in line with any amendments made to section 86(7) of the Act.] qualifying money market fund (1) (in COLL, CASS 7 and BSOCS) a collective investment undertaking authorised under the UCITS Directive or which is subject to supervision and, if applicable, authorised by an authority under the national law of the authorising Member State, and which satisfies the following conditions:
(a) its primary investment objective must be to maintain the net asset value of the undertaking either constant at par (net of earnings), or at the value of the investors’ initial capital plus earnings; (b) it must, with a view to achieving that primary investment objective, invest exclusively in high quality money market instruments with a maturity or residual maturity of no more than 397 days, or regular yield adjustments consistent with such a maturity, and with a weighted average maturity of no more than 60 days. It may also achieve this objective by investing on an ancillary basis in deposits with credit institutions; (c) it must provide liquidity through same day or next day settlement.

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(2) For the purposes of (1)(b), a money market instrument may be considered to be of high quality if the AIFM or UCITS management company of the collective investment undertaking performs its own documented assessment of the credit quality of money market instruments that allows it to consider a money market instrument as high quality subject to the conditions below:
(a) where one or more credit rating agencies registered and supervised by ESMA have provided a rating of the instrument, the AIFM’s or UCITS management company’s internal assessment must have regard to, inter alia, those credit ratings; and (b) while there can be no mechanistic reliance on such external ratings, a downgrade below the two highest short-term credit ratings by any agency registered and supervised by ESMA that has rated the instrument will lead the AIFM or UCITS management company to undertake a new assessment of the credit quality of the money market instrument to ensure it continues to be of high quality. (3) [deleted] (4) (in COLL) a collective investment undertaking which is a UCITS scheme or authorised under the UCITS Directive or which is subject to supervision and, if applicable, authorised by either the FCA or an authority under the national law of the authorising Member State, and which satisfies the following conditions:
(a) its primary investment objective must be to maintain the net asset value of the undertaking either constant at par (net of earnings), or at the value of the investors’ initial capital plus earnings; (b) it must, with a view to achieving that primary investment objective, invest exclusively in high quality money market instruments with a maturity or residual maturity of no more than 397 days, or regular yield adjustments consistent with such a maturity, and with a weighted average maturity of no more than 60 days. It may also achieve this objective by investing on an ancillary basis in deposits with credit institutions; (c) it must provide liquidity through same day or next day settlement. For the purposes of (b), a money market instrument may be considered to be of high quality if the AIFM or management

FCA 201X/XX company of the collective investment undertaking performs its own documented assessment of the credit quality of money market instruments that allows it to consider a money market instrument as high quality subject to the conditions below:
(i) where one or more credit rating agencies registered and supervised by the FCA or ESMA have provided a rating of the instrument, the AIFM’s or management company’s internal assessment must have regard to, inter alia, those credit ratings; and (ii) while there can be no mechanistic reliance on such external ratings, a downgrade below the two highest short-term credit ratings by any agency registered and supervised by the FCA or ESMA that has rated the instrument will lead the AIFM or UCITS management company to undertake a new assessment of the credit quality of the money market instrument to ensure it continues to be of high quality. [Note: article 1(4) of, and recital 4 to, the MiFID Delegated Directive] rated position (for the purposes of MIPRU and BIPRU 9 (Securitisation), in accordance with Part 1 of Annex IX of the Banking Consolidation Directive (Securitisation definitions) and in relation to a securitisation position) describes a securitisation position which has an eligible credit assessment by an eligible ECAI. [Note: Part 1 of Annex IX of the Banking Consolidation Directive (Securitisation definitions)] ratings based method (for the purposes of BIPRU 9 (Securitisation) and in accordance with
Part 1 of Annex IX of the Banking Consolidation Directive
(Securitisation definitions)) the method of calculating risk weighted exposure amounts for securitisation positions set out in BIPRU 9.12.10R– BIPRU 9.12.19R and BIPRU 9.14.2R. [Note: Part 1 of Annex IX of the Banking Consolidation Directive (Securitisation definitions)] readily realisable security (except in COLL and for the purposes of the definition of non-readily realisable security):
(a) a government or public security denominated in the currency of the country of its issuer; (b) any other security which is:
(i) admitted to official listing on an exchange in an EEA State the UK; or

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(ii) regularly traded on or under the rules of such an exchange; or (iii) regularly traded on or under the rules of a recognised investment exchange or (except in relation to unsolicited real time financial promotions) designated investment exchange; (c) a newly issued security which can reasonably be expected to fall within (b) when it begins to be traded. (in COLL and for the purposes of the definition of non-readily realisable security):
(a) a government or public security denominated in the currency of the country of its issuer; (b) any other security which is:
(i) admitted to official listing on an exchange in the UK or an EEA State; or (ii) regularly traded on or under the rules of such an exchange; or (iii) regularly traded on or under the rules of a recognised investment exchange or (except in relation to unsolicited real time financial promotions) designated investment exchange; (c) a newly issued security which can reasonably be expected to fall within (b) when it begins to be traded. rebalancing of the portfolio (in COLL and in accordance with article 2(1) of the UCITS implementing Directive No 2) means a significant modification of the composition of the scheme property of a UCITS scheme or the portfolio of an EEA UCITS scheme. [Note: article 2(1) of the UCITS implementing Directive No 2] receiving UCITS (in COLL and in accordance with regulations 7 and 8 of the UCITS Regulations 2011) in relation to a UCITS merger, the UCITS scheme or EEA UCITS scheme or sub-fund of that scheme, whether it is an existing scheme (or a sub-fund of it) or one that is being formed for the purpose of that merger, which under the proposed arrangements will be receiving the assets and liabilities of one or more merging UCITS. recognised scheme (1) (other than in LR) a scheme recognised under:
(a) section 264 of the Act (Schemes constituted in other EEA States); or [deleted]

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(b) [deleted]
(c) section 272 of the Act (Individually recognised overseas schemes); or (d) (in COBS 14 and for the purposes of the definitions of nonmainstream pooled investment and packaged product) an EEA UCITS scheme recognised under Part 6 of The Collective Investment Schemes (Amendment etc.) (EU Exit) Regulations 2018. (2) (in LR) a scheme recognised for the purpose of part XVII of the Act recognised third country credit institution a full CRD credit institution that satisfies the following conditions:
(a) its head office is outside the EEA UK; (b) it is authorised by a third country competent authority in the state or territory in which the credit institution's head office is located; and (c) that third country competent authority applies prudential and supervisory requirements to that credit institution that are at least equivalent to those applied in the EEA UK. recognised third country investment firm (1) (in BIPRU and GENPRU 3.2 (Third-country groups) as it applies to a BIPRU firm in relation to a third-country banking and investment group and a banking and investment group) a CAD investment firm that satisfies the following conditions:
(a) its head office is outside the EEA UK; (b) it is authorised by a third country competent authority in the state or territory in which the CAD investment firm's head office is located; (c) that third country competent authority is named in
Part 2 of BIPRU 8 Annex 6 (Non-EEA UK investment
firm regulators’ requirements deemed CRD-equivalent for individual risks); and (d) that investment firm is subject to and complies with prudential rules of or administered by that third country competent authority that are at least as stringent as those laid down in the Banking Consolidation Directive and the Capital Adequacy Directive as applied under the third paragraph of

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article 95(2) of the EU CRR for BIPRU firms in
GENPRU and BIPRU.
(2) (except for the purpose in (1)) (in GENPRU 3.2 (Third country groups) in relation to a third-country banking and investment group and a banking and investment group) an investment firm that falls within the meaning of “investment firm” in article 4(1)(2) of the EU CRR UK CRR and which satisfies the following conditions:
(a) its head office is outside the EEA UK; (b) it is authorised by a third country competent authority in the state or territory in which the investment firm’s head office is located; and (c) that investment firm is subject to and complies with prudential rules of or administered by that third country competent authority that are at least as stringent as those laid down in the EU CRR UK CRR. (3) (in GENPRU 3.1) a firm in either (1) or (2), or both. regulated activity (A) … (B) in the FCA Handbook:(in accordance with section 22 of the Act (Regulated activities) the activities specified in Part II of the Regulated Activities Order (Specified Activities) which are, in summary:
…
(ea) bidding in emissions auctions (article 24A) [deleted]; … (na) managing a UK UCITS (article 51ZA); (nb) acting as trustee or depositary of a UK UCITS (article 51ZB); … regulated entity one of the following:
(a) a credit institution; or
(b) a “Solvency II undertaking” “UK Solvency II firm”, “third country insurance undertaking” or “third country reinsurance undertaking”, each as defined in the PRA Rulebook: Glossary; or

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(c) an investment firm; whether or not it is incorporated in, or has its head office in, an EEA State the UK. An asset management company is treated as a regulated entity for the purposes described in GENPRU 3.1.39R (The financial sectors: asset management companies). An alternative investment fund manager is treated as a regulated entity for the purposes described in GENPRU 3.1.39R (The financial sectors:
alternative investment fund managers). GENPRU 3.1.39R (The financial sectors: asset management companies). regulated information all information which an issuer, or any other person who has applied for the admission of financial instruments to trading on a regulated market without the issuer’s consent, is required to disclose under:
(a) the Transparency Directive DTR; or
(b) articles 17 to 19 of the Market Abuse Regulation; or (c) LR, and DTR. regulated market (1) a multilateral system operated and/or managed by a market operator, which brings together or facilitates the bringing together of multiple third-party buying and selling interests in financial instruments – in the system and in accordance with its non-discretionary rules – in a way that results in a contract, in respect of the financial instruments admitted to trading under its rules and/or systems, and which is authorised and functions regularly and in accordance with the Title III of MiFID a regulated market which is a UK RIE. [Note: article 4(1)(21) 2(1)(13A) of MiFID MiFIR] (2) (in addition, in INSPRU and IPRU(INS) only) a market situated outside the EEA States United Kingdom which is characterised by the fact that:
(a) it meets comparable requirements to those set out in (1); and (b) the financial instruments dealt in are of a quality comparable to those in a regulated market in the United Kingdom. (3) (in FUND and COLL) as in (1) above or an EU regulated market.

FCA 201X/XX regulated mortgage contract
(a) (in relation to a contract) a contract which:
(i) (in accordance with article 61(3) of the Regulated Activities Order) at the time it is entered into, meets the following conditions:
(A) a lender provides credit to an individual or to trustees (the ‘borrower’); and (B) the obligation of the borrower to repay is secured by a mortgage on land in the EEA, at least 40% of which is used, or is intended to be used, in the case of credit provided to an individual, as or in connection with a dwelling; or (in the case of credit provided to a trustee who is not an individual), as or in connection with a dwelling by an individual who is a beneficiary of the trust, or by a related person; where “land” for this purpose means:
(C) in relation to a contract entered into before exit day:
(I) land in the United Kingdom; or
(II) if the contract was entered into on or after 21 March 2016, land in the United Kingdom or within the territory of a State that was an EEA State at the time the contract was entered into; and (D) in relation to a contract entered into on or after exit day, land in the United Kingdom. … regulatory information service or RIS (a) a primary information provider.; or (b) an incoming information society service that has its establishment in an EEA State other than the United Kingdom and that disseminates regulated information in accordance with the minimum standards set out in article 12 of the TD implementing Directive. [deleted] regulatory system the arrangements for regulating a firm or other person in or under the Act, including the threshold conditions, the Principles and other rules, the Statements of Principle, codes and guidance, or in or under the

FCA 201X/XX
CCA, and including any relevant directly applicable provisions of a Directive or Regulation an onshored regulation such as those contained in the MiFID Org Regulation and the EU UK CRR. relevant credit exposures (in accordance with article 140(4) of CRD) exposures, other than those referred to in article 112(a) to (f) of the EU CRR UK CRR (Exposure classes), that are subject to:
(a) the own funds requirements for credit risk under Part Three, Title II of the EU CRR UK CRR; (b) where the exposure is held in the trading book, own funds requirements for specific risk under Part Three, Title IV,
Chapter 2 of the EU CRR UK CRR or incremental default and
migration risk under Part Three, Title IV, Chapter 5 of the EU CRR UK CRR; or (c) where the exposure is a securitisation, the own funds requirements under Part Three, Title II, Chapter 5 of the EU CRR UK CRR. [Note: article 140(4) of CRD] Remuneration Code staff (for an IFPRU investment firm and an overseas firm in SYSC 19A1.1.1R(1)(d) that would have been an IFPRU investment firm if it had been a UK domestic firm) has the meaning given in SYSC 19A.3.4R which is, in summary, an employee whose professional activities have a material impact on the firm’s risk profile, including any employee who is deemed to have a material impact on the firm’s risk profile in accordance with Regulation (EU) 604/2014 of 4 March 2014 (Regulatory technical standards to identify staff who are material risk takers) the Material Risk Takers Regulation. repurchase transaction (in accordance with Article 3(1)(m) of the Capital Adequacy Directive and Article 4(33) of the Banking Consolidation Directive (Definitions) and for the purposes of BIPRU) any agreement in which an undertaking or its counterparty transfers securities or commodities or guaranteed rights relating to title to securities or commodities where that guarantee is issued by a designated investment exchange or recognised investment exchange which holds the rights to the securities or commodities and the agreement does not allow an undertaking to transfer or pledge a particular security or commodity to more than one counterparty at one time, subject to a commitment to repurchase them or substituted securities or commodities of the same description at a specified price on a future date specified, or to be specified, by the transferor, being a repurchase agreement for the undertaking selling the securities or commodities and a reverse repurchase agreement for the undertaking buying them. [Note: article 3(1)(m) of the Capital Adequacy Directive and Article 4(33) of the Banking Consolidation Directive (Definitions)]

FCA 201X/XX respondent (1) (in DISP, FEES 5, CREDS 9 and GEN 7) a firm (except an AIFM qualifier or a UCITS qualifier), payment service provider, electronic money issuer, CBTL firm, designated credit reference agency, designated finance platform, or VJ participant covered by the Compulsory Jurisdiction or Voluntary Jurisdiction of the Financial Ombudsman Service. … retail customer (in accordance with the meaning of ‘consumer’ in article 2(d) of the Distance Marketing Directive) an individual who is acting for purposes which are outside his trade, business or profession. [Note: article 2(d) of the Distance Marketing Directive] revolving exposure (for the purpose of BIPRU 9.13 (Securitisations of revolving exposures with early amortisation provisions) and in accordance with Article 100 of the Banking Consolidation Directive (Securitisations of revolving exposures)) an exposure whereby customers’ outstanding balances are permitted to fluctuate based on their decisions to borrow and repay, up to an agreed limit. [Note: article 100 of the Banking Consolidation Directive (Securitisations of revolving exposures)] risk concentration (in accordance with Article 2(19) of the Financial Groups Directive (Definitions)) all risk exposures with a loss potential which is large enough to threaten the solvency or the financial position in general of the regulated entities in the financial conglomerate, whether such exposures are caused by counterparty risk/credit risk, investment risk, insurance risk, market risk, other risks, or a combination or interaction of these risks. [Note: article 2(19) of the Financial Groups Directive (Definitions)] risk limit system (in COLL and in accordance with article 40(2)(d) of the UCITS implementing Directive) a documented system of internal limits concerning the measures used by a management company to manage and control the relevant risks for each UCITS it manages, taking into account all the risks which may be material to the UCITS, as referred to in the second paragraph of article 38(1) of the UCITS implementing Directive and including, but not limited to, liquidity risk, counterparty risk, and operational risk, and ensuring consistency with the UCITS' risk profile. [Note: article 38(1) and 40(2)(d) of the UCITS implementing Directive] risk of excessive leverage has the meaning in article 4(1)(94) of EU UK CRR. risk position (in accordance with Part 1 of Annex III of the Banking Consolidation Directive (Definitions) and for the purpose of BIPRU 13 (The calculation of counterparty risk exposure values for financial

FCA 201X/XX derivatives, securities financing transactions and long settlement transactions)) a risk number that is assigned to a transaction under the CCR standardised method following a predetermined algorithm. [Note: Part 1 of Annex III of the Banking Consolidation Directive (Definitions)] rollover risk (in accordance with Part 1 of Annex III of the Banking Consolidation Directive (Definitions) and for the purpose of BIPRU 13 (The calculation of counterparty risk exposure values for financial derivatives, securities financing transactions and long settlement transactions)) the amount by which expected positive exposure is understated when future transactions with a counterpart are expected to be conducted on an ongoing basis; the additional exposure generated by those future transactions is not included in calculation of expected positive exposure. [Note: Part 1 of Annex III of the Banking Consolidation Directive (Definitions)] RRD early intervention condition the requirements of:
(a) the EU CRR UK CRR; or
(b) the laws, regulations and administrative provisions necessary to comply with the UK provisions which implemented the CRD; or (c) the laws, regulations and administrative provisions necessary to comply with the UK provisions which implemented title II of MiFID II; or (d) articles 3 to 7, 14 to 17, 24, 25 and 26 of MiFIR. [Note: article 27(1) of RRD] RRD institution (a) a credit institution; or (b) an investment firm that is subject to the initial capital requirement in article 28(2) of the CRD (a €730k investment firm) an IFPRU 730K firm. [Note: article 2(1)(23) of RRD] RRD group a group that:
(a) includes an RRD institution; and
(b) is headed by an EEA parent undertaking a UK parent undertaking.

FCA 201X/XX scheme of arrangement
(in COLL) an arrangement relating to an authorised fund (“transferor fund”) or to a sub-fund of a scheme that is an umbrella (“transferor sub-fund”) under which:
…
This arrangement includes an arrangement that constitutes a domestic UCITS merger or a cross-border UCITS merger. sectoral rules (in relation to a financial sector) rules and requirements relating to the prudential supervision of regulated entities applicable to regulated entities in that financial sector as follows:
(a) (for the purposes of GENPRU 3.1.12R (Definition of financial conglomerate: Solvency requirement)) EEA UK prudential sectoral legislation regulation for that financial sector together with as appropriate the rules and requirements in (c); or … (h) references to the appropriate regulator’s sectoral rules are to sectoral rules in the form of rules and, as applicable, the EU CRR UK CRR. secured lending transaction (in accordance with point 2 of Part 1 of Annex VIII of the Banking Consolidation Directive (Eligibility of credit risk mitigation) and for the purposes of BIPRU) any transaction giving rise to an exposure secured by collateral which does not include a provision conferring upon the person with the exposure the right to receive margin frequently. [Note: point 2 of Part 1 of Annex VIII of the Banking Consolidation Directive (Eligibility of credit risk mitigation)] securities and futures firm a firm whose permitted activities include designated investment business or bidding in emissions auctions, which is not an authorised professional firm, bank, BIPRU firm (unless it is an exempt BIPRU commodities firm), IFPRU investment firm (unless it is an exempt IFPRU investment firm), building society, collective portfolio management firm, credit union, friendly society, ICVC, insurer, media firm, or service company, incoming EEA firm (without a top-up permission), incoming Treaty firm (without a top-up permission) or UCITS qualifier (without a top-up permission), whose permission does not include a requirement that it comply with IPRU(INV) 5 (Investment management firms) or 13 (Personal investment firms), and which is within (a), (b), (c), (d), (e) , (f), (g), (ga) or (h):
… securities financing transaction
(1) (in COBS) an instance of stock lending or stock borrowing or the lending or borrowing of other financial instruments, a

FCA 201X/XX repurchase or reverse repurchase transaction, or a buy-sell back or sell-buy back transaction. (1A) (in COLL and FUND) a transaction defined in article 3(11) of the EU Securities Financing Transactions Regulation as it had effect immediately before exit day, as follows:
(a) a repurchase transaction, as defined in article 3(9) of the SFTR that regulation; (b) securities or commodities lending and securities or commodities borrowing as defined in article 3(7) of the SFTR that regulation; (c) a buy-sell back transaction or sell-buy back transaction as defined in article 3(8) of the SFTR that regulation; and (d) a margin lending transaction as defined in article 3(10) of the SFTR that regulation. (1B) (in CASS) a securities financing transaction as defined in
article 3(11) of the SFTR.
[Note: article 1(3) of the MiFID Delegated Directive] (2) (in any other case) any of the following:
(a) a repurchase transaction; or
(b) a securities or commodities lending or borrowing transaction; or (c) a margin lending transaction. securities or commodities lending or borrowing transaction (in accordance with Article 4(34) of the Banking Consolidation Directive and Article 3(1)(n) of the Capital Adequacy Directive (Definitions) and for the purposes of BIPRU) any transaction in which an undertaking or its counterparty transfers securities or commodities against appropriate collateral subject to a commitment that the borrower will return equivalent securities or commodities at some future date or when requested to do so by the transferor, that transaction being securities or commodities lending for the undertaking transferring the securities or commodities and being securities or commodities borrowing for the undertaking to which they are transferred. [Note: article 4(34) of the Banking Consolidation Directive and Article 3(1)(n) of the Capital Adequacy Directive (Definitions)]

FCA 201X/XX
Securities Financing
Transactions
Regulation the UK version of Regulation (EU) 2015/2365 of the European Parliament and of the Council of 25 November 2015 on transparency of securities financing transactions and of reuse and amending Regulation (EU) No 648/2012 (http://eur-lex.europa.eu/legalcontent/EN/TXT/?uri=CELEX:32015R2365), which is part of UK law by virtue of the EUWA. securitisation (1) (subject to (2) and (3)) a process by which assets are sold to a bankruptcy-remote special purpose vehicle in return for immediate cash payment and that vehicle raises the immediate cash payment through the issue of debt securities in the form of tradable notes or commercial paper. (2) (in accordance with Article 4(36) of the Banking Consolidation Directive (Definitions) and in BIPRU and MIPRU 4) a transaction or scheme whereby the credit risk associated with an exposure or pool of exposures is tranched having the following characteristics:
(a) payments in the transaction or scheme are dependent upon the performance of the exposure or pool of exposures; and (b) the subordination of tranches determines the distribution of losses during the ongoing life of the transaction or scheme. [Note: article 4(36) of the Banking Consolidation Directive (Definitions)] (3) (in IFPRU) has the meaning in article 4(1)(61) of the EU CRR UK CRR. securitisation position (1) (in GENPRU, MIPRU and BIPRU) (in accordance with Article 4(40) (Definitions) and Article 96 (Securitisation) of the Banking Consolidation Directive) an exposure to a securitisation within the meaning of paragraph (2) of the definition of securitisation; and so that:
(a) where there is an exposure to different tranches in a securitisation, the exposure to each tranche must be considered as a separate securitisation position; (b) the providers of credit protection to securitisation positions must be considered to hold positions in the securitisation; and (c) securitisation positions include exposures to a securitisation arising from interest rate or currency derivative contracts.

FCA 201X/XX
[Note: article 4(1)(62) and 245(3) of the UK CRR] (2) (in IFPRU) has the meaning in article 4(1)(62) of the EU CRR UK CRR. securitisation special purpose entity (1) (in accordance with Article 4(44) of the Banking Consolidation Directive (Definitions) and for the purposes of BIPRU) a corporation, trust or other entity, other than a credit institution, organised for carrying on a securitisation or securitisations (within the meaning of paragraph (2) of the definition of securitisation), the activities of which are limited to those appropriate to accomplishing that objective, the structure of which is intended to isolate the obligations of the SSPE from those of the originator, and the holders of the beneficial interests in which have the right to pledge or exchange those interests without restriction. [Note: article 4(44) of the Banking Consolidation Directive (Definitions)] … security (1) (except in LR and CONC) (in accordance with article 3(1) of the Regulated Activities Order (Interpretation)) any of the following investments specified in that Order:
…
[Editor’s note: The current policy intention for COLL is to reflect the current scope of this article in the Regulated Activities Order. If amendments are made to the scope of this article in the relevant statutory instrument, we will amend the drafting of this glossary term to deliver the stated policy outcome.] senior management (1) (in BIPRU 7.10 (Use of a value at risk model) and in relation to a firm) the firm’s governing body and those of the firm's senior managers and other senior management who have responsibilities relating to the measurement and control of the risks which the firm’s VaR model is designed to measure or whose responsibilities require them to take into account those risks. (2) (in SYSC (except SYSC 4.3A) and IFPRU and in accordance with article 3(9) of CRD 4(1)(10) of the UK CRR) those persons who are a natural person and who exercise executive functions in an institution and who are responsible and accountable to the management body for the day-to-day management of the institution. (3) (in SYSC 4.3A and COBS 2.3B and in accordance with article 4.1(37) of MiFID) those persons who are a natural person,

FCA 201X/XX who exercise executive functions in common platform firms and who are responsible and accountable to the management body for the day-to-day management of the firm, including for the implementation of the policies concerning the distribution of services and products to clients by it and its personnel. [Note: article 4.1(37) of MiFID] senior personnel (1) … (2) (in relation to a management company and in accordance with
article 3(4) of the UCITS implementing Directive) the person
or persons who effectively conduct the business of the management company. [Note: article 3(4) of the UCITS implementing Directive] short selling regulation the UK version of regulation (EU) No 236/2012 of the European Parliament and of the Council of 14 March 2012 on short selling and certain aspects of credit default swaps, which is part of UK law by virtue of the EUWA. Single Market Directives (a) the Banking Consolidation Directive (to the extent it applies applied to CAD investment firms); (aa) the CRD; (b) the Solvency II Directive; (ba) [deleted] (c) MiFID; (d) the IDD; (da) MCD; (e) the UCITS Directive; and (f) AIFMD. small authorised UK AIFM a UK AIFM which:
(a) is a small AIFM; and
(b) has not opted in to AIFMD in accordance with article 3(4) of AIFMD to become a full-scope UK AIFM exercised the option to meet the full requirements applying to a full-scope AIFM.

FCA 201X/XX small non-EEA UK
AIFM a non-EEA UK AIFM that is a small AIFM. small and mediumsized enterprise or SME … (3) (in IFPRU) has the meaning in article 4(1)(128D) of the UK CRR. SMCR banking firm any of the following:
…
(c) a third-country an overseas SMCR banking firm.
SMCR financial activities any of the following:
…
(e) activities listed in points 2 to 15 of Annex I to the CRD (List of activities subject to mutual recognition) the list of Annex 1 activities. SME growth market a multilateral trading facility that is registered as an SME growth market in accordance with article 33 of MiFID MAR 5.10. [Note: article 4(1)(12) of MiFID] SMF manager (in relation to an SMCR firm) a person who has approval under section 59 of the Act (Approval for particular arrangements) to perform a designated senior management function in relation to the carrying on by that SMCR firm of a regulated activity. A person treated as approved under section 59ZZA of the Act (as treated as being inserted into the Act by the EEA Passport Rights (Amendment, etc., and Transitional Provisions) (EU Exit) Regulations 2018 (SI 2018/[XXXX]) to perform a designated senior manager function is an SMF manager in that capacity. Solvency II firm a firm which is any of:
(a) a “UK Solvency II firm” as defined in chapter 2 of the PRA Rulebook: Solvency II Firms: Insurance General Application; (b) a third-country insurance or reinsurance undertaking, namely an undertaking that would require authorisation Part 4A permission as an insurance or reinsurance undertaking in accordance with article 14 of the Solvency II Directive if its head office was situated in the EEA United Kingdom;

FCA 201X/XX
(c) an undertaking authorised in accordance with a non-UK EEA State’s measures which implement article 14 of the Solvency II Directive; [deleted] (d) the Society and, separately, a managing agent; and (e) an insurance special purpose vehicle; (f) in SUP TP 7 and SUP TP 8, SYSC, COCON, SUP 10C and DEPP only, a large non-directive insurer; but excluding any firm to the extent that rule 2 of PRA Rulebook:
Solvency II Firms: Transitional Measures disapplies relevant rules implementing which implemented the Solvency II Directive. Solvency II Regulations directly applicable EU Commission Delegated Regulations adopted in accordance with onshored regulations which were previously EU regulations made under the Solvency II Directive. sovereign issuer (as defined in article 2(1)(d) of the short selling regulation) any of the following that issues debt instruments: means the United Kingdom, including any government department, or an agency or a special purpose vehicle of the United Kingdom. (a) the EU; or (b) a Member State including a government department, an agency, or a special purpose vehicle of the Member State; or (c) in the case of a federal Member State, a member of the federation; or (d) a special purpose vehicle for several Member States; or (e) an international financial institution established by two or more Member States which has the purpose of mobilising funding and provide financial assistance to the benefit of its members that are experiencing or threatened by severe financing problems; or (f) the European Investment Bank. specific risk (1) (in SYSC) unique risk that is due to the individual nature of an asset and can potentially be diversified. (2) (in GENPRU and BIPRU and in accordance with paragraph 12 of Annex I of the Capital Adequacy Directive) the risk of a price change in an investment due to factors related to its issuer or, in the case of a derivative, the issuer of the underlying investment. [Note: paragraph 12 of Annex I of the Capital Adequacy Directive]

FCA 201X/XX specific wrong-way risk
(in accordance with Part 1 of Annex III of the Banking Consolidation Directive (Definitions) and for the purpose of BIPRU 13 (The calculation of counterparty risk exposure values for financial derivatives, securities financing transactions and long settlement transactions)) the risk that arises when the exposure to a particular counterparty is positively correlated with the probability of default of the counterparty due to the nature of the transactions with the counterparty; a firm is exposed to specific wrong-way risk if the future exposure to a specific counterparty is expected to be high when the counterparty's probability of default is also high. [Note: Part 1 of Annex III of the Banking Consolidation Directive (Definitions)] specified investment any of the following investments specified in Part III of the Regulated Activities Order (Specified Investments):
…
[Editor’s note: The current policy intention for COLL is to reflect the current scope of this Part of the Regulated Activities Order. If amendments are made to the scope of this Part in the relevant statutory instrument, we will amend the drafting of this glossary term to deliver the stated policy outcome.] sponsor (1) … (2) (in BIPRU), in accordance with Article 4(42) of the Banking Consolidation Directive (Definitions) and in MIPRU 4 and in relation to a securitisation within the meaning of paragraph (2) of the definition of securitisation, an undertaking other than an originator that establishes and manages an asset backed commercial paper programme or other securitisation scheme that purchases exposures from third party entities. [Note: article 4(42) of the Banking Consolidation Directive (Definitions)] (3) in IFPRU and FUND) has the meaning in article 4(1)(14) of the EU CRR UK CRR. standardised approach (for the purposes of BIPRU) one of the following:
…
(e) (where the one of the approaches in (a) to (d) (c) is being applied on a consolidated basis) that approach as applied on a consolidated basis in accordance with BIPRU 8 (Group risk - consolidation).; or

FCA 201X/XX
(f) when the reference is to the rules of or administered by a regulatory body other than the appropriate regulator, whatever corresponds to the approach in (a) to (e), as the case may be, under those rules. [deleted] state finance organisation a legal person other than a company:
(a) which is a national of an EEA State a state; … (d) which is financed by means of the resources they have raised and resources provided by the EEA State state; and (e) the debt securities issued by it are considered by the law of the relevant EEA State state as securities issued or guaranteed by that state. state monopoly a company or other legal person which is a national of an EEA state a state and which:
(a) in carrying on its business benefits from a monopoly right granted by an EEA state a state; and (b) is set up by or pursuant to a special law or whose borrowings are unconditionally and irrevocably guaranteed by an EEA state a state or one of the federated states of an EEA state a state’s federated states. State of the commitment (in accordance with paragraph 6(1) of Schedule 12 to the Act (Transfer schemes: certificates)) (in relation to a commitment entered into at any date):
(a) if the policyholder is an individual, the State in which he had his habitual residence at that date; (b) if the policyholder is not an individual, the State in which the establishment of the policyholder to which the commitment relates was established at that date; in this definition, “commitment” means (in accordance with article 2 of the Financial Services and Markets Act 2000 (Control of Business Transfers) (Requirements on Applicants) Regulations 2001 (SI 2001/3625)) any contract of insurance of a kind referred to in UK provisions which implemented article 2(3) of the Solvency II Directive. State of the risk (in accordance with paragraph 6(3) of Schedule 12 to the Act (Transfer schemes: certificates)) (in relation to the EEA State in which a risk is situated):

FCA 201X/XX
(a) if the insurance relates to a building or to a building and its contents (so far as the contents are covered by the same policy), the EEA State state in which the building is situated; (b) if the insurance relates to a vehicle of any type, the EEA State state of registration; (ba) if the insurance relates to a vehicle dispatched from one EEA State state to another, in respect of the period of 30 days beginning with the day on which the purchaser accepts delivery, the EEA State state of destination (and not, as provided by sub-paragraph (b), the EEA State state of registration); [Note: article 15(1) of the Consolidated Motor Insurance Directive] (c) in the case of policies of a duration of four months or less covering travel or holiday risks (whatever the class concerned), the EEA State state in which the policyholder took out the policy; (d) in a case not covered by (a) to (c):
(i) if the policyholder is an individual, the EEA State state in which he has his habitual residence at the date when the contract is entered into; and (ii) otherwise, the EEA State state in which the establishment of the policyholder to which the policy relates is situated at that date. sub-consolidated basis has the meaning in article 4(1)(49) of the EU CRR UK CRR. subsidiary (1) (except in relation to MiFID business) (as defined in section 1159(1) of the Companies Act 2006 (Meaning of “subsidiary”, etc)) (in relation to another body corporate (“H”)) a body corporate of which H is a holding company. (2) (in relation to MiFID business) a subsidiary undertaking within the meaning of article 2(10) and article 22 of the Accounting Directive, including any subsidiary of a subsidiary undertaking of an ultimate parent undertaking. (3) (for the purpose of IFPRU) has the meaning in article 4(1)(16) of the EU CRR UK CRR. [Note: article 4 (1)(33) of MiFID]

FCA 201X/XX suitability report a report which a firm must provide to its client which, among other things, explains why the firm has concluded that a recommended transaction is suitable for the client and which is provided pursuant to:
…
(c) GEN 2.2.22AR and COBS 9A.3.3EUUK where the firm is carrying on the equivalent business of a third country investment firm; (d) COBS 9A.1.2R and COBS 9A.3.3EUUK where the firm is carrying on MiFID optional exemption business; or … summary resolution communication either:
(1) in relation to a MiFID complaint, a response in accordance with DISP 1.1A.24EUUK, DISP 1.1A.25EUUK and DISP 1.1A.26R; or (2) in relation to all other complaints, has the meaning given in DISP 1.5.4R. supervisory authority (1) (in accordance with article 4(1)(al) of AIFMD) (for a non-EEA UK AIF) the national authority or authorities of the non- EEA State empowered by law or regulation to supervise AIFs in that non- EEA State. [Note: article 4(1)(al) of AIFMD] (2) (in accordance with article 4(1)(am) of AIFMD) (for a nonEEA UK AIFM) the national authority or authorities of the non-EEA State empowered by law or regulation to supervise AIFMs in that non-EEA State. [Note: article 4(1)(am) of AIFMD] supervisory formula method (for the purposes of BIPRU 9 (Securitisation), in relation to a securitisation within the meaning of paragraph (2) of the definition of securitisation and in accordance with Part 1 of Annex IX of the Banking Consolidation Directive (Securitisation definitions)) the method of calculating risk weighted exposure amounts for securitisation positions set out in BIPRU 9.12.21R – BIPRU 9.12.23R and BIPRU 9.14.3R. [Note: Part 1 of Annex IX of the Banking Consolidation Directive (Securitisation definitions)]

FCA 201X/XX supervisory function (1) any function within a common platform firm that is responsible for the supervision of its senior personnel. (2) (in relation to a management company and in accordance with
article 3(6) of the UCITS implementing Directive) the relevant
persons or body or bodies responsible for the supervision of its senior personnel and for the assessment and periodic review of the adequacy and effectiveness of the risk management process and of the policies, arrangements and procedures put in place to comply with its obligations under the UCITS Directive of the firm. [Note: article 3(6) of the UCITS implementing Directive] Swiss general insurance company (in accordance with article 1(2) of the Financial Services and Markets Act 2000 (Variation of Threshold Conditions) Order 2001 (SI 201/2507)) a person:
(a) whose head office is in Switzerland;
(b) who is authorised by the supervisory authority in Switzerland as mentioned in article 7.1 of the Swiss Treaty Agreement; and (c) who is seeking to carry on, or is carrying on, from a branch in the United Kingdom, a regulated activity consisting of the effecting or carrying out of contracts of insurance of a kind which is subject to that agreement. [Editor’s note: In due course, this definition will be updated to reflect any amendments made to the Financial Services and Markets Act 2000 (Variation of Threshold Conditions) Order 2001 (SI 201/2507).] Swiss Treaty agreement the agreement of 10 October 1989 between the European Economic Community and the Swiss Confederation on direct insurance other than life insurance, approved on behalf of the European Economic Community by the Council Decision of 20 June 1999 (No 91/370/EEC). [Editor’s note: In due course, this definition will be updated to reflect any agreement entered into between the United Kingdom and Switzerland.] synthetic risk and reward indicator (in COLL and in accordance with article 2(2) of the UCITS implementing Directive No 2) a synthetic indicator within the meaning of article 8 of the KII Regulation. [Note: article 2(2) of the UCITS implementing Directive No 2] synthetic securitisation (in accordance with Article 4(38) of the Banking Consolidation Directive (Definitions) and for the purpose of BIPRU) a securitisation (within the meaning of paragraph (2) of the definition of securitisation) where the tranching is achieved by the use of credit derivatives or

FCA 201X/XX guarantees, and the pool of exposures is not removed from the balance sheet of the originator. [Note: article 4(38) of the Banking Consolidation Directive (Definitions] systematic internaliser (has the meaning in article 4(1)(20) of MiFID) (in summary) an investment firm which, on an organised, frequent systematic and substantial basis, deals on own account by executing client orders outside a regulated market, an MTF or an OTF without operating a multilateral system. [Note: article 4(1)(20) of MiFID] an investment firm which:
(a) on an organised, frequent, systemic and substantial basis, deals on own account when executing client orders outside a UK regulated market, UK MTF or UK OTF without operating a multilateral system; and (b) either:
(i) satisfies the criteria set out in Article 12, 13, 14, 15 or 16 of, the MiFID Org Regulation assessed in accordance with Article 17 of that Regulation; or (ii) has chosen to opt-in to the systemic internaliser regime; For these purposes:
(c) the frequent and systemic basis is to be measured either by the number of OTC trades in the financial instrument carried out by the investment firm on own account when executing client orders; (d) the substantial basis is to be measured either by the size of the OTC trading carried out by the investment firm in relation to the total trading of the investment firm in a specific financial instrument or by the size of the OTC trading carried out by the investment firm in relation to the total trading in the relevant area (within the meaning of article 14(5A) MiFIR in a specific financial instrument; [Note: article 2(1)(12) and (12A) of MiFIR] systemically important institution (in accordance with article 3(30) of CRD) an EEA parent institution an EEA parent financial holding company , an EEA parent mixed financial holding company or an institution the failure or malfunction of which could lead to systemic risk (in IFPRU) has the meaning in
article 4(1)(128D) of the UK CRR.
[Note: article 3(30) of CRD]

FCA 201X/XX third country a territory or country which is not an EEA State the United Kingdom. third-country banking and investment group a banking and investment group that meets the following conditions:
(a) it is headed by:
(i) a credit institution; or
(ii) an asset management company; or
(iii) an investment firm; or
(iv) a financial holding company; that has its head office outside the EEA UK; and (b) it is not part of a wider EEA banking and investment group consolidation group that is required by UK prudential sectoral regulation for the banking sector or the investment services sector to be subject to consolidated supervision. third country benchmark contributor a firm which:
(1) contributes input data to a BMR benchmark administrator; (2) is located in a non-EU state outside the UK; and (3) either (a) is a supervised entity; or (b) would be a supervised entity if it were located in the EU UK. third country BIPRU firm (1) (in BIPRU (except in BIPRU 12) and SYSC 19C) an overseas firm that:
(a) is not an EEA firm; [deleted]
(b) has its head office outside the EEA; and [deleted] (c) would be a BIPRU firm if it had been a UK domestic firm, it had carried on all its business in the United Kingdom and had obtained whatever authorisations for doing so are required under the Act. (2) (in BIPRU 12) an overseas firm that:

FCA 201X/XX
(a) is a bank;
(b) is not an EEA firm; and
(c) has its head office outside the EEA. [deleted] third country competent authority a regulatory body of a state or territory that is not an EEA State other than the UK. third-country competent authority the authority of a country or territory which is not an EEA State the UK that is empowered by law or regulation to supervise (whether on an individual or group-wide basis) regulated entities. third-country countercyclical buffer authority (1) the authority of a third country empowered by law or regulation with responsibility for setting the countercyclical buffer rate for that third country; or (2) the European Central Bank when it carries out the task of setting a countercyclical buffer rate for an EEA State conferred on it by article 5(2) of Council Regulation (EU) No 1024/2013, conferring specific tasks on the European Central Bank concerning policies relating to the prudential supervision of credit institutions. third-country financial conglomerate a financial conglomerate that is of a type that falls under Article 5(3) of the Financial Groups Directive, which in summary is a financial conglomerate headed by a regulated entity or a mixed financial holding company that has its head office outside the EEA UK. third country firm (in SYSC) either:
(a) a third country investment firm; or
(b) the UK branch of a non EEA bank non-UK bank. third country IFPRU 730k firm an overseas firm that:
(a) is not an EEA firm;
(b) has its head office outside the EEA; and (c) would be an IFPRU 730k firm if it had been a UK domestic firm, had carried on all of its business in the United Kingdom and had obtained whatever authorisations for doing so as are required under the Act. third country investment firm a firm which would be a MiFID investment firm if it had its head office in the EEA UK.

FCA 201X/XX third country investment services undertaking (in BIPRU) a CAD investment firm, a financial institution or an asset management company in a non-EEA state country other than the UK. tier 2 capital as defined in article 71 of the EU CRR UK CRR. tier 2 instruments a capital instrument that qualify as tier 2 instruments under article 62 of the EU CRR UK CRR. total return swap (in COLL and FUND) a derivative contract defined in article 3(18) of the EU Securities Financing Transactions Regulation as it had effect immediately before exit day. total risk exposure amount the total risk exposure amount of a firm calculated in accordance with
article 92(3) of the EU CRR UK CRR (Own funds requirements).
trading book (1) [deleted]
(2) (in BIPRU and GENPRU in relation to a BIPRU firm) has the meaning in BIPRU 1.2 (Definition of the trading book) which is in summary, all that firm’s positions in CRD financial instruments and commodities held either with trading intent or in order to hedge other elements of the trading book, and which are either free of any restrictive covenants on their tradability or able to be hedged. (3) (in BIPRU and GENPRU and in relation to a person other than a BIPRU firm) has the meaning in (2) with references to a firm replaced by ones to a person. (4) (in IFPRU and in relation to an IFPRU investment firm) has the meaning in article 4(1)(86) of the EU CRR UK CRR. (5) (in DTR) has the meaning in article 4.1(86) of EU CRR UK CRR. trading day … (3) (in FINMAR) as defined in article 2(1)(p) of the short selling regulation, a trading day as referred to in article 4 of Regulation (EC) No 1287/2006 in relation to a trading venue, means a day during which the trading venue concerned is open for trading. trading venue (1) (except in FINMAR) a regulated market, an EU regulated market, an MTF or an OTF. [Note: article 4(1)(24) of MiFID] (2) (in FINMAR) (as defined in article 2(1)(l) of the short selling regulation) a regulated market or an MTF:

FCA 201X/XX
(i) a UK regulated market within the meaning of point (13B) of article 2(1) of Regulation 2014/600/EU; (ii) a UK multilateral trading facility within the meaning of point (14A) of article 2(1) of Regulation 2014/600/EU. [Note: article 4(1)(24) of MiFID] (3) (4) (in MAR other than in MAR 1) a regulated market or an MTF. (in MAR 1) a regulated market, an EU regulated market or an MTF. traditional securitisation (in accordance with Article 4(37) of the Banking Consolidation Directive (Definitions) and for the purpose of BIPRU and MIPRU) a securitisation (within the meaning of paragraph (2) of the definition of securitisation) involving the economic transfer of the exposures being securitised to a securitisation special purpose entity which issues securities; and so that:
(a) this must be accomplished by the transfer of ownership of the securitised exposures from the originator or through subparticipation; and (b) the securities issued do not represent payment obligations of the originator. [Note: article 4(37) of the Banking Consolidation Directive (Definitions)] tranche (in accordance with Article 4(39) of the Banking Consolidation Directive (Definitions) and in relation to a securitisation within the meaning of paragraph (2) of the definition of securitisation and for the purposes of BIPRU and MIPRU) a contractually established segment of the credit risk associated with an exposure or number of exposures, where a position in the segment entails a risk of credit loss greater than or less than a position of the same amount in each other such segment, without taking account of credit protection provided by third parties directly to the holders of positions in the segment or in other segments. [Note: article 4(39) of the Banking Consolidation Directive (Definitions)] transferable security (1) (in PR and LR) (as defined in section 102A of the Act) anything which is a transferable security for the purposes of MiFID MiFIR, other than money market instruments for the purposes of that directive MiFIR which have a maturity of less than 12 months.

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(2) (in COLL) an investment within COLL 5.2.7R (Transferable securities) in relation to schemes falling under COLL 5. (3) those classes of securities which are negotiable on the capital market, with the exception of instruments of payment, such as:
(a) shares in companies and other securities equivalent to shares in companies, partnerships or other entities, and depositary receipts in respect of shares; (b) bonds or other forms of securitised debt, including depositary receipts in respect of such securities; and (c) any other securities giving the right to acquire or sell any such transferable securities or giving rise to a cash settlement determined by reference to transferable securities, currencies, interest rates or yields, commodities or other indices or measures. [Note: article 4(1)(44) 2(24) of MiFID MiFIR] UCITS undertakings for collective investment in transferable securities that are established in accordance with the UCITS Directive a UCITS scheme or an EEA UCITS scheme. UCITS firm a firm which:
(a) is a management company (whether or not it is also the manager of AIFs or the operator of other collective investment schemes); and (b) does not have a Part 4A permission (or an equivalent permission from its Home State regulator) to carry on any regulated activities other than those which are in connection with, or for the purpose of, managing collective investment undertakings. UCITS investment firm a firm which:
(a) is a management company (whether or not it is also the manager of AIFs or the operator of other collective investment schemes); and (b) has a Part 4A permission (or an equivalent permission from its Home State regulator) to manage investments where:
(i) the investments managed include one or more of the instruments listed in Section C of Annex 1 to MiFID financial instruments; and

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(ii) the permission extends to activities permitted by referred to in article 6(3) of the UCITS Directive as well as those permitted by referred to in article 6(2). UCITS level 2 regulation the UK version of Commission delegated regulation (EU) 2016/438 of 17 December 2015 supplementing Directive 2009/65/EC of the European Parliament and of the Council with regard to the obligations of depositaries, which is part of UK law by virtue of the EUWA, as amended by section 8 of the EUWA. (http://eurlex.europa.eu/legalcontent/EN/TXT/?qid=1459519567928&uri=CELEX:32016R0438) UCITS management company (1) (except in relation to MiFID business) a firm which is either:
(a) a UCITS firm; or
(b) a UCITS investment firm.
(2) (in relation to MiFID business) a management company as defined in the UCITS Directive. … UCITS marketing notification (in COLL) a notification made before exit day in respect of a UCITS scheme, for the purpose of marketing units in another EEA State, pursuant to:
(a) paragraph 20B(5) (Notice of intention to market) of Schedule 3 (EEA Passport Rights) to the Act.; or (b) article 46 of the Council Directive of 20 December 1985 on the co-ordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) (No 85/611/EEC). UCITS merger (in COLL and in accordance with article 2(1)(p) of the UCITS Directive regulations 7 and 8 of the UCITS Regulations 2011) a merger between one or more UCITS schemes or between one or more UCITS schemes and EEA UCITS schemes being an operation whereby:
(a) one or more merging UCITS, on being dissolved without going into liquidation, transfers all of its assets and liabilities to an existing receiving UCITS, in exchange for the issue to its Unitholders of units of the receiving UCITS and, if applicable, a cash payment not exceeding 10% of the net asset value of those units (a “merger by absorption”); or [deleted] (b) two or more merging UCITS, on being dissolved without going into liquidation, transfer all of its assets and liabilities to a receiving UCITS which they form, in exchange for the issue to their Unitholders of units of the receiving UCITS and, if

FCA 201X/XX applicable, a cash payment not exceeding 10% of the net asset value of those units (a “merger by formation of a new UCITS”); or [deleted] (c) one or more merging UCITS, which continue to exist until the liabilities have been discharged, transfer its net assets to another receiving UCITS, and for this purpose the merging UCITS and the receiving UCITS may be sub-funds of the same UCITS (a “merger by scheme of arrangement”);. but at least one of which is established in the United Kingdom. UCITS scheme (a) an authorised fund authorised by the FCA in accordance with the UCITS Directive: means a UK UCITS. (i) with the sole object of collective investment in transferable securities or in other liquid financial instruments permitted by COLL 5.2 (General investment powers and limits for UCITS schemes) of capital raised from the public and which operates on the principle of risk-spreading; and (ii) with units which are, at the request of Unitholders, repurchased or redeemed, directly or indirectly, out of the scheme’s assets; and for this purpose action taken by or on behalf of a scheme to ensure that the stock exchange value of its units does not significantly vary from their net asset value is to be regarded as equivalent to that repurchase or redemption; or (b) an umbrella, each of whose sub-funds would be a UCITS scheme if it had a separate authorisation order; unless:
(c) [deleted]
(d) the scheme's units under its instrument constituting the fund, may be sold only to the public in non-EEA States; or (e) the scheme (other than a master UCITS which has at least two feeder UCITS as Unitholders) raises capital without promoting the sale of its units to the public within the EEA or any part of it. [Note: article 1 of the UCITS Directive] UK consolidation group (1) (for the purposes of SYSC as it applies to a CRR firm) the group of undertakings which are included in the consolidated situation of a UK parent institution in a Member State, an EEA parent institution, an EEA a UK parent financial holding company or an EEA a UK parent mixed financial holding

FCA 201X/XX company (including any undertaking which is included in that consolidation because of a consolidation article 12(1) relationship, article 18(5) relationship or article 18(6) relationship). (2) (for the purposes of BIPRU and SYSC as it applies to a BIPRU firm) has the meaning in BIPRU 8.2.4R (Definition of UK consolidation group), which is in summary the group that is identified as a UK consolidation group in accordance with the decision tree in BIPRU 8 Annex 1R (Decision tree identifying a UK consolidation group); in each case only persons included under BIPRU 8.5 (Basis of consolidation) are included in the UK consolidation group. UK countercyclical buffer authority (for the purposes of IFPRU 10.3 (Countercyclical capital buffer) and in accordance with article 7 of The Capital Requirements (Capital Buffers and Macro-prudential Measures) Regulations 2014) the Bank of England, designated for the purpose of article 136(1) of the CRD in
article 7 of The Capital Requirements (Capital Buffers and
Macroprudential Measures) Regulations 2014.
UK firm (1) (except in REC) (as defined in paragraph 10 of Schedule 3 to the Act (EEA Passport Rights)) either a an authorised person:
(a) whose head office is in the United Kingdom and who has an EEA right to carry on activity in an EEA State other than the United Kingdom; or (b) whose registered office is in the United Kingdom [and who has an EEA right which derives from the IDD to carry on an activity in an EEA State other than the United Kingdom]. (2) (in REC) means an investment firm or credit institution which has a Part 4A permission to carry on one or more regulated activities. [deleted] UK lead regulated firm a UK firm that:
(a) is not part of a group that is subject to consolidated supervision by the FCA or the PRA or any other regulatory body; or (b) is part of a group that is subject to consolidated supervision by the FCA or the PRA and that group is not part of a wider group that is subject to consolidated supervision by a regulatory body other than the FCA or the PRA. For the purposes of this definition:

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(c) Consolidated supervision of a group of persons means supervision of the adequacy of financial and other resources of that group on a consolidated basis. (d) It is not relevant whether or not any supervision by another regulatory body has been assessed as equivalent under the CRD and EU CRR UK CRR or the Financial Groups Directive. (e) If the group is a consolidation group or financial conglomerate of which the FCA or the PRA is lead regulator that is headed by an undertaking that is not itself the subsidiary undertaking of another undertaking the firm is a ‘UK lead regulated firm’. This definition is not related to the defined term lead regulated firm. unauthorised AIFM a person who is not an authorised person but who is:
(a) a small registered UK AIFM; or
(b) a small registered EEA AIFM, i.e. an EEA AIFM that is a small AIFM that has not opted in to become a full-scope EEA AIFM; or [deleted] (c) a full-scope EEA AIFM that is entitled to market an AIF in the United Kingdom following a notification under regulation 57 of the AIFMD UK regulation; or [deleted] (d) an a small non-EEA UK AIFM that is entitled to market an AIF in the United Kingdom following a notification under regulation 58 of the AIFMD UK regulation; or (e) an above-threshold non-EEA UK AIFM to which the requirement at regulation 59(3) of the AIFMD UK regulation applies.; or (f) a full-scope EEA AIFM that is exercising a right to market an AIF in the United Kingdom arising out of the EuSEF regulation or the EuVECA regulation. [deleted] unfunded credit protection (1) (in BIPRU and in accordance with Article 4(32) of the Banking Consolidation Directive (Definitions)) a technique of credit risk mitigation where the reduction of the credit risk on the exposure of an undertaking derives from the undertaking of a third party to pay an amount in the event of the default of the borrower or on the occurrence of other specified events. [Note: article 4(32) of the Banking Consolidation Directive (Definitions)]

FCA 201X/XX
(2) (in IFPRU) has the meaning in article 4(1)(59) of the EU CRR UK CRR. (3) (in MIPRU) a way of mitigating credit risk where the reduction of credit risk on the exposure of an undertaking (the borrower) derives from the enforceable obligation of a third party to pay an amount in the event of the default of the borrower or on the occurrence of other specified events. unrated position (for the purposes of BIPRU 9 (Securitisation), in accordance with Part 1 of Annex IX of the Banking Consolidation Directive (Securitisation definitions) and in relation to a securitisation position) describes a securitisation position which does not have an eligible credit assessment by an eligible ECAI. [Note: Part 1 of Annex IX of the Banking Consolidation Directive (Securitisation definitions)] VaR model permission an Article 129 implementing measure, a requirement or a waiver that requires a BIPRU firm or a CAD investment firm to use the VaR model approach on a solo basis or, if the context requires, a consolidated basis. Zone A country (a) any EEA State [deleted]; (b) all other countries which are full members of the OECD; and (c) those countries which have concluded special lending arrangements with the International Monetary Fund (IMF) associated with the Fund's general arrangements to borrow (GAB), save that any country falling with (a), (b) or (c) which reschedules its external sovereign debt is precluded from Zone A for a period of five years. Delete the following definitions. The text is not shown struck through. AIFM qualifier an EEA AIFM which is marketing, or has marketed, an AIF in the UK by:
(a) exercising its EEA right to market under Schedule 3 of the Act (EEA Passport Rights); and (b) is not exercising a right to manage a UK AIF under Schedule 3 of the Act.

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AIFMD host state requirements
Handbook rules transposing articles 12 and 14 of AIFMD and which fall under the responsibility of the Host State to supervise where an AIFM manages or markets an AIF through a branch in that EEA State, namely:
(a) FUND 3.8;
(b) SYSC 4.1.2CR;
(c) SYSC 10.1.22 R to SYSC 10.1.26R; and
(d) COBS 2.1.4R. applicable provisions the Host State rules with which:
(a) an incoming EEA firm is required to comply when carrying on a permitted activity through a branch or by providing services (as applicable) in the United Kingdom, as defined in paragraphs 13(4) and 14(4) of Part II of Schedule 3 to the Act (Exercise of passport rights by EEA firms); or (b) a UK firm is required to comply when conducting business through a branch (in accordance with paragraph 19(13) of Part III of Schedule 3 to the Act (Exercise of passport rights by UK firms)) or by providing services (as applicable) in another EEA State.
Article 129
implementing measure any:
(a) measure taken by the appropriate regulator under regulations 7-9 of the Capital Requirements Regulations 2006; or (b) corresponding measure taken by another competent authority to apply an Article 129 permission as referred to in the last paragraph of Article 129(2) of the Banking Consolidation Directive.
Article 129
permission a permission of the type referred to in Article 129(2) of the Banking Consolidation Directive (permission to apply the IRB approach, the AMA approach or the CCR internal model method on a consolidated basis) or
Article 37(2) of the Capital Adequacy Directive (permission to apply the
VaR model approach on a consolidated basis) excluding an Article 129 implementing measure.
Article 129
procedure the procedure described in Article 129(2) of the Banking Consolidation Directive (permission to apply the IRB approach, the AMA approach or the CCR internal model method on a consolidated basis) or that applies under Article 37(2) of the Capital Adequacy Directive (permission to apply the VaR model approach on a consolidated basis) for the purpose of applying for and granting or refusing an Article 129 permission or the procedure for varying of revoking an Article 129 permission in

FCA 201X/XX accordance with the Banking Consolidation Directive or the Capital Adequacy Directive. auction regulation Commission Regulation (EU) No 1031/2010 of 12 November 2010 on the timing, administration and other aspects of auctioning of greenhouse gas emission allowances pursuant to Directive 2003/87/EC of the European Parliament and of the Council establishing a scheme for greenhouse gas emission allowances trading within the Community). auction regulation bidding the regulated activity of bidding in emissions auctions where it is carried on by a firm that is exempt from MiFID under article 2(1)(j). bidding in emissions auctions the regulated activity, specified in article 24A of the Regulated Activities Order (Bidding in emissions auctions), which is in summary the reception, transmission or submission of a bid at an auction of an emissions auction product conducted on an auction platform. branch passport notification a notification made in accordance article 35(2) of MiFID and MiFID ITS 4A Annex VI. central competent authority (in MAR 10) in respect of a particular commodity derivative traded in significant volumes on trading venues in more than one EEA jurisdiction, the competent authority of the trading venue where the largest volume of trading in the commodity derivative takes place in the EEA. consent notice a notice given by the FCA or PRA as the case may be to a Host State regulator under:
(a) (a) paragraph 19(4) (Establishment) of Part III of Schedule 3 to the Act (Exercise of Passport Rights by UK firms); or (b) paragraph 20(3A) (Services) of Part III of Schedule 3 to the Act (Exercise of Passport Rights by UK firms). country of origin in relation to an electronic commerce activity, the EEA State in which the establishment from which the service in question is provided is situated. cross-border dispute (as defined in regulation 5 of the ADR Regulations) a dispute concerning contractual obligations arising from a sales contract or a service contract where, at the time the consumer orders the goods or services, the trader is established in the United Kingdom and the consumer is resident in another Member State. [Note: article 4(1) of the ADR Directive] cross border services (1) (in relation to a UK firm) services provided within an EEA State other than the United Kingdom under the freedom to provide services. (2) (in relation to an incoming EEA firm or an incoming Treaty firm) services provided within the United Kingdom under the freedom to provide services.

FCA 201X/XX cross-border dispute
(as defined in regulation 5 of the ADR Regulations) a dispute concerning contractual obligations arising from a sales contract or a service contract where, at the time the consumer orders the goods or services, the trader is established in the United Kingdom and the consumer is resident in another Member State. [Note: article 4(1) of the ADR Directive] Cross-Border Payments in Euro Regulations the Cross-Border Payments in Euro Regulations 2010 (SI 2010/89). cross-border UCITS merger (in COLL and in accordance with article 2(1)(q) of the UCITS Directive) a UCITS merger of two or more UCITS:
(a) at least two of which are established in different EEA States; or (b) established in the same EEA State into a newly constituted UCITS established in another EEA State; but at least one of which is established in the United Kingdom. EEA approved incoming information society service an incoming information society service that has its establishment in an EEA State other than the United Kingdom which has been approved in that state as meeting the standards set out in article 21 of the TD and
article 12 of the TD implementing Directive.
EEA authorisation (in accordance with paragraph 6 of Schedule 3 to the Act (EEA Passport Rights)):
(a) in relation to an IDD insurance intermediary or an IDD reinsurance intermediary, registration with its Home State regulator under article 3 of the Insurance Distribution Directive; (b) in relation to any other EEA firm, authorisation granted to an EEA firm by its Home State regulator for the purpose of the relevant Single Market Directive or the auction regulation. EEA authorised electronic money institution (in accordance with regulation 2(1) of the Electronic Money Regulations) a person authorised in an EEA State other than the United Kingdom to issue electronic money and provide payment services in accordance with the Electronic Money Directive. EEA authorised payment institution (a) (in accordance with regulation 2(1) of the Payment Services Regulations) a person authorised in an EEA State other than the United Kingdom to provide payment services in accordance with the Payment Services Directive or a person entitled to provide payment services of the type described in paragraph 1(g) of
Schedule 1 to the Payment Services Regulations 2009 under
regulation 152(5) of the Payment Services Regulations; and

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(b) (in accordance with paragraph 1 of Schedule 7 to the Payment Services Regulations) a firm which has its head office in Gibraltar, is authorised in Gibraltar to provide payment services, and has an entitlement corresponding to its passport right deriving from the Payment Services Directive, to establish a branch or provide services in the United Kingdom. EEA bank an incoming EEA firm which is a CRD credit institution. EEA branch of an authorised electronic money institution (in accordance with regulation 2(1) of the Electronic Money Regulations) a branch established by an authorised electronic money institution, in the exercise of its passport rights, to issue electronic money, provide payment services, distribute or redeem electronic money or carry out other activities in accordance with the Electronic Money Regulations in an EEA State other than the United Kingdom. EEA countercyclical buffer authority (1) the authority or body of a EEA State, other than the UK, designated for the purpose of article 136 of CRD with responsibility for setting the countercyclical buffer rate for that EEA State; or (2) the European Central Bank when it carries out the task of setting a countercyclical buffer rate for an EEA State conferred on it by
article 5(2) of Council Regulation (EU) No. 1024/2013, conferring
specific tasks on the European Central Bank concerning policies relating to the prudential supervision of credit institutions. EEA-deposit insurer a Solvency II firm that is a third-country insurance undertaking and that has made a deposit in an EEA State (other than the United Kingdom) under article 162(2)(e) of the Solvency II Directive in accordance with
article 167 of that Directive.
EEA ELTIF an ELTIF authorised by a competent authority other than the FCA under the ELTIF regulation. EEA financial conglomerate a financial conglomerate that is of a type that falls under Article 5(2) of the Financial Groups Directive (Scope of supplementary supervision of regulated entities referred to in Article 1 of that Directive) which in summary means a financial conglomerate:
(a) that is headed by an EEA regulated entity; or (b) in which the parent undertaking of an EEA regulated entity is a mixed financial holding company which has its head office in the EEA; or (c) in which an EEA regulated entity is linked with a member of the financial conglomerate in the overall financial sector by a consolidation Article 12(1) relationship.

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EEA insurer an insurer, other than a pure reinsurer, whose head office is in any EEA State except the United Kingdom and which has received authorisation under article 14 of the Solvency II Directive from its Home State Regulator. EEA market operator (in REC) a person who is a market operator whose home state is an EEA State other than the United Kingdom. EEA parent financial holding company (1) (in accordance with Article 4(17) of the Banking Consolidation Directive (Definitions) and Article 3 of the Capital Adequacy Directive (Definitions)) for the purpose of GENPRU (except GENPRU 3) and BIPRU (except in BIPRU 12) a parent financial holding company in a Member State which is not a subsidiary undertaking of an institution authorised in any EEA State or of another financial holding company or mixed financial holding company established in any EEA State. (2) (except in (1)) has the meaning as given to EU parent financial holding company in article 4(1)(31) of the EU CRR. EEA parent institution (1) (in accordance with Article 4(16) of the Banking Consolidation Directive and Article 2 of the Capital Adequacy Directive (Definitions)) for the purpose of BIPRU (except BIPRU 12) a parent institution in a Member State which is not a subsidiary undertaking of another institution authorised in any EEA State, or of a financial holding company or mixed financial holding company established in any EEA State. (2) (except in (1)) has the meaning as given to EU parent institution in
article 4(1)(29) of the EU CRR .
EEA parent mixed financial holding company (1) (in accordance with Article 4(17a) of the Banking Consolidation Directive (Definitions)) for the purpose of GENPRU (except GENPRU 3) and BIPRU (except in BIPRU 12) a parent mixed financial holding company in a Member State which is not a subsidiary undertaking of an institution authorised in any EEA State or of another financial holding company or mixed financial holding company established in any EEA State. (2) (except in (1)) has the meaning as given to EU parent mixed financial holding company in article 4(1)(33) of the EU CRR. EEA parent undertaking (a) an EEA parent institution; or (b) an EEA parent financial holding company; or (c) an EEA parent mixed financial holding company. [Note: article 2(1)(85) of RRD]

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EEA Passport
Rights
Regulations the Financial Services and Markets Act 2000 (EEA Passport Rights) Regulations 2001 (SI 2001/2511). EEA prudential sectoral legislation (in relation to a financial sector) requirements applicable to persons in that financial sector in accordance with EEA legislation about prudential supervision of regulated entities in that financial sector and so that:
(a) (in relation to the banking sector and the investment services sector) in particular this includes the requirements laid down in the EU CRR and (in relation to a CAD investment firm) the Banking Consolidation Directive and the Capital Adequacy Directive; and (b) (in relation to the insurance sector) in particular this includes requirements laid down in the Solvency II Directive and Solvency II Regulations. EEA pure reinsurer a pure reinsurer whose head office is in any EEA State except the United Kingdom and which has received (or is deemed to have received) authorisation under article 14 of the Solvency II Directive from its Home State Regulator. EEA registered account information service provider (in accordance with regulation 2(1) of the Payment Services Regulations) a person that is registered as an account information services provider in an EEA State other than the United Kingdom under the Payment Services Directive. EEA registered tied agent a tied agent of a UK MiFID investment firm that is not an appointed representative and is not an FCA registered tied agent because it is established in an EEA State other than the United Kingdom. EEA regulated entity a regulated entity that is an EEA firm or a UK firm. EEA right (in accordance with paragraph 7 of Schedule 3 to the Act (EEA Passport Rights)) the entitlement of a person to establish a branch or provide services in an EEA State other than that in which he has his relevant office:
(a) in accordance with the Treaty as applied in the European Economic Area; and (b) subject to the conditions of the relevant Single Market Directive or the auction regulation. In this definition, relevant office means:
(i) in relation to a person who has a registered office and whose entitlement is subject to the conditions of the Insurance Distribution Directive, his registered office; and

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(ii) in relation to any other person, his head office.
EEA territorial scope rule
COBS 1 Annex 1, Part 2 paragraph 1(1) (which provides that the territorial scope of COBS is modified to the extent necessary to be compatible with European law). EEA tied agent a tied agent who is an FCA registered tied agent or an EEA registered tied agent. ELTIF a European long-term investment fund (as defined in the ELTIF regulation) authorised under the ELTIF regulation. ELTIF regulation Regulation (EU) 2015/760 of the European Parliament and of the Council of 29 April 2015 on European long-term investment funds (http://eurlex.europa.eu/legalcontent/EN/TXT/PDF/?uri=OJ:JOL_2015_123_R_0010&from=EN). establishment conditions (in relation to the establishment of a branch in the United Kingdom) the conditions specified in paragraph 13 of Schedule 3 to the Act (EEA Passport Rights), which are that:
(a) if the firm falls within paragraph (a), (b), (c), (d) or (f) in the definition of “EEA firm”. (b) if the firm falls within paragraph (e) in the definition of “EEA firm”:
(i) the appropriate regulator has received notice (“a consent notice”) from the firm’s Home State regulator that the firm intends to establish a branch in the United Kingdom; (ii) (A) given in accordance with the IDD; (B) identifies the activities to which the consent relates; and (C) includes such other information as may be prescribed; and (iii) the EEA firm has been informed of the applicable provisions or one month has elapsed, beginning with the date on which the appropriate UK regulator received the consent notice. (c) the EEA firm has been informed of the applicable provisions or two months have elapsed beginning with the date when the FCA or PRA (as the case may be) received the consent notice. EU Cross-Border Regulation Regulation (EC) No 924/2009 of the European Parliament and of the Council on cross-border payments in the European Community.

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EuSEF a qualifying social entrepreneurship fund (as defined in the EuSEF regulation). EuSEF manager the manager of a qualifying social entrepreneurship fund (as defined in the EuSEF Regulation) that is registered in accordance with article 15 of the EuSEF Regulation. EuSEF regulation Regulation (EU) No 346/2013 of the European Parliament and the Council of 17 April 2013 on European social entrepreneurship funds as amended by Regulation (EU) No 2017/1991 of the European Parliament and the Council of 25 October 2017 amending Regulation (EU) No 345/2013 on European venture capital funds and Regulation (EU) No 346/2013 on European social entrepreneurship funds. EuVECA a qualifying venture capital fund (as defined in the EuVECA regulation). EuVECA manager the manager of a qualifying venture capital fund (as defined in the EuVECA Regulation) that is registered in accordance with article 14 of the EuVECA Regulation. EuVECA regulation Regulation (EU) No 345/2013 of the European Parliament and the Council of 17 April 2013 on European venture capital funds as amended by Regulation (EU) No 2017/1991 of the European Parliament and the Council of 25 October 2017 amending Regulation (EU) No 345/2013 on European venture capital funds and Regulation (EU) No 346/2013 on European social entrepreneurship funds. fund application rules (in COLL and SUP) the rules set out in COLL 12.3.5R (COLL fund rules under the management company passport: the fund application rules) that relate to the constitution and functioning of a UCITS scheme and that an EEA UCITS management company must comply with when acting as the operator of the UCITS scheme, whether from a branch in the United Kingdom or under the freedom to provide cross border services, as required by article 19(3) of the UCITS Directive. Home State authorisation (as defined in paragraph 3(1)(a) of Schedule 4 to the Act (Treaty Rights)) authorisation of a firm under the law of its Home State to carry on a regulated activity. incoming ECA provider a person, other than an exempt person, who:
(a) provides an electronic commerce activity, from an establishment in an EEA State other than the United Kingdom, with or for an ECA recipient present in the United Kingdom; and (b) is a national of an EEA State or a company or firm mentioned in
article 54 of the Treaty.
incoming EEA
AIFM an incoming EEA firm which is an AIFM and exercising its rights under AIFMD.

FCA 201X/XX incoming EEA
AIFM branch an incoming EEA firm which is an AIFM and exercising its right to establish a branch under AIFMD. incoming EEA firm (in accordance with section 193(1)(a) of the Act (Interpretation of this
Part)) an EEA firm which is exercising, or has exercised, its right to carry
on a regulated activity in the United Kingdom in accordance with
Schedule 3 to the Act (EEA Passport Rights).
incoming firm (in accordance with section 193(1) of the Act (Interpretation of this Part)) an incoming EEA firm or an incoming Treaty firm. incoming Treaty firm (in accordance with section 193(1)(b) of the Act (Interpretation of this
Part)) a Treaty firm which is exercising, or has exercised, its right to carry
on a regulated activity in the United Kingdom in accordance with
Schedule 4 to the Act (Treaty rights).
information centre a centre established by an EEA State to meet its obligations under article 23 of the Consolidated Motor Insurance Directive (Information Centres). investment services and activities passport notification a notification made in accordance with article 34(2) of MiFID and MiFID ITS 4 Annex I. non-EEA firm a firm that has its registered office (or, if it has no registered office, its head office) in a non-EEA state. non-EEA insurer an insurer whose head office is not in an EEA State. non-EEA state a country or state that is not an EEA State. notice of intention a notice of intention (as described in SUP 13.5) given by a UK firm to:
(a) establish a branch in an EEA State under paragraph 19(2) of Part III of Schedule 3 to the Act (Exercise of passport rights by UK firms); or (b) provide services in an EEA State under paragraph 20(1) of Part III of Schedule 3 to the Act (Exercise of passport rights by UK firms); or (c) establish a branch or provide services in an EEA state in the exercise of its EEA right under the auction regulation. outgoing ECA provider a firm which:
(a) provides an electronic commerce activity, from an establishment in the United Kingdom, with or for an ECA recipient present in an EEA State other than the United Kingdom; and

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(b) is a national of an EEA State or a firm or company mentioned in
article 54 of the Treaty.
passported activity an activity carried on by an EEA firm, or by a UK firm, under an EEA right. passport right (in accordance with regulation 2(1) of the Electronic Money Regulations) the entitlement of a person to establish a branch or provide services in an EEA State other than that in which they are authorised to provide electronic money issuance services:
(a) in accordance with the Treaty on the Functioning of the European Union as applied in the EEA; and (b) subject to the conditions of the Electronic Money Directive. relevant competent authorities (in relation to a financial conglomerate) those competent authorities which are, or which have been appointed as, relevant competent authorities in relation to that financial conglomerate under Article 2(17) of the Financial Groups Directive (Definitions). relevant EEA details the details listed in regulation 14 of the EEA Passport Rights Regulations and set out in SUP 13 Annex 1 (Requisite details or relevant details:
branches). resolution authority
(a) (in the UK) the Bank of England; or
(b) (in another EEA State) an authority designated as a resolution authority by that EEA State under article 3 of RRD. [Note: article 2(1)(18) of RRD] service conditions in accordance with paragraph 14 of Schedule 3 to the Act (EEA Passport Rights)) the conditions that:
(a) the firm has given its Home State regulator notice of its intent to provide services in the United Kingdom; (b) if the firm falls within paragraph (a), (d), (e) or (f) in the definition of “EEA firm”, the FCA or the PRA (as the case may be) has received notice from the firm’s Home State regulator containing such information as may be prescribed; (c) if the firm falls within paragraph (d), (e), (h) or (i) of that definition, its Home State regulator has informed it that the regulator’s notice has been sent to the FCA or the PRA (as the case may be); and (d) if the firm falls within paragraph (i) of that definition, one month has elapsed beginning with the date on which the firm's Home

FCA 201X/XX
State regulator informed the firm that it had sent the regulator's notice to the FCA or the PRA (as the case may be). significant branch a branch that would be considered significant in a Host State under article 51(1) of CRD. [Note: article 2(1)(340 of RRD] third-country SMCR banking firm a firm identified as a third-country SMCR banking firm in the decision tree in SYSC 23 Annex 1 (Definition of SMCR firm and different types of SMCR firms) and Part Four of that Annex. tied agent passport notification a notification made in accordance with article 35(2) of MiFID and MiFID ITS 4 Annex VII. top-up cover cover provided by the compensation scheme for claims against an incoming EEA firm which has elected to participate in accordance with
section 214(5) of the Act, regulation 3 of the Electing Participants
Regulations (Persons who may elect to participate) and COMP 14 (Participation by EEA firms). top-up permission a Part 4A permission given to an incoming EEA firm, an incoming Treaty firm or a UCITS qualifier. Treaty activity (as defined in section 417(1) of the Act (Definitions)) an activity carried on under a permission obtained in accordance with Schedule 4 to the Act (Treaty Rights). Treaty firm (as defined in paragraph 1 of Schedule 4 to the Act (Treaty Rights)) a person:
(a) whose head office is situated in an EEA State (its “Home State”) other than the United Kingdom; and (b) which is recognised under the law of that State as its national. Treaty right the entitlement of a Treaty firm to qualify for authorisation under
Schedule 4 to the Act (Treaty Rights).2001/7
Treaty the Treaty on the Functioning of the European Union.
UCITS Home
State the Home State of a UCITS scheme or EEA UCITS scheme.
UCITS qualifier a firm (other than an EEA UCITS management company) which:
(a) for the time being is an operator, trustee or depositary of a scheme which is a recognised scheme under section 264 of the Act; and (b) is an authorised person as a result of paragraph 1(1) of Schedule 5 to the Act (Persons Concerned in Collective Investment Schemes);

FCA 201X/XX a reference to a firm as a UCITS qualifier applies in relation to the carrying on by the firm of activities for which it has permission in that capacity. UK-deposit insurer a non-EEA insurer that has made a deposit in the United Kingdom under
article 162(2)(e) of the Solvency II Directive in accordance with article
167 of that Directive.
UK ELTIF an ELTIF authorised by the FCA under the ELTIF regulation. UK MiFID investment firm a MiFID investment firm whose Home State is the United Kingdom (this may include a natural person provided the conditions set out in Article 4(1)(1) of MiFID are satisfied). UK parent mixed financial holding company in a member state a parent mixed financial holding company in a Member State where the EEA State in question is the UK. UK regulated EEA financial conglomerate a financial conglomerate (other than a third-country financial conglomerate) that satisfies one of the following conditions:
(a) GENPRU 3.1.29R (Capital adequacy calculations for financial conglomerates) applies with respect to it; or (b) a firm that is a member of that financial conglomerate is subject to obligations imposed through its Part 4A permission to ensure that financial conglomerate meets levels of capital adequacy based or stated to be based on Annex I of the Financial Groups Directive.
Part 2: Comes into force on 9 December 2019
Insert the following new definition in the appropriate alphabetical position. The text is not underlined. head of overseas branch function FCA controlled function SMF19 in the table of FCA-designated senior management functions, described more fully in SUP 10C.5.24R. Amend the following definitions as shown. EEA core SMCR firm a core SMCR firm that is an incoming EEA firm or incoming Treaty firm a TP firm.

FCA 201X/XX non-SMF board director subject to competence requirements (in relation to an SMCR firm) a board director of the firm who meets the following conditions:
(a) …
(b) the firm is required to assess their fitness and propriety under the competent employee rule, SYSC 28 (Insurance distribution: specific knowledge, ability and good repute requirements) any directly applicable EU legislation onshored regulation or any other requirement of the regulatory system. Delete the following definition. The text is not shown struck through. head of third country branch function FCA controlled function SMF19 in the table of FCA-designated senior management functions, described more fully in SUP 10C.5.24R.

FCA 201X/XX
EXITING THE EUROPEAN UNION: HIGH LEVEL STANDARDS (AMENDMENTS) INSTRUMENT 201[X] Powers exercised A. The Financial Conduct Authority makes this instrument in the exercise of:
(1) regulation 3 of the Financial Regulators’ Powers (Technical Standards etc.) (Amendment etc.) (EU Exit) Regulations 2018; and (2) section 139A (Power of the FCA to give guidance) of the Financial Services and Markets Act 2000. Commencement B. Part 2 of Annex F comes into force on 1 April 2019.
C. The remainder of this instrument comes into force on [29 March 2019 at 11 p.m.].
Amendments to the Handbook
D. The modules of the FCA’s Handbook of rules and guidance listed in column (1) below are amended in accordance with the Annexes in this instrument listed in column (2) below. (1) (2) Principles for Businesses (PRIN) Annex A Senior Management Arrangements, Systems and Controls sourcebook (SYSC)
Annex B
Threshold Conditions (COND) Annex C
Training and Competence sourcebook (TC) Annex D General Provisions (GEN) Annex E Fees manual (FEES) Annex F Citation E. This instrument may be cited as the Exiting the European Union: High Level Standards (Amendments) Instrument 201[X]. By order of the Board [date]

FCA 201X/XX

FCA 201X/XX
Annex A
Principles for Businesses (PRIN)
In this Annex, underlining indicates new text and striking through indicates deleted text. 1 Introduction
1.1 Application and purpose
Application
1.1.1 G The Principles (see PRIN 2) apply in whole or in part to every firm. The
application of the Principles is modified for firms conducting MiFID business, incoming EEA firms, incoming Treaty firms, UCITS qualifiers AIFM qualifiers, and Annex II benchmark administrators. PRIN 3 (Rules about application) specifies to whom, to what and where the Principles apply. Purpose
1.1.2 G The Principles are a general statement of the fundamental obligations of
firms under the regulatory system. This includes provisions which implement the Single Market Directives. They derive their authority from the FCA’s rule-making powers as set out in the Act and reflect the statutory objectives. … Consequences of breaching the Principles …
1.1.9 G Some of the other rules and guidance in the Handbook deal with the bearing
of the Principles upon particular circumstances. However, since the Principles are also designed as a general statement of regulatory requirements applicable in new or unforeseen situations, and in situations in which there is no need for guidance, the FCA’s other rules and guidance or EU onshored regulations should not be viewed as exhausting the implications of the Principles themselves. … 3 Rules about application
3.1 Who?
3.1.1 R PRIN applies to every firm., except that:

FCA 201X/XX
(1) for an incoming EEA firm or an incoming Treaty firm, the Principles apply only in so far as responsibility for the matter in question is not reserved by an EU instrument to the firm’s Home State regulator; (2) for an incoming EEA firm which is a CRD credit institution without a top-up permission, Principle 4 does not apply; (3) 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, the Principles do not apply; (4) for a UCITS qualifier and AIFM qualifier, only Principles 1, 2, 3, 7 and 9 apply, and only with respect to the activities in PRIN 3.2.2R (Communication and approval of financial promotions); (5) PRIN does not apply to an incoming ECA provider acting as such; and (6) PRIN does not apply to a firm in relation to its carrying on of auction regulation bidding.
3.1.2 G COBS 1 Annex 1 contains guidance that is relevant to the reservation of
responsibility to a Home State regulator referred to in PRIN 3.1.1R(1). [deleted] …
3.1.4 G PRIN 3.1.1R(3) puts incoming EEA firms on an equal footing with
unauthorised overseas persons who utilise the overseas persons exclusions in article 72 of the Regulated Activities Order. [deleted]
3.1.5 G PRIN 3.1.1R(4) reflects section 266 of the Act (Disapplication of rules).
[deleted]
3.1.6 R A firm will not be subject to a Principle to the extent that it would be
contrary to the UK’s obligations under an requirements of an EU instrument measure passed or made before exit day, to the extent that those requirements continue to have effect after exit day under the EUWA. …
3.3 Where?
3.3.1 R Territorial application of the Principles
Principle Territorial application
Principles 1, 2 and 3 in a prudential context, apply with respect to activities wherever they are carried on; otherwise, apply with respect to activities carried on from an establishment maintained by the firm (or its

FCA 201X/XX appointed representative) in the United Kingdom unless another applicable rule or EU onshored regulation which is relevant to the activity has a wider territorial scope, in which case the Principle applies with that wider scope in relation to the activity described in that rule or EU onshored regulation. … Principles 6, 7, 8, 9 and 10 Principle 8, in a prudential context, applies with respect to activities wherever they are carried on; otherwise apply with respect to activities carried on from an establishment maintained by the firm (or its appointed representative) in the United Kingdom unless another applicable rule or EU onshored regulation which is relevant to the activity has a wider territorial scope, in which case the Principle applies with that wider scope in relation to the activity described in that rule or EU onshored regulation. … … 4 Principles: MiFID business
4.1 Principles: MiFID business
4.1.1 G PRIN 3.1.6R gives effect to the provisions of the EUWA concerning the
continuing application of the principle of the supremacy of EU law. It ensures that the Principles do not impose obligations upon firms which are inconsistent with an a relevant EU instrument measure. If a Principle does purport to impose such an obligation PRIN 3.1.6R disapplies that Principle but only to the extent necessary to ensure compliance with European law compatibility with the relevant EU measure. This disapplication has practical effect only for certain matters covered by MiFID, which are explained in this section. Where?
4.1.2 G Under PRIN 3.3.1R, the territorial application of a number of Principles to a
UK MiFID investment firm is extended to the extent that another applicable rule or EU onshored regulation which is relevant to an activity has a wider territorial scope. Under PRIN 3.1.1R, the territorial application of a number of Principles to an EEA MiFID investment firm is narrowed to the extent that responsibility for the matter in question is reserved to the firm’s Home State regulator. These modifications are relevant to Principles 1, 2, 3, 6, 7, 8, 9 and 10. We have added further guidance in PERG on the ability of a Host State to impose conduct of business requirements (see Q67).

FCA 201X/XX
…
What?
4.1.4 G …
(2) Under PRIN 3.1.6R, these disapplications may affect Principles 1, 2, 6 and 9. PRIN 3.1.6R applies only to the extent that the application of a Principle would be contrary to the UK’s obligations under a Single Market Directive relevant EU measure in respect of a particular transaction or matter. … …

FCA 201X/XX
Annex B
Senior Management Arrangements, Systems and Controls sourcebook (SYSC) In this Annex, underlining indicates new text and striking through indicates deleted text. 1 Application and purpose … 1 Annex 1 Detailed application of SYSC 1 …
Part 2 Application of the common platform requirements
Who?
…
2.6 R The common platform requirements do not apply to
an incoming ECA provider acting as such. [deleted] … What … 2.8A R … (6) SYSC 1 Annex 1 2.8R(1A) does not apply to a firm to the extent that articles 3 – 7 of the IDD Regulation are directly applicable apply to the firm (see SYSC 1 Annex 1 3.1AG). … …
Part 3 Tables summarising the application of the common
platform requirements to different types of firm … 3.1A G The IDD Regulation is directly applicable applies to a firm when carrying on insurance distribution in

FCA 201X/XX relation to insurance-based investment products. Articles 3 to 7 of the IDD Regulation are reproduced in SYSC 10.1A for information for these firms. …
Table A: Application of the common platform requirements in SYSC 4 to SYSC 10
…
Provision
SYSC 9
COLUMN A
Application to a common platform firm other than to a UCITS investment firm COLUMN A+ Application to a UCITS management company COLUMN A++ Application to a fullscope UK AIFM of an authorised AIF COLUMN B Application to all other firms apart from insurers, UK ISPVs, managing agents the Society, full-scope UK AIFMs of unauthorise d AIFs, MiFID optional exemption firms and third country firms … SYSC 9.1.2CEUUK EU UK Directly applicable Applicable to a firm carrying on insurance distribution in relation to insurance-based investment products EU UK Directly applicable Applicable to a firm carrying on insurance distribution in relation to insurancebased EU UK Directly applicable Applicable to a firm carrying on insurance distribution in relation to insurancebased EU UK Directly applicable Applicable to a firm carrying on insurance distribution in relation to insurancebased

FCA 201X/XX investment products investment products investment products … Provision SYSC 10 COLUMN A Application to a common platform firm other than to a UCITS investment firm COLUMN A+ Application to a UCITS management company COLUMN A++ Application to a fullscope UK AIFM of an authorised AIF COLUMN B Application to all other firms apart from insurers, UK ISPVs, managing agents the Society, full-scope UK AIFMs of unauthorise d AIFs, MiFID optional exemption firms and third country firms … SYSC 10.1A EU UK Directly applicable Applicable to a firm carrying on insurance distribution in relation to insurance-based investment products EU UK Directly applicable Applicable to a firm carrying on insurance distribution in relation to insurancebased investment products EU UK Directly applicable Applicable to a firm carrying on insurance distribution in relation to insurancebased investment products EU UK Directly applicable Applicable to a firm carrying on insurance distribution in relation to insurancebased investment products …

FCA 201X/XX
Table B: Application of the common platform requirements in SYSC 4 to 10 to
MiFID optional exemption firms and third country firms Provision COLUMN A MiFID optional exemption firms COLUMN B Third country firms … SYSC 9 … SYSC 9.1.2C EUUK EU UK Directly applicable Applicable to a firm carrying on insurance distribution in relation to insurance-based investment products EU UK Directly applicable Applicable to a firm carrying on insurance distribution in relation to insurance-based investment products … SYSC 10 … SYSC 10.1A EU UK Directly applicable Applicable to a firm carrying on insurance distribution in relation to insurance-based investment products EU UK Directly applicable Applicable to a firm carrying on insurance distribution in relation to insurance-based investment products …

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…
3 System and Controls
…
3.3 Additional requirements for insurance distribution
…
Effect of provisions marked “EU”
3.3.2 G The IDD Regulation is applies directly applicable to an insurer when
carrying on insurance distribution in relation to insurance-based investment products. Some of the articles of the IDD Regulation (see the provisions marked with the status letters “EU” “UK”) are reproduced in this section for those insurers for information only.
3.3.3 R (1) To the extent that the IDD Regulation does not directly apply,
provisions in this section marked with the status letters ‘EU’ “UK” apply to the insurer as if they were rules. (2) References in Column (1) to a word or phrase used in the IDD Regulation have, for the purpose of SYSC 3.3.3R(1) above, the meaning indicated in Column (2) of the table below:
(1) (2)
“article 27” SYSC 3.3.8R and SYSC 3.3.9R
“article 28” SYSC 3.3.5R and SYSC 3.3.13R “competent authority” FCA “customer” Client “Directive (EU) 2016/97” IDD …
3.3.4 G The effect of SYSC 3.3.3R is that:
(1) the provisions marked “EU” “UK” apply as rules to an insurer when carrying on insurance distribution activities other than insurance distribution in relation to insurance-based investment products; (2) where SYSC 3.3.3R applies, an insurer is required to read the provisions marked “EU” “UK” as though the application of those provisions (and articles 27 and 28 of the IDD) is not limited to the distribution of insurance-based investment products; and

FCA 201X/XX
(3) the scope of the application of the IDD Regulation is extended from insurance distribution to insurance distribution activities. Identifying conflicts …
3.3.6 EU
U
K
3(1) For the purposes of identifying, in accordance with Article 28 of Directive (EU) 2016/97 rules 3.3.5, 3.3.13, 10.1.3 and 10.1.8 of the Senior Management Arrangements, Systems and Controls sourcebook, in so far as those rules apply to the insurance-based investment products, the types of conflicts of interest that arise in the course of carrying out any insurance distribution activities related to insurance-based investment products and which entail a risk of damage to the interests of a customer, insurance intermediaries and insurance undertakings shall assess whether they, a relevant person or any person directly or indirectly linked to them by control, have an interest in the outcome of the insurance distribution activities, which meets the following criteria:
…
…
Conflicts policy
3.3.10 EU
U
K
4(1) For the purposes of Article 27 of Directive (EU) 2016/97 rules 3.3.8, 3.3.9, 10.1.3, 10.1.7 and 10.1.7A of the Senior Management Arrangements, Systems and Controls sourcebook, in so far as those rules apply to insurance-based investment products, insurance intermediaries and insurance undertakings shall be expected to establish, implement and maintain an effective conflicts of interest policy set out in writing and appropriate to their size and organisation and the nature, scale and complexity of their business. Where the insurance intermediary or insurance undertaking is a member of a group, the policy shall also take into account any circumstances, of which the insurance intermediary or insurance undertaking is or should be aware, which may give rise to a conflict of interest arising as a result of the structure and business activities of other members of the group. [Note: article 4(1) of the IDD Regulation] Contents of policy
3.3.11 EU
UK
…

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[Note: article 4(2) of the IDD Regulation]
3.3.12 EU
UK
…
[Note: article 5 of the IDD Regulation]
Disclosure of conflicts
…
3.3.14 EU
U
K
6(1) Insurance intermediaries and insurance undertakings shall avoid over-reliance on disclosure to ensure that disclosure to customers, pursuant to Article 28(2) of Directive (EU) 2016/97 rules 3.3.13 and 10.1.8 of the Senior Management Arrangements, Systems and Controls sourcebook, in so far as those rules apply to insurance-based investment products, is a measure of last resort that can be used only where the effective organisational and administrative arrangements established by the insurance intermediary or insurance undertaking to prevent or manage conflicts of interest in accordance with Article 27 of Directive (EU) 2016/97 rules 3.3.8, 3.3.9, 10.1.3, 10.1.7, 10.1.7A of the Senior Management Arrangements, Systems and Controls sourcebook, in so far as these rules apply to insurance-based investment products are not sufficient to ensure, with reasonable confidence, that risks of damage to the interests of the customer will be prevented. … [Note: article 6 of the IDD Regulation] Review of conflicts policy
3.3.15 EU
U
K
7(1) For the purposes of Article 27 of Directive (EU) 2016/97 3.3.8, 3.3.9, 10.1.3, 10.1.7 and 10.1.7A of the Senior Management Arrangements, Systems and Controls sourcebook, in so far as those rules apply to insurance-based investment products, insurance intermediaries and insurance undertakings shall assess and periodically review, on an at least annual basis, the conflicts of interest policy established in accordance with Article 4 and take all appropriate measures to address any deficiencies. [Note: article 7(1) of the IDD Regulation] Record keeping
3.3.16 EU
U
K
…

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[Note: article 7(2) of the IDD Regulation] …
3.3.18 G …
(2) For the purposes of SYSC 3.3.17R, a firm will need to consider whether the requirement in article 19 of the IDD Regulation (or in COBS 9A.4.3EUUK or 10A.7.2EUUK for any firm to whom the IDD Regulation is not directly applicable does not apply) means that a record needs to be retained for longer than five years.
3.3.19 EU
U
K
19(4) The records shall be retained in a medium that allows the storage of information in a way accessible for future reference by the competent authority FCA. The competent authority FCA shall be able to access them readily, to reconstitute each element in a clear and accurate manner and to identify easily any changes, corrections or other amendments, and the contents of the records prior to such modifications. [Note: article 19(4) of the IDD Regulation] … 9 Record-keeping
9.1 General rules on record-keeping
…
Specific requirements for the distribution of insurance-based investment products … 9.1.2B G … (2) For the purposes of SYSC 9.1.2AR, a firm will need to consider whether the requirement in article 19 of the IDD Regulation (or in COBS 9A.4.3EUUK or COBS 10A.7.2EUUK for any firm to whom the IDD Regulation is not directly applicable does not apply) means that a record needs to be retained for longer than five years. 9.1.2C EU U K 19(4) The records shall be retained in a medium that allows the storage of information in a way accessible for future reference by the competent authority Financial Conduct Authority. The competent authority Financial Conduct Authority shall be able to access them readily, to reconstitute each element in a clear and accurate

FCA 201X/XX manner and to identify easily any changes, corrections or other amendments, and the contents of the records prior to such modifications. [Note: article 19(4) of the IDD Regulation] 9.1.2D R (1) SYSC 9.1.2CEUUK applies as if it was a rule to firms doing insurance distribution activities to which the IDD Regulation does not apply, in relation to the records for an insurance-based investment product required in COBS 9A.4 and COBS 10A.7. (2) Firms to whom (1) applies must read references in SYSC 9.1.2CEU to “the competent authority” as meaning “the FCA”. [deleted] … 10 Conflicts of interest
10.1 Application
Application to insurance intermediaries
10.1.-4 G (1) Subject to SYSC 10.1.-3R, this section applies to a firm carrying on insurance distribution activities in accordance with the tables in Part 3 of SYSC 1 Annex 1. Certain rules are disapplied where the firm is subject to directly applicable the provisions in the IDD Regulation (see SYSC 10.1.-3R). … … 10.1A IDD Regulation – Conflicts of interest Application 10.1A.1 G The IDD Regulation is applies directly applicable to a firm when carrying on insurance distribution in relation to insurance-based investment products. The relevant articles relating to conflicts of interest are set out in this section for information only. Identifying conflicts 10.1A.2 EU UK 3(1) For the purposes of identifying, in accordance with Article 28 of Directive (EU) 2016/97 rules 3.3.5, 3.3.13, 10.1.3 and 10.1.8 of the Senior Management Arrangements, Systems and Controls sourcebook, in so far as those rules apply to the insurance-based investment products, the types of conflicts of interest that arise in the course of carrying out any insurance distribution activities related to insurance-based investment products and which entail a

FCA 201X/XX risk of damage to the interests of a customer, insurance intermediaries and insurance undertakings shall assess whether they, a relevant person or any person directly or indirectly linked to them by control, have an interest in the outcome of the insurance distribution activities, which meets the following criteria:
…
…
[Note: article 5 of the IDD Regulation]
Disclosure of conflicts
10.1A.6 EU
UK
6(1) Insurance intermediaries and insurance undertakings shall avoid over-reliance on disclosure to ensure that disclosure to customers, pursuant to Article 28(2) of Directive (EU) 2016/97 rules 3.3.13 and 10.1.8 of the Senior Management Arrangements, Systems [Note: article 3 of the IDD Regulation] Conflicts policy 10.1A.3 EU UK 4(1) For the purposes of Article 27 of Directive (EU) 2016/97 rules 3.3.8, 3.3.9, 10.1.3, 10.1.7 and 10.1.7A of the Senior Management Arrangements, Systems and Controls sourcebook, in so far as those rules apply to insurance-based investment products, insurance intermediaries and insurance undertakings shall be expected to establish, implement and maintain an effective conflicts of interest policy set out in writing and appropriate to their size and organisation and the nature, scale and complexity of their business. Where the insurance intermediary or insurance undertaking is a member of a group, the policy shall also take into account any circumstances, of which the insurance intermediary or insurance undertaking is or should be aware, which may give rise to a conflict of interest arising as a result of the structure and business activities of other members of the group. [Note: article 4(1) of the IDD Regulation] Contents of policy 10.1A.4 EU UK … [Note: article 4(2) of the IDD Regulation] 10.1A.5 EU UK …

FCA 201X/XX and Controls sourcebook, in so far as those rules apply to insurance-based investment products, is a measure of last resort that can be used only where the effective organisational and administrative arrangements established by the insurance intermediary or insurance undertaking to prevent or manage conflicts of interest in accordance with Article 27 of Directive (EU) 2016/97 rules 3.3.8, 3.3.9, 10.1.3, 10.1.7 and 10.1.7A of the Senior Management Arrangements, Systems and Controls sourcebook, in so far as those rules apply to insurance-based investment products are not sufficient to ensure, with reasonable confidence, that risks of damage to the interests of the customer will be prevented. … [Note: article 6 of the IDD Regulation] Review of conflicts policy 10.1A.7 EU UK 7(1) For the purposes of Article 27 of Directive (EU) 2016/97 rules 3.3.8, 3.3.9, 10.1.3, 10.1.7 and 10.1.7A of the Senior Management Arrangements, Systems and Controls sourcebook, in so far as those rules apply to insurance-based investment products, insurance intermediaries and insurance undertakings shall assess and periodically review, on an at least annual basis, the conflicts of interest policy established in accordance with
Article 4 and take all appropriate measures to address any
deficiencies.
[Note: article 7(1) of the IDD Regulation] Record keeping 10.1A.8 EU UK … [Note: article 7(2) of the IDD Regulation] … 10A Recording telephone conversations and electronic communications 10A.1 Application Application 10A.1.1 R Subject to the exemptions in SYSC 10A.1.4R, this chapter applies to a firm:
(1) that is a:
…

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(a) UK MiFID investment firm; or
(d) incoming EEA AIFM; or [deleted]
…
(g) EEA MiFID investment firm; or [deleted] … (2) … … (e) managing a UK UCITS to the extent that this comprises the function of investment management referred to in
Annex II of the UCITS Directive;
…
[Note: article 16(7) and 16(11) of MiFID] 10A.1.2 G Where this chapter applies to a third country investment firm, it applies in conjunction with GEN 2.2.22AR, to ensure that such firms are not treated in a more favourable way than an EEA a UK firm. 10A.1.3 R For a firm in SYSC 10A.1.1R(1) (other than a MiFID investment firm or a third country investment firm) MiFIR, and any EU Regulation adopted under MiFIR or MiFID which is an onshored regulation, apply to the extent relevant to the subject matter of this chapter as if it the firm were a MiFID investment firm providing investment services or performing investment activities in accordance with article 16(7) of MiFID. … 12 Group risk systems and controls requirements
12.1 Application
12.1.1 R Subject to SYSC 12.1.2R to SYSC 12.1.4R, this section applies to each of
the following which is a member of a group:
(1) a firm that falls into any one or more of the following categories:
(a) a regulated entity that is:
(i) an investment firm, except a designated investment firm unless (ii) applies; or (ii) a credit institution or designated investment firm that is a subsidiary undertaking of a UK parent

FCA 201X/XX institution in a Member State that is an IFPRU investment firm; (b) [deleted] (c) an insurer; (d) a BIPRU firm; (e) a parent financial holding company in a Member State the UK or a UK parent financial holding company that is a member of one of the following:
(i) a UK consolidation group; or
(ii) an FCA consolidation group; and
(f) a firm subject to the rules in IPRU(INV) Chapter 14.
(2) a UCITS firm, but only if its group contains a firm falling into (1); and (3) the Society.
12.1.2 R Except as set out in SYSC 12.1.4R, this section applies with respect to
different types of group as follows:
(1) SYSC 12.1.8R and SYSC 12.1.10R apply with respect to all groups, including UK-regulated EEA financial conglomerates, other financial conglomerates and groups dealt with in SYSC 12.1.13R to SYSC 12.1.15R; and (2) the additional requirements set out in SYSC 12.1.11R and SYSC 12.1.12R only apply with respect to UK-regulated EEA financial conglomerates; and [deleted] (3) the additional requirements set out in SYSC 12.1.13R to SYSC 12.1.1R only apply with respect to groups of the kind dealt with by whichever of those rules apply.
12.1.3 R This section does not apply to:
(1) an incoming EEA firm; or
(2) an incoming Treaty firm; or
(3) a UCITS qualifier; or
(4) an ICVC.; or
(5) an incoming ECA provider acting as such.

FCA 201X/XX
12.1.4 R (1) This rule applies in respect of the following rules:
(a) SYSC 12.1.8R(2);
(b) SYSC 12.1.10R(1), so far as it relates to SYSC 12.1.8R(2); (c) SYSC 12.1.10R(2); and (d) SYSC 12.1.11R to SYSC 12.1.15R. (2) The rules referred to in (1):
(a) only apply with respect to a financial conglomerate if it is a UK-regulated EEA financial conglomerate; [deleted] (b) (so far as they apply with respect to a group that is not a financial conglomerate) do not apply with respect to a group for which a competent authority in another EEA state is lead regulator; [deleted] (c) (so far as they apply with respect to a financial conglomerate) do not apply to a firm with respect to a financial conglomerate of which it is a member if the interest of the financial conglomerate in that firm is no more than a participation; (d) (so far as they apply with respect to other groups) do not apply to a firm with respect to a group of which it is a member if the only relationship of the kind set out in paragraph (3) of the definition of group between it and the other members of the group is nothing more than a participation; and (e) do not apply with respect to a third-country group. … Purpose …
12.1.7 G This section implements article 109(2) of the CRD and article 9 of the
Financial Groups Directive (Internal control mechanisms and risk management processes). [deleted] … CRR firms and non-CRR firms that are parent financial holding companies in a Member State the UK or UK parent financial holding companies

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12.1.13 R If this rule applies under SYSC 12.1.14R to a firm, the firm must:
(1) comply with SYSC 12.1.8R(2) in relation to any UK consolidation group or, if applicable, non-EEA non-UK subgroup of which it is a member, as well as in relation to its group; and (2) ensure that the risk management processes and internal control mechanisms at the level of any consolidation group or, if applicable, non-EEA UK sub-group of which it is a member comply with the obligations set out in the following provisions on a consolidated (or sub-consolidated) basis:
(a) SYSC 4.1.1R and SYSC 4.1.2R;
(b) SYSC 4.1.7R;
(bA) SYSC 4.3A;
(c) SYSC 5.1.7R;
(d) SYSC 7;
(dA) the Remuneration Code; or the dual-regulated firms Remuneration Code, whichever is applicable; (e) BIPRU 12.3.4R, BIPRU 12.3.5R, BIPRU 12.3.7AR, BIPRU 12.3.8R, BIPRU 12.3.22AR, BIPRU 12.3.22BR, BIPRU 12.3.27R, BIPRU 12.4.-2R, BIPRU 12.4.-1R, BIPRU 12.4.5AR, BIPRU 12.4.10R, BIPRU 12.4.11R and BIPRU 12.4.11AR; (f) [deleted]; (g) [deleted]; (h) [deleted]; [Note: article 109(2) of CRD] (3) ensure that compliance with the obligations in (2) enables the consolidation group or, if applicable, the non-EEA non-UK subgroup 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: article 109(2) of CRD]
12.1.14 R SYSC 12.1.13R applies to a firm that is:
(1) [deleted]

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(2) a CRR firm; or
(3) a non-CRR firm that is a parent financial holding company in a Member State the UK or and is a member of a UK consolidation group a UK parent financial holding company. … 19F Remuneration and performance management … 19F.2 IDD remuneration incentives Application … 19F.2.1 A R This section does not apply to an authorised professional firm with respect to its non-mainstream regulated activities if:
(1) the firm’s designated professional body has made rules which implement implemented article 17(3) of the IDD; … … 28 Insurance distribution: specific knowledge, ability and good repute requirements …
28.2 Knowledge and ability requirements
Knowledge and ability requirements
…
28.2.3 R A firm must, including in relation to the relevant employee, demonstrate
compliance with the following professional knowledge and competence requirements:
…
(2) for insurance-based investment products insurance-based investment products as defined at article 2(1)(17) of the IDD (which in summary says that it is an insurance product which offers a maturity or surrender value, and where the maturity or surrender value is wholly or partially exposed, directly or

FCA 201X/XX indirectly, to market fluctuations. This excludes products such as non-investment insurance and certain life insurance):
…
(3) for long-term insurance contracts:
…
(b) minimum necessary knowledge of organisation and benefits guaranteed by the pension system of the relevant Member State state; … …

FCA 201X/XX
Annex C
Threshold Conditions (COND)
In this Annex, underlining indicates new text and striking through indicates deleted text. 1 Introduction 1.1A Application … To what extent does COND apply to incoming EEA firms and incoming Treaty firms? 1.1A.4 G COND applies to incoming EEA firms and incoming Treaty firms as set out below:
(1) for an incoming EEA firm or an incoming Treaty firm which does not carry on any PRA-regulated activities, FCA threshold conditions 2C to 2F apply; and (2) for an incoming EEA firm or an incoming Treaty firm which carries on a PRA-regulated activity, FCA threshold conditions 3B to 3E apply. FCA threshold conditions apply to incoming EEA firms and incoming Treaty firms only in as far as relevant to the discharge by the FCA of its relevant functions in relation to an application for, or the exercise of its own-initiative powers in relation to, a top-up permission or the functions relating to the FCA’s consent or consultation rights relating to the exercise by the PRA of its powers in relation to an application for, or use of its own-initiative powers relating to, a top-up permission. [deleted]. … Where does COND apply? 1.1A.7 G COND applies in relation to all of the regulated activities wherever they are carried on, except as stated in COND 1.1A.4G.
1.2 Purpose
…
Applications for a Part 4A permission or variation of Part 4A permission
1.2.2 R …
(2) If, however, the applicant for permission is an incoming firm seeking top-up permission, or variation of top-up permission, under

FCA 201X/XX
Part 4A of the Act (Permission to carry on regulated activities),
then under paragraphs 6A and 7A of Schedule 6 to the Act (Threshold conditions), the FCA will have regard only to satisfaction of the FCA threshold conditions specified as applicable in COND 1.1A.4G, as relevant to the regulated activities for which the applicant has, or will have, Part 4A permission. [deleted] Exercise of the FCA’s own initiative powers
1.2.3 R …
(3) The FCA can also exercise its own-initiative powers under section 55J or section 55L of the Act in relation to the top-up permission of an incoming firm. But this is only on the grounds that the incoming firm is failing, or likely to fail, to satisfy the FCA threshold conditions specified as applying to incoming firms under COND 1.1A.4G. [deleted] … 2 The threshold conditions …
2.3 Effective supervision
Paragraph 2C of Schedule 6 to the Act
2.3.1A UK (1) A must be capable of being effectively supervised by the FCA having regard to all the circumstances including- … (f) if A has close links with another person (“CL”)- (i) the nature of the relationship between A and CL; (ii) whether those links are or that relationship is likely to prevent the FCA’s effective supervision of A; and (iii) if CL is subject to the laws, regulations or administrative provisions of a territory which is not [an EEA State the UK ](“the foreign provisions”), whether those foreign provisions, or any deficiency in their enforcement, would prevent the FCA’s effective supervision of A. … … Paragraph 3B of Schedule 6 to the Act

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2.3.1C UK (1) B must be capable of being effectively supervised by the FCA having regard to all the circumstances including- … (f) if B has close links with another person (“CL”)- (i) the nature of the relationship between B and CL; (ii) whether those links are or that relationship is likely to prevent the FCA’s effective supervision of B; and (iii) if CL is subject to the laws, regulations or administrative provisions of a territory which is not [an EEA State the UK ](“the foreign provisions”), whether those foreign provisions, or any deficiency in their enforcement, would prevent the FCA’s effective supervision of B. … …
2.3.7 G (1) For the purposes of the threshold conditions set out in paragraphs
2C and 3B of Schedule 6 to the Act, and except in relation to an incorporated friendly society, an undertaking is a parent undertaking of another undertaking (a subsidiary undertaking) if any of the following apply to it:
…
(g) it is an individual and would be a parent undertaking of the subsidiary undertaking.; or (h) it is incorporated in or formed under the law of another EEA State and is a parent undertaking within the meaning of any rule of law in that State for purposes connected with implementation of the Seventh Company Law Directive. [deleted] …

FCA 201X/XX
Annex D
Training and Competence sourcebook (TC)
In this Annex, underlining indicates new text and striking through indicates deleted text. 1 Application and Purpose
1.1 Who, what and where?
Who and what?
…
1.1.1B G ESMA has issued guidelines specifying criteria for the assessment of knowledge and competence (EMSA 2015/1886 dated 3 January 2017). The ESMA guidelines can be found at https://www.esma.europa.eu/document/guidelines-assessmentknowledge-and-competence … 2 Competence
2.1 Assessing and maintaining competence
Assessment of competence and supervision
2.1.1 R …
(2) A firm may assess an employee who is subject to, but has not satisfied, an appropriate qualification requirement as competent to the extent that:
(a) that employee works in a branch in an EEA State other than the United Kingdom; (b) the employee is engaging in MiFID business; and (c) there is no appropriate qualification or equivalent in that EEA State. [deleted] … 4 Specified modified requirements
4.1 Specified requirements for MiFID investment firms and for third country
investment firms
…

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4.1.3 R References in TC 4.1.4R to a relevant individual’s knowledge and
competence are to the knowledge and competence necessary to ensure that the firm, on behalf of which the relevant individual acts, is able to meet its obligations under:
(1) those rules which implement implemented articles 24 and 25 of MiFID (including those rules which implement implemented related provisions under the MiFID Delegated Directive); and (2) related provisions of the MiFID Org Regulation.
4.1.4 R Unless the context requires otherwise the rules in column 1 of the table
are amended as set out in column 2:
Column 1 Column 2
Relevant rule
Amendments
TC
2.1.1R(1)
Insert the following at the end of TC 2.1.1R(1):
“In addition, a firm must not assess a relevant individual as competent unless the firm has satisfied itself that the relevant individual possesses the knowledge and competence to enable the firm to meet its obligations under SYSC 5.1.5ABR. This means that the relevant individual has also:
(a) obtained appropriate experience which means that the relevant individual has successfully demonstrated the ability to carry on the activities through previous work experience. This work must have been performed, on a full-time equivalent basis, for a minimum period of 6 months; and (b) attained an appropriate qualification which means a qualification or other test or training course that meets the criteria set out by the ESMA guidelines referred to in TC 1.1.1BG. The level of knowledge and competence needed to fulfil the firm’s obligations reflects the scope and degree of the activities, as described in TC 4.1.2R above, carried out by the relevant individual.” … … … App 1.1 Activities and Products/Sectors to which TC applies subject to TC Appendices 2 and 3

FCA 201X/XX
1.1.1 R Activity Products/Sectors Is there an appropriate
qualification requirement?
…
…
MiFID business bidding [deleted]
13C
[del eted
]
Emissions auction products that are financial instruments [deleted] No [deleted] … App 2.1 TCs Territorial Scope subject to the limitation in TC Appendix 3
2.1.1 R UK domestic
firm
Incoming EEA firm [deleted]
Overseas firm
(other than an incoming EEA firm)
MiFID business and equivalent third country business TC applies in respect of employees who carry on activities from an establishment maintained by the firm (or its appointed representative) in the United Kingdom and if an activity is carried on from an establishment maintained by the firm (or its appointed representative or, where applicable, its tied agent) in, and within the territory of, TC does not apply …

FCA 201X/XX another EEA
State, TC applies although matters which would otherwise be covered by SYSC 5.1.5ABR are matters reserved for the Host State regulator Insurance distribution activities TC applies in respect of employees who carry on activities from an establishment maintained by the firm (or its appointed representative) in the United Kingdom and TC also applies in respect of employees who engage in or oversee activities from a branch established in another EEA state TC does not apply … Mortgage activities and reversion activities numbers 20, 20A, 21, 21A, 21B, 22 and 23 in TC App 1.1.1R; and MCD credit agreement activities numbers 23A to TC applies if the customer is resident in the United Kingdom at the time the activity is carried on and TC also applies if the customer is resident in another EEA Same as for UK domestic firm except that:
(1) if the firm carries on the activity from an establishment maintained by the firm or its appointed representative in the United Kingdom and …

FCA 201X/XX
23E in TC App
1.1.1R
State (at the time that the activity is carried on) but only if the activity is carried on from an establishment maintained by the firm or its appointed representative in the United Kingdom the customer is resident in another EEA State when the activity is carried on, TC does not apply; and (2) if the firm carries on the activity from an establishment maintained by the firm in another EEA State (and the customer is resident in the United Kingdom when the activity is carried on), the following provisions of TC apply: TC 2.1.5AR; TC 2.1.5BR(2), (3), (5) and (6); TC 2.1.5CR; TC 2.1.5DG; TC 2.1.5ER; and TC 2.1.5FG. [Note: article 9(3) of the MCD] Any other activity in
Appendix 1
… TC applies in respect of its employees who carry on activities from an establishment maintained by the firm (or its appointed representative) in the United Kingdom …

FCA 201X/XX
3.1 Circumstances in which TC does not apply
3.1.1 Type of
firm/activity
Application
Incoming
EEA firm
This sourcebook does not apply where responsibility for any matter it covers is reserved by an EU instrument to the firm’s Home State regulator Incoming Treaty firm This sourcebook does not apply where responsibility for any matter it covers is reserved by an EU instrument to the firm’s Home State regulator UCITS qualifier This sourcebook only applies where it is relevant to the manner in which a firm communicates or approves a financial promotion … Incoming ECA provider TC does not apply to an incoming ECA provider acting as such. … TP 1 Designated Investment Business: Assessments of competence before commencement TC TP 1.1 … 1.1A G Notwithstanding TC TP 1 1.1R:
(1) a firm is subject to SYSC 5.1.5ABR in respect of such an employee and should have regard to the guidelines ESMA has issued specifying the criteria for the assessment of knowledge and competence (ESMA 2015/1886 dated 3 January 2017). The ESMA guidelines can be found at: https://www.esma.europa.eu/document/guidelinesassessment-knowledge-and-competence; and … …

FCA 201X/XX
Annex E
Amendments to the General Provisions sourcebook (GEN) In this Annex, underlining indicates new text and striking through indicates deleted text. 1 FCA approval and emergencies
1.1 Application
…
1.1.1 R …
(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. [deleted] …
1.2 Referring to approval by the FCA
…
1.2.2A R …
(1A) Paragraph 1 does not apply to a firm to the extent that it is incompatible with the United Kingdom’s obligations under article 44(8) of the MiFID Org Regulation. … …
1.2.4 G A firm that carries on MiFID, equivalent third country or optional
exemption business should have regard to the requirement in article 44(8) of the MiFID Org Regulation which is reproduced at COBS 4.5A.16EU COBS 4.5A.16UK.
1.3 Emergency
…
1.3.5 GEN 1.3.2R operates on the FCA’s rules. It does not affect the FCA’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 FCA 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

FCA 201X/XX cancellation of permission and imposition of requirements on the FCA's own initiative and intervention against incoming firms)). 2 Interpreting the Handbook …
2.2 Interpreting the Handbook
…
European Economic Area (EEA)
2.2.21 G 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. [deleted] Treaty of Lisbon
2.2.22 G 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. … 4 Statutory status disclosure
4.1 Application
Who? What?
4.1.1 R 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; [deleted] (2) for an incoming EEA firm which has permission only for crossborder services and which does not carry on regulated activities in the United Kingdom, this chapter does not apply; [deleted] (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; [deleted]

FCA 201X/XX
(4) for a UCITS qualifier, this chapter does not apply; [deleted] (5) only GEN 4.1 (Application) and GEN 4.5 (Statements about authorisation and regulation by the appropriate regulator) apply 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; and
(6) only GEN 4.1 (Application) and GEN 4.5 (Statements about authorisation and regulation by the appropriate regulator) apply in relation to administering a benchmark. …
4.1.4 R 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. …
4.3 Letter disclosure
…
4.3.1B G An example for GEN 4.3.1AG would be where a letter covers business for which the FCA is the competent authority under the UK provisions which implemented the IDD and under the UK provisions which implemented MiFID. … Exception: insurers
4.3.4 R GEN 4.3.1R (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 United Kingdom and the client is not in the United Kingdom when the contract of insurance is entered into; or

FCA 201X/XX
(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 United Kingdom and is not present in the United Kingdom when the contract of insurance is entered into. … Exception: credit firms
4.3.7 R GEN 4.3.1R (Disclosure in letters to retail clients) does not apply to a credit
firm (other than a firm with a limited permission) with respect to the activity of entering into a regulated credit agreement as lender to which the Consumer Credit Directive applies, to the extent it would be contrary to the United Kingdom’s obligations under an EU instrument would have applied if the activity had been carried on immediately before exit day.
4.3.8 G A credit firm which carries on the activity of entering into a regulated
credit agreement as lender, in respect of an agreement to which articles 5 and 6 of the Consumer Credit Directive apply GEN 4.3.1R (Disclosure in letters to retail clients) does not apply as a result of GEN 4.3.7R is under an obligation to disclose pre-contract information in the form and to the extent required by the Consumer Credit (Disclosure of Information) Regulations 2010 (SI 2010/1013). Firms which carry on credit broking may take on the same obligation. A credit firm must also ensure specified information is included in credit agreements to which the Consumer Credit Directive applies GEN 4.3.1R (Disclosure in letters to retail clients) does not apply as a result of GEN 4.3.7R in the form and to the extent required by the Consumer Credit (Agreements) Regulations 2010 (SI 2010/1014).
4.3.9 G The effect of GEN 4.3.7R is that a credit firm in relation to a regulated
credit agreement which would have been covered by the Consumer Credit Directive if the activity had been carried on immediately before exit day does not need to comply with GEN 4.3.1R in relation to those letters (or electronic equivalents) that accompany the information required under the Regulations referred to in GEN 4.3.8G.
4.3.10 G GEN 4.3.7R and the guidance related to it are not relevant to Regulated
regulated activities covered by a limited permission (see the “relevant credit activities” set out in paragraph 2G of Schedule 6 to the Act) do not fall within the scope of articles 5 and 6 of the Consumer Credit Directive, therefore GEN 4.3.7R and the guidance related to it are not relevant to those activities. …
4.5 Statements about authorisation and regulation by the appropriate regulator

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…
4.5.5 G SUP 13A Annex 1 provides guidance on the application of the Handbook
to an incoming EEA firm. [deleted]
4.5.6 G (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. … 4 Annex 1R Statutory status disclosure This rule applies to firms that are not PRA-authorised persons:
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 Conduct Authority” (Note 1) (2) Incoming firm without a top-up permissio n [deleted] (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. Details about the extent of our regulation by the Financial Conduct Authority are available from us on request” (Notes 1, 2, 2a and 3) (3) Incoming firm with a top-up permissio n [deleted] “Authorised by [name of Home State regulator] and authorised and subject to limited regulation by the Financial Conduct Authority. Details about the extent of our authorisation and regulation by the Financial Conduct Authority are available from us on request” (Notes 1, 2 and 3)

FCA 201X/XX
(4) … …
…
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. [deleted] 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, in which case it must make disclosure (b). [deleted] … 4 Annex 1AR Statutory status disclosure (PRA-authorised persons) This rule applies to firms that are PRA-authorised persons:
Type of firm
Required disclosure (Note 5)
(1) … …
(2) overseas firm
(which is not an incoming firm)
…
(3) Incoming firm without a top-up permissio n [deleted] (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 and 3) (4) Incoming firm with a top-up permissio n [deleted] “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 and 3)

FCA 201X/XX
… … …
…
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). [deleted] … 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. … … Sch 4 Powers exercised … 4.2G Powers to make rules The following powers and related provisions in or under the Act have been exercised by the FCA to make the rules in GEN:
…
Paragraphs 19 (Establishment), 20 (Services) and 20C (Notice of intention to market an AIF) of Schedule 3 (EEA Passport Rights) … … 4.7G Powers to direct, require or specify The following powers and related provisions in the Act have been exercised by the FCA in GEN to direct, require or specify:
…
Section 293A (Information: compliance with EU requirements)
…

FCA 201X/XX
Paragraph 5(4) (Notice to UK Regulator) of Schedule 4 (Treaty Rights) … After GEN TP 4 (Transitional Provision on early compliance with the Insurance Distribution Directive applying across the Handbook) insert a new TP 5. The text is not underlined. TP 5 Transitional provisions applying across the FCA Handbook and relating to the UK’s exit from the EU
Table: 1 Transitional provisions applying across the Handbook
(1) The purpose of these transitional provisions is to assist a smooth transition on exit day. They comprise various technical provisions that will apply across the whole FCA 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 FCA Handbook relating to the matter. (4) Definitions for these transitional provisions, additional to those in the Glossary, are provided at row [13] of Table 2.
Table 2: Transitional provisions applying across the FCA Handbook
(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
1 Every provision in the FCA Handbook, unless the context otherwise requires and subject to any more specific transitional provision relating to the matter R Acts under preexit day provisions Anything done, or having effect as done, under or for the purposes of any pre-exit day provision has effect From exit day exit day

FCA 201X/XX as if done under or for the purposes of any substantially similar provision in the FCA Handbook. 2 Row 1 of this table G For example, a firm may continue to treat a client as an elective eligible counterparty pursuant to COBS 3.6.4R where prior to exit day it had categorised that client as such in deference to the status of that undertaking under the law or measures of the EEA State of that client’s establishment in accordance with COBS 3.6.7R. From exit day exit day 3 Every provision in the FCA Handbook, unless the context otherwise requires and subject to any more specific transitional provision relating to the matter R Series of events If the application of any provision in the FCA Handbook is dependent on the occurrence of a series of events, some of which occur before, and some of which occur after, exit day, the provision applies with respect to the events that occur after exit day. From exit day exit day 4 Every provision in the FCA Handbook, unless the context otherwise requires and subject to any more specific R Deemed references to preexit day provisions From exit day exit day

FCA 201X/XX transitional provision relating to the matter Any reference (express or implied) in a provision in the FCA Handbook to a provision of or made under the Act or of retained EU law 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 exit day, a reference to any substantially similar pre-exit day provision. 5 Row 4 of this table G For example, BIPRU 2.1.11R requires a firm to notify the FCA immediately of any breach, or expected breach, of the main BIPRU firm Pillar 1 rules (GENPRU 2.1.40R (Variable capital requirement for BIPRU firms), GENPRU 2.1.41R (Base capital resources requirement for BIPRU firms) and GENPRU 2.1.48R (Table: Base capital resources requirement for a BIPRU firm). This includes breaches of the main BIPRU firm Pillar 1 rules as they applied before exit day. From exit day exit day

FCA 201X/XX
6 Every provision in the FCA Handbook, unless the context otherwise requires and subject to any more specific transitional provision relating to the matter R Time starting before exit day If, at exit day, time has begun to run for any purpose under any pre-exit day 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 Handbook, 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-exit day provision if and to the extent that it complies with the substantially similar provision as extended by this transitional provision. From exit day exit day 7 Every rule in the FCA Handbook requiring a record to be made or retained, unless the context otherwise requires and subject to any more specific transitional provision relating to the matter R Record keeping A firm or other person will not contravene a rule in the FCA Handbook requiring a record to be made or retained to the From exit day exit day

FCA 201X/XX extent that the firm or other person:
(1) made a record of the matter before exit day in accordance with the rule or with a substantially similar pre-exit day 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. 8 Every rule in the FCA Handbook requiring a record to be made or retained, unless the context otherwise requires and subject to any more specific transitional provision relating to the matter G This transitional provision makes specific provision, in relation to record keeping, for the matters covered by row 1 of this table. It is included for clarity and overrides those general transitional provisions. From exit day exit day 9 Every rule in the FCA Handbook requiring a record to be made or retained, unless the context otherwise requires and subject to any more specific transitional provision relating to the matter R A firm or other person must retain a record in accordance with a rule in the FCA Handbook requiring a record of that sort to be retained, if the firm or other person was required to make and retain that record before exit day under a substantially similar pre-exit day provision From exit day exit day

FCA 201X/XX applicable to the firm or other person.
10 Row 7 of this table G This transitional provision makes specific provision, in relation to records, for the matters covered by rows 4 and 6 of this
table. It is included
for clarity and overrides those general transitional provisions. 11 Every notification rule in the FCA Handbook, unless the context otherwise requires and subject to any more specific transitional provision relating to the matter R Notification A firm (or its auditor, appointed actuary or appropriate actuary) or other person will not contravene a notification rule in the FCA Handbook to the extent that notice of the relevant matter was given to the FCA before exit day in accordance with:
(1) the notification rule; or
(2) a substantially similar pre-exit day provision applicable to the firm or other person. From exit day exit day 12 Row 11 of this table G This transitional provision makes specific provision, in relation to notifications, for the matters covered by rows 1 and 3 of From exit day exit day

FCA 201X/XX this table. It is included for clarity and overrides those general transitional provisions. 13 As rows 1 to 12 of this table R Definitions In these transitional provisions:
(1) “pre-exit day provision” means a provision [in force on the day preceding exit day]; From exit day exit day (2)”substantially similar” means substantially similar in purpose and effect; and (3) a reference to a “provision” in the FCA Handbook means every type of provision, including rules, guidance, provisions in codes, and so on. 14 Rows 15 and 16 of this table G Application for provisions which are not rules The purpose of row 15 of this table is to ensure that the transitional provisions in rows 1 to 13 apply throughout the FCA Handbook. The purpose of row 16 is to ensure that the transitional provisions in rows 1 to 13 apply throughout Technical From exit day exit day

FCA 201X/XX
Standards made by the Board of the
FCA.
15 Directions, requirements, guidance, evidential provisions and other provisions in the FCA Handbook (that is, provisions with the status letter “D” or “G” or “E” in the margin or heading) unless the context otherwise requires and subject to any more specific transitional provision relating to the matter G The provisions in rows 1 to 13 apply to every person to whom the provisions referred to in column (2) apply as if the rules in those rows were
part of those
provisions.
From exit day exit day
16 Technical Standards
(that is, provisions with the status letter “TS” in the margin or heading) made by the Board of the FCA under The Financial Regulators’ Powers (Technical Standards etc.) (Amendment etc.) (EU Exit) Regulations 2018 unless the context otherwise requires and subject to any more specific transitional provision relating to the matter TS The provisions in rows 1 to 13 of this
table apply to every
person to whom the provisions referred to in column (2) apply as if references to the Handbook were to Technical Standards made by the Board of the FCA. References in this table and in headings to the FCA Handbook should be read as referring to Technical Standards made by the Board of the FCA, where the context requires. From exit day exit day

FCA 201X/XX

FCA 201X/XX
Annex F
Amendments to the Fees manual (FEES)
In this Annex, underlining indicates new text and striking through indicates deleted text, unless otherwise stated. [Editor’s note: the text in this Part takes account of the changes proposed in CP18/10 ‘FCA regulated fees and levies: Rates proposals 2018/19’ (April 2018) as if they were made.]
Part 1: comes into force on exit day
1 Fees Manual
1.1 Application and Purpose
…
1.1.2 …
(2) FEES 1, 2 and 4 apply to:
(a) every firm (except an AIFM qualifier, ICVC or UCITS qualifier); … (da) every AIFM UK AIFM of a UK ELTIF an LTIF; … (m) every AIFM applying to become a small registered UK AIFM and every small registered UK AIFM; (n) every AIFM notifying the FCA under regulation 57, 58 and 59 of the AIFMD UK regulation and every AIFM which has made such a notification; (p) a data reporting services provider (FEES 4 does not apply to an incoming data reporting services provider). …

FCA 201X/XX
(5) FEES 1, 2, 7 and 7A (in relation to the SFGB money advice levy and SFGB debt advice levy only) apply to:
(a) every person having a Part 4A permission; (b) an incoming EEA firm; [deleted] (c) an incoming Treaty firm; [deleted] … FEES 1, 2, 7 and 7A do not apply to an incoming EEA firm or an incoming Treaty firm that has not established a branch in the United Kingdom. … … 3 Application, Notification and Vetting Fees
3.1 Introduction
…
3.1.2 G This chapter does not apply to:
(1) an EEA firm that wishes to exercise an EEA right unless it is:
(a) an incoming data reporting services provider connecting to the market data processor system; or (b) an EEA firm connecting to the market data processor system; or (2) a EEA authorised payment institution; or (3) an EEA authorised electronic money institution. [deleted] …

FCA 201X/XX
3.1.5 G (1) The rates set for authorisation fees represent an appropriate proportion of
the costs of the FCA in processing the application or exercise of Treaty rights. [deleted] (2) [deleted] (3) [deleted]
3.1.6 G Applications for Part 4A permission (and exercises of Treaty rights) other than
in respect of credit-related regulated activities are categorised by the FCA for the purpose of fee raising as straightforward, moderately complex and complex as identified in FEES 3 Annex 1. This differentiation is based on the permitted activities sought and does not reflect the FCA's risk assessment of the applicant (or Treaty firm). …
3.1.7 G A potential applicant for Part 4A permission (or Treaty firm) has the
opportunity to discuss its proposed application (or exercise of Treaty rights) with the FCA before submitting it formally. If an applicant for Part 4A permission (or Treaty firm) does so, the FCA will be able to use that dialogue to make an initial assessment of the fee categorisation and therefore indicate the authorisation fee that should be paid. …
3.2 Obligation to pay fees
3.2.1 R A person in column (1) of the table in FEES 3.2.7R as the relevant fee payer for
a particular activity must pay to the FCA (in its own capacity or, if the fee is payable to the PRA, in its capacity as collection agent for the PRA) a fee for each application or request for vetting, or request for support relating to compatibility of its systems with FCA systems, or admission approval made, or notification or notice of exercise of a Treaty right given, or other matter as is applicable to it, as set out or calculated in accordance with the provisions referred to in column (2) of the appropriate table:
…
…
3.2.2 G If an application for a Part 4A permission (or exercise of a Treaty right) falls
within more than one category set out in FEES 3 Annex 1, other than where one of the applications is an application under the benchmarks regulation, only one fee is payable. That fee is the one for the category to which the highest fee tariff

FCA 201X/XX applies. Where applications are made under the benchmarks regulation, a separate fee will be payable for this application. The relevant fee is set out in FEES 3.2.7R. …
3.2.7 R Table of application, notification, vetting and other fees payable to the FCA
Part 1: Application, notification and vetting fees
(1) Fee payer (2) Fee payable (£) (3) Due date … … … (b) Any Treaty firm that wishes to exercise a Treaty right to qualify for authorisation under Schedule 4 to the Act (Treaty rights) in respect of regulated activities for which it does not have an EEA right, except for a firm providing cross border services only [deleted] (1) Where no certificate has been issued under paragraph 3(4) of Schedule 4 to the Act the fee payable is, in respect of a particular exercise, set out in FEES 3
Annex 1, part 4
(2) Where a certificate in (i) has been issued no fee is payable On or before the notice of exercise is given … (ea) (i) An non-UK AIFM (other than a UK AIFM or an EEA AIFM with a branch in the UK) notifying the FCA of its intention to market an AIF in the UK under regulation 579 of the AIFMD UK regulation … FEES 3 Annex 2 R, part 4 On or before the notice of exercise is given … (o) In relation to a BIPRU firm, either:
(i) a firm applying to the
FCA for permission to use one of the advanced prudential calculation approaches listed in FEES 3
Annex 6R (or guidance on its
(1) Unless (2) applies,
FEES 3 Annex 6.
(2) (a) Unless (b) applies a firm submitting a second application for the permission or guidance described in column (1) within 12 months of the first Where the firm has made an application directly to the FCA, on or before the date the application is made, otherwise within 30 days after the FCA notifies the firm that its EEA parent's Home State regulator has requested assistance

FCA 201X/XX availability), including any future proposed amendments to those approaches or (in the case of any application being made for such permission to the FCA as EEA consolidated supervisor under the (transposing parts of the BCD and CAD, as applicable under article 95(2) of the EUCRR)) any firm making such an application; or (ii) in the case of an application to a Home State regulator other than the FCA for the use of the Internal Ratings Based approach and the Home State regulator requesting the FCA's assistance in accordance with the Capital Requirements Regulations 2006 (transposing parts of the BCD and CAD, as applicable under article 95(2) of the EU CRR), any firm to which the FCA would have to apply any decision to permit the use of that approach. application (where the fee was paid in accordance with (1)) must pay 50% of the fee applicable to it under FEES 3 Annex 6, but only in respect of that second application (b) No fee is payable by a firm in relation to a successful application for a permission based on a minded to grant decision in respect of the same matter following a complete application for guidance in accordance with prescribed submission requirements. (c) No fee is payable where the Home State regulator has requested the assistance described in paragraph (o)(ii) of column 1 except in the cases specified in FEES 3 Annex 6. (oa) Either:
(i) a firm applying to the
FCA for permission to use one of the internal approaches listed in FEES 3 Annex 6A (or guidance on its availability), including any future proposed amendments to those approaches or (in the case of any application being made for such permission to the FCA) as consolidating supervisor under the EU CRR UK CRR) any firm making such an application; or

FCA 201X/XX
(ii) in the case of an application to the consolidating supervisor other than the FCA for the use of the IRB approach and the consolidating supervisor requesting the FCA's assistance in accordance with the EU CRR UK CRR, any firm to which the FCA would have to apply any decision to permit the use of that approach. … (zy) (1) Subject to (2) and (3) below, any person applying to connect to the market data processor system to provide markets data (other than transaction reports) under MiFID and MiFIR MAR 10. (2) If a person has previously applied as stated in (zy)(1) above and has been connected then no further fee is payable for any further such applications in relation to reporting the same data. (3) If a person has previously applied as stated in (zy)(1) above and makes a further application in relation to the provision of different data then a separate fee is payable for such application. (1) Unless (2) applies, 10,000. (2) Any incoming data reporting services provider authorised by another EEA State will pay 80% of the fee at (1). [deleted] On the date the application is made. … 3 Annex 1 Part 4 - Authorisation Fees for Treaty Firms R If the Treaty firm wishes to undertake the permitted activities in question through its branch in the United Kingdom, the fee is 50% of the fee that would be payable under FEES 3.2.7R for an applicant for Part 4A permission.

FCA 201X/XX
If the Treaty firm wishes to undertake the permitted activities in question by providing services in the United Kingdom, the fee is 25% of the fee which would be payable under FEES 3.2.7R for an applicant for Part 4A permission. … 3 Annex 2 Legislative provision Nature and purpose of fee Payable by Amount of fee (£) Umbrella factor (note 1) …
Section 272 of
the Act
On application for an order declaring a scheme to be recognised where the scheme is:
An applicant an EEA AIF equivalent to a non-UCITS retail scheme 1500 2 an EEA AIF equivalent to a qualified investor scheme 2400 2 an non-EEA UK AIF or AIF equivalent to a non-UCITS retail scheme or a qualified investor scheme 8000 2 Where funds of any kind set out in Part 2 exist prior to 21 July 2018, a flat fee will be payable on an application for authorisation under the 300

FCA 201X/XX
Money Market
Funds
Regulation
…
Part 2B Application fees payable for UK or non-EEA firms applying for authorisation under
article 5 of the Money Market Funds Regulation
Article 5 of the
Money Market
Funds
Regulation
UK AIF (apart from those authorised as a non-UCITS retail scheme or a qualified investor scheme) 500 Non-EEA NonUK AIF which is marketed in the UK/EEA without a passport 750 Non-EEA NonUK AIF which is marketed in the UK/EEA with a passport or is not marketed in the UK/EEA 500 Non-EEA NonUK AIF which is not managed by an EU AIFM but is marketed in the UK/EEA with a passport 750 … 3 Annex 6A Fees payable for a permission or guidance on its availability in connection with the EU CRR UK CRR
Part 1

FCA 201X/XX
Fees payable in relation to internal approaches that require permission under Part Three of the EU CRR UK CRR other than the internal model method for counterparty credit risk. (1) Subject to (3), for applications made to the FCA to authorise a new internal approach:
(i) where the application relates to IFPRU investment firm and to five or more significant overseas entities within the same group (Group 1) and the application is for a permission to use one of the internal approaches in Tables 1 or 2 or guidance on the availability of such a permission, the fees in Table 1 are applicable; and (ii) for all other IFPRU investment firms the fees in Table 2 are applicable. (2) [deleted] (3) If however the application or request for assistance is in relation to the use of the Advanced IRB approach and the FCA (in the case of (1)) has already granted permission for the use of the Foundation IRB approach then Table 3 applies. (4) References to the internal approaches in Tables 1, 2 and 3 are to be construed as follows:
(i) Foundation IRB means the internal approach for credit risk referred to in article 143(1) of the EU CRR UK CRR; (ii) Advanced IRB means the internal approach for credit risk referred to in article 151(4) and (9) of the EU CRR UK CRR; and (iii) AMA means the internal approach for operational risk referred to in article 312(2) of the EUCRR UK CRR. (5) All fees are shown in £. …
4.1.4 G (3) The periodic fees for fee-paying payment service providers, fee-paying
electronic money issuers and TA EMIs, CBTL firms, data reporting service providers (other than incoming data reporting services providers and issuers of regulated covered bonds are set out in FEES 4 Annex 11R. This annex sets out the activity groups, tariff base, valuation dates and, where applicable, the flat fees due for these firms. … 4.2.7E R (1) (a) A firm (other than an AIFM qualifier, an ICVC, a UCITS qualifier, or an issuer of regulated covered bonds) which becomes authorised or registered, or whose permission and/or activities is extended, during the course of the fee year must pay a fee based on its projected valuation for the first twelve months of its new business.

FCA 201X/XX
(b) This is the valuation provided by the firm in the course of its application or if not provided at that time, the valuation provided subsequently. (2) The calculation for the first year of authorisation or registration for:
(a) an AIFM qualifier, an ICVC and a UCITS qualifier is in FEES 4
Annex 4R Part 1; and
…
…
4.2.8 R In relation to an incoming EEA firm or an incoming Treaty firm the modification
provisions of FEES 4.2.7R apply only in relation to the relevant regulated activities of the firm, which are passported activities or Treaty activities and which are carried on in the United Kingdom, and which are not provided on a cross border services basis. For payment services and electronic money issuance, the adjustment only applies to the business to which the calculation made in FEES 4.3.12AR relates. …
4.2.11 R Table of Periodic fees payable to the FCA

Fee
payer
Fee
payable
Due
date
Events occuring
during the period leading to the modified periodic fee Any firm (except an AIFM qualifier, ICVC or a UCITS qualifier) … … … … AIFM UK AIFM of a UK ELTIF an LTIF In relation to each ELTIF LTIF the amount specified in part 1 of FEES 4 Annex 4 … The ELTIF LTIF is authorised by the FCA under the ELTIF regulation LTIF Regulation

FCA 201X/XX
…
(i) An nonUK AIFM
(other than a
UK AIFM or an EEA
AIFM with a branch in the
UK) which has notified the FCA of its intention to market an AIF in the UK under regulation 579 of the AIFMD UK regulation and which has not ceased to market that AIF in the UK as at 1 April of the current fee year. (ii) An nonUK AIFM which has notified the FCA of its intention to market an AIF in the UK under regulation 58 or 59 of the AIFMD UK regulation and which has not ceased to market that AIF in the UK as at 1 April of the For each notification made by the AIFM of the kind specified in part 2 of FEES 4 Annex 4, the amount specified in part 2 of FEES 4 Annex 4 … …

FCA 201X/XX current fee year.
…
4.3.2 G …
(2) Incoming EEA firms, incoming Treaty firms, EEA authorised payment institutions and EEA authorised electronic money institutions receive a discount to reflect the reduced scope of the appropriate regulator's responsibilities in respect of them. The level of the discount varies from fee-block to fee-block, according to the division of responsibilities between the appropriate regulator and Home state regulators for firms in each fee-block (see FEES 4.3.11G, FEES 4.3.12R and FEES 4.3.12AR). [deleted] … Calculation of periodic fee for fee-paying payment service providers, CBTL firms, data reporting services providers (other than incoming data reporting services providers) and fee-paying electronic money issuers 4.3.3A R The periodic fee referred to in FEES 4.3.1R in relation to fee-paying payment service providers, CBTL firms, data reporting services providers (other than incoming data reporting services providers) and fee-paying electronic money issuers is calculated in accordance with FEES 4 Annex 11R. Modification for firms with new or extended permissions
4.3.4 G …
(3) These provisions apply (with some changes) to incoming EEA firms, incoming Treaty firms, EEA authorised payment institutions and EEA authorised electronic money institutions. [deleted] … … Incoming EEA firms, incoming Treaty firms, EEA authorised payment institutions and EEA authorised electronic money institutions
4.3.11 G (1) The FCA recognises that its responsibilities in respect of an incoming EEA
firm, an incoming Treaty firm, an EEA authorised payment institution or

FCA 201X/XX an EEA authorised electronic money institution are reduced compared with a firm which is incorporated in the United Kingdom. (2) Accordingly the periodic fees which would otherwise be applicable to incoming EEA firms, incoming Treaty firms, EEA authorised payment institutions and EEA authorised electronic money institutions are reduced. [deleted]
4.3.12 R For an incoming EEA firm, (excluding MTF and OTF operators), or an incoming
Treaty firm, the calculation required by FEES 4.3.3R is modified as follows:
(1) the tariffs set out in Part 1 of FEES 4 Annex 2AR are applied only to the regulated activities of the firm which are carried on in the United Kingdom; and (2) those tariffs are modified in accordance with Part 3 of FEES 4 Annex 2AR. [deleted] 4.3.12A R For:
(-1) (a) a full credit institution which is a fee-paying payment service provider and an EEA firm; or (b) a full credit institution which is a fee-paying electronic money issuer and an EEA firm; or (c) an EEA authorised payment institution; or (d) an EEA authorised electronic money institution; the calculation required by FEES 4.3.3AR is modified as follows:
(1) the tariffs set out in Part 5 of FEES 4 Annex 11 are only applied to the payment services or electronic money issuance of the firm carried on from an establishment in the United Kingdom, including any payment services carried on through any of its agents established in the United Kingdom; and (2) those tariffs are modified in accordance with Part 7 of FEES 4 Annex 11. [deleted] …

FCA 201X/XX
4.4 Information on which fees are calculated
…
4.4.2A R If a firm is a UK Solvency II firm, an incoming EEA firm or an incoming Treaty firm in activity group A.3 or A.4 and the PRA or the FCA has either:
(1) not received the necessary tariff data on a timely basis in line with Part 3 and 5 of FEES 4 Annex 1AR; or (2) deemed the tariff data received to be incomplete or insufficiently reliable, by reference to a specific firm or across all or part of the activity group, the FCA may use tariff data from the previous reporting period for the periodic fees calculation. …
4.4.5 R For an incoming EEA firm or an incoming Treaty firm, the information required
under FEES 4.4 is limited to the regulated activities of the firm which are carried on in the United Kingdom, except those provided on a cross border services basis. [deleted] 4 Annex 1AR FCA Activity groups, tariff bases and valuation dates …
Part 3
This table indicates the tariff base for each fee-block set out in Part 1. The tariff base in this Part is the means by which the FCA measures the amount of business conducted by a firm for the purposes of calculating the annual periodic fees payable to the FCA by that firm. Activity group Tariff base … … A3 (1) for UK Solvency II firms, a firm’s gross written premium as reported to the PRA, being the total of items entered under row codes R0110, R0120 and R0130, as expressed in column code C0200 where this column is completed for those row codes of the annual quantitative reporting template S.05.01.01; and

FCA 201X/XX
(2) for incoming EEA firms or incoming Treaty firms, a firm’s gross written premium as reported to their Home State regulator, being the total of items entered under row codes R0110, R0120 and R0130, as expressed in column code C0200 where this column is completed for those row codes, of the annual quantitative reporting template S.05.01.01 but only in relation to the regulated activities of the firm which are carried on in the United Kingdom, (except those provided on a cross border services basis); and [deleted] (3) … AND Best estimate liabilities for fees purposes means:
(1) for UK Solvency II firms, a firm’s best estimate liabilities as reported to the PRA, being the sum of items entered under row codes R0010, R0370, R0380, R0410 and R0420, column code C0180, of the annual quantitative reporting template S17.01.01; plus the sum of items entered under row codes R0010, R0030, column codes C0090, C0140 and C0190, of the annual quantitative reporting template S12.01.01; and (2) for incoming EEA firms or incoming Treaty firms, a firm’s best estimate liabilities as reported to their Home State regulator, being the sum of items entered under row codes R0010, R0370, R0380, R0410 and R0420, column code C0180, of the annual quantitative reporting template S17.01.01; plus the sum of items entered under row codes R0010, R0030, column codes C0090, C0140 and C0190, of the annual quantitative reporting template S12.01.01 but only in relation to the regulated activities of the firm which are carried on in the United Kingdom, except those provided on a cross border services basis; and [deleted] (3) … … … A4 GROSS WRITTEN PREMIUM FOR FEES PURPOSES AND BEST ESTIMATE LIABILITIES FOR FEES PURPOSES (see FEES 4 Annex 12G ) Gross written premium for fees purposes means:

FCA 201X/XX
(1) for UK Solvency II firms, a firm’s gross written premium as reported to the PRA, being the item entered under row code R1410, column code C0300 of the annual quantitative reporting template S05.01.01 minus corporate pension business as reported to the PRA under the annual quantitative reporting template S14.01.01; and (2) for incoming EEA firms or incoming Treaty firms, a firm’s gross written premium as reported to their Home State regulator, being the item entered under row code R1410, column code C0300 of the annual quantitative reporting template S05.01.01 minus corporate pension business as reported to the PRA under the annual quantitative reporting template S14.01.01 but only in relation to the regulated activities of the firm which are carried on in the United Kingdom, except those provided on a cross border services basis [deleted] AND Best estimate liabilities for fees purposes means:
(1) for UK Solvency II firms, a firm’s best estimate liabilities as reported to the PRA, being the sum of items entered under row codes R0010 and R0030, column codes C0150 and C0210 minus the sum of items entered under row codes R0010 and R0030, column codes C0090, C0140 and C0190 of the annual quantitative reporting template S12.01.01; minus corporate pension business reported under the annual quantitative reporting template S14.01.01; and (2) for incoming EEA firms or incoming Treaty firms, a firm’s best estimate liabilities as reported to their Home State regulator, being the sum of items entered under row codes R0010 and R0030, column codes C0150 and C0210 minus the sum of items entered under row codes R0010 and R0030, column codes C0090, C0140 and C0190 of the annual quantitative reporting template S12.01.01; minus corporate pension business reported under the annual quantitative reporting template S14.01.01 but only in relation to the regulated activities of the firm which are carried on in the United Kingdom, except those provided on a cross border services basis. [deleted]

FCA 201X/XX
…
… …
4 Annex
2AR
FCA Fee rates and EEA/Treaty firm modifications for the period from 1 April 2018 to 31 March 2019 [deleted] …
Part 3
This table shows the modifications to fee tariffs that apply in respect of the FCA to incoming EEA firms and incoming Treaty firms which have established branches in the UK. Activity group Percentage deducted from the tariff payable under Part 1 applicable to the firm A.1 10% A.3 10% A.4 10% A.7 10% A.9 10% A.10 In relation to each trader that carries on auction regulation bidding but not MiFID business bidding or dealing in investments as principal, 100%. In relation to all other traders, 10%. A.13 10% A.18 10% A.19 50% B. MTF and OTF operators Not applicable AP.0 100% Note 1 The modifications to fee tariffs payable by an incoming EEA firm or an incoming Treaty firm which has established a branch in the UK apply only in relation to the relevant regulated activities of the firm

FCA 201X/XX which are passported activities or Treaty activities and which are carried on in the UK. Note 2 The FCA minimum fee described in Part 2 of FEES 4 Annex 2A R applies in full and the modifications in this Part do not apply to it. [deleted] … 4 Annex 4R Periodic fees in relation to collective investment schemes, AIFs marketed in the UK, small registered UK AIFMs and money market funds payable for the period 1 April 2018 to 31 March 2019
Part 1 - Periodic fees payable
Scheme type Basic fee (£)
Total funds/subfunds aggregate
Fund factor Fee (£)
ICVC,
AUT,
ACS,
LTIFs UK
ELTIFs,
Money market funds with effect from 21
July 2018
Section 264 of
the Act, schemes other than non-EEA
AIFs recognised under section
272 of the Act,
386 1-2
3-6
7-15
16-50

50
1
2.5
5
11
22
386
965
1,930
4,246
8,492
Non-EEAUK
AIFs recognised under section
272 of the Act
1,570 1-2
3-6
1
2.5
1,570
3,925

FCA 201X/XX
7-15
16-50

50
5
11
22
7,850
17,270
34,540
…
4 Annex
10R
Periodic fees for MTF operators payable in relation to the period 1 April 2018 to 31 March 2019 … … … … An EEA firm 0 … … 4 Annex 11R Periodic fees in respect of payment services, electronic money issuance, regulated covered bonds, CBTL business and data reporting services in relation to the period 1 April 2018 to 31 March 2019 …
Part 2 - Activity groups relevant to fee-paying payment service providers
…
Activity group Fee payer falls into this activity group if:
… …
G.3 Large payment institutions and registered account information service providers it is a fee-paying payment service provider that is an authorised payment institution, an EEA authorised payment institution, a registered account information service provider, an EEA registered account information service provider, the Post Office Limited or a fee-paying electronic money issuer (except if it is a small electronic money institution) … … …

FCA 201X/XX
Part 7 - This table shows the modifications to fee tariffs that apply to EEA authorised payment
institutions, EEA authorised electronic money institutions, and full credit institutions that are EEA firms. Activity group Percentage deducted from the tariff payable under Part 5 applicable to the firm Minimum amount payable G.2 40% G.3 40% G.10 40% [deleted] 5 Financial Ombudsman Service Funding …
5.4 Information requirement
…
5.4.1-A R …
(2) If a firm is a UK Solvency II firm, an incoming EEA firm or an incoming Treaty firm in industry blocks 2 and 4 in FEES 5 Annex 1R, the FCA may use tariff data from the previous reporting period for the periodic fees calculation if the PRA or the FCA has either:
…
…
5 Financial Ombudsman Service Funding
…
5 Annex
1R
Annual General Levy Payable in Relation to the Compulsory Jurisdiction for 2018/19 … Compulsory jurisdiction - general levy

FCA 201X/XX
Industry block Tariff base General levy payable by firm … 11-fee-paying payment service providers (but excluding firms in any other Industry block except Industry block 18) For authorised payment institutions, registered account information service providers, electronic money issuers (except for small electronic money institutions), the Post Office Limited, the Bank of England, government departments and local authorities, and EEA authorised payment institutions relevant income as described in FEES 4 Annex 11 Part 3 £0.0003 per £1,000 of relevant income subject to a minimum levy of £75 For small payment institutions and small electronic money institutions a flat fee Levy of £35 … … 7A SFGB levies 7A.1 Application and purpose … 7A.1.2 R The SFGB pensions guidance levy applies to a firm that:
(1)
(a) has a Part 4A Permission; or
(b) is an incoming EEA firm with a branch in the United Kingdom; or (c) is an incoming Treaty firm with a branch in the United Kingdom; and … …

FCA 201X/XX
7A.3 The SFGB money advice levy and debt advice levy … 7A.3.10 R Table of rules in FEES 4 that also apply to FEES 7A to the extent that in FEES 4 they apply to fees payable to the FCA FEES 4 rules incorporated into FEES 7A Description … … FEES 4.2.8R How FEES 4.2.7R applies in relation to an incoming EEA firm or an incoming Treaty firm … … … 7A
Annex
2R
FGB debt advice levy for the period from 1 April 2018 to 31 March 2019… …
Part 2
…
Activity Group Tariff base
… …
Notes Note
(1) …
(2) The tariff base for an incoming EEA firm or an incoming Treaty firm is the same as set out above but limited to the regulated activities of the firm which are carried out in the United Kingdom, except those provided on a cross border services basis, and should be reported to the FCA as required by FEES 4.4.1R and FEES 4.4.2R. The valuation date is in accordance with the CC.3 valuation date in Part 3. …

FCA 201X/XX
10.1.1 R This chapter applies to a firm that:
(1) (a) has a Part 4A Permission; or
(b) is an incoming EEA firm with a branch in the United Kingdom; or (c) is an incoming Treaty firm with a branch in the United Kingdom; and … …
10.5.4 R Table of rules in FEES 4 that also apply in FEES 10.
FEES 4 incorporated into
FEES 10
Description Modification
… … …
FEES 4.2.7R How FEES 4.2.7R applies to an incoming EEA firm or an incoming Treaty firm None. … … … … 13 Illegal money lending levy
13.2 The IML levy
13.2.6 R The modifications:
(1) for incoming EEA firms and incoming Treaty firms which have established branches in the UK in Part 3 of FEES 4 Annex 2AR apply; and (2) for EEA authorised payment institutions, EEA authorised electronic money institutions, and full credit institutions that are EEA firms in Part 7 of FEES 4 Annex 11R apply. [deleted] …

FCA 201X/XX
13.2.9 R Table of rules in FEES 4 that also apply to FEES 13 to the extent that in FEES 4
they apply to fees payable to the FCA.
FEES 4 rules incorporated into
FEES 13
Description
… …
FEES 4.2.8R How FEES 4.2.7R applies in relation to an incoming EEA firm or an incoming Treaty firm … … …
Part 2: comes into force on 1 April 2019
[Editor’s note: the text in this Part takes into account the changes made by FCA 2018/22 which come into effect on 1 April 2019.] 6 Financial Services Compensation Scheme Funding
6.1 Application
…
6.1.2 G (1) Firms which are not participant firms (such as certain types of incoming
EEA firms, service companies, and ICVCs and, for the purposes of FEES 6, pre-exit incoming EEA firms) are not required to contribute towards the funding of the compensation scheme. … … Incoming EEA firms
6.1.17 G Incoming EEA firms which obtain cover or “top up” under the provisions of
COMP 14 are firms whose Home State scheme provides no or limited compensation cover in the event that they are determined to be in default. Under FEES 6.6, the FSCS is required to consider whether incoming EEA firms should receive a discount on the amount that they would otherwise pay as their share of the levy, to take account of the availability of their Home State cover. The amount of any discount is recoverable from the other members of the incoming EEA firm’s class. [deleted] …
6.3 The FSCS’s power to impose levies

FCA 201X/XX
…
Adjustments to calculation of levy shares
6.3.22 R The FSCS may adjust the calculation of a participant firm’s share of any levy to
take proper account of:
…
(5) FEES 2.3 (Relieving Provisions), FEES 6.4.8R (New participant firms), FEES 6.5.9R (New participant firms), or FEES 6.3.23R (Remission of levy or additional administrative fee) or FEES 6.6 (Incoming EEA firms); or … …
6.6 Incoming EEA firms [deleted]
6.6.1 R If an incoming EEA firm, which is an IDD insurance intermediary, an MCD
mortgage credit intermediary or a MiFID investment firm, is a participant firm, the FSCS must give the firm such discount (if any) as is appropriate on the share of any levy it would otherwise be required to pay, taking account of the nature of the levy and the extent of the compensation coverage provided by the firm’s Home State scheme. [deleted] … 6 Annex 3AR Financial Services Compensation Scheme – classes and categories This table belongs to FEES 6.5.6AR … … Class 2 Investment Intermediation Claims … Category 2.3 Investment provision Firms with permission for:
any of the following:
… managing a UK UCITS;
…

FCA 201X/XX
…
Insert the following new TP 21 after FEES TP 20 (Transitional provisions relating to changes to the FSCS levy arrangements taking effect in 2019/20). The text is not underlined. TP 21 Transitional provisions relating to FSCS levy arrangements after 1 April 2019 (1) (2) (3) (4) (5) (6) Material to which the transitional provision applies Transitional provision Transitional provision:
dates in force
Handbook provisions coming into force
21.1 The changes
made to FEES 6 by the Exiting the European Union: High Level Standards (Amendments) Instrument 201[X] R The changes in column (2) apply to any levy made after 1 April 2019. This is even if:
(1) the claim against the relevant person or successor in default arose or relates to circumstances arising before that date; or (2) the relevant person or successor was in default before that date. From 1 April 2019, indefinitely 1 April 2019

FCA 201X/XX
EXITING THE EUROPEAN UNION: MISCELLANEOUS (AMENDMENTS) INSTRUMENT 201[X] Powers exercised A. The Financial Conduct Authority makes this instrument in the exercise of:
(1) regulation 3 of the Financial Regulators’ Powers (Technical Standards etc.) (Amendment etc.) (EU Exit) Regulations 2018; and (2) section 139A (Power of the FCA to give guidance) of the Financial Services and Markets Act 2000. Commencement B. This instrument comes into force on [29 March 2019 at 11 p.m.]. Amendments to the Handbook
C. The modules of the FCA’s Handbook of rules and guidance listed in column (1)
below are amended in accordance with the Annexes in this instrument listed in column (2) below. (1) (2) General Prudential sourcebook (GENPRU) Annex A Prudential sourcebook for Investment Firms (IFPRU) Annex B Prudential sourcebook for Mortgage and Home Finance Firms, and Insurance Intermediaries (MIPRU)
Annex C
Interim Prudential sourcebook for Investment Businesses (IPRU-INV)
Annex D
Compensation sourcebook (COMP) Annex E
Cross-cutting definitional changes Annex F Amendments to material outside the Handbook D. The General Guidance on Benchmark Submission and Administration (BENCH) is amended in accordance with Annex G to this instrument. Citation E. This instrument may be cited as the Exiting the European Union: Miscellaneous (Amendments) Instrument 201[X]. By order of the Board [date]

FCA 201X/XX

Brexit: Proposed changes to the Handbook and Binding Technical Standards – second consultation

Lineage: In force

Timeline

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