MIFID Change of legal status application notes · Web viewMIFID Change of legal status application...

Change of legal status for MiFID firmsApplication and Cancellation form – notes

FCA Change of Legal Status for MiFID Firms (notes) (application & cancellation) Release 4 December 2019

Providing the information requested in the Change of legal status Application and Cancellation form for MiFID firms will, together with information provided in other parts of this application pack enable you to:

Comply with your obligation to provide information under Article 7(2) of MiFID. Please refer to the RTS when completing this form.

Supply the FCA with everything we need to assess your application against the Threshold Conditions in FSMA.

Supply the FCA with everything we need to process the application and to prepare for the supervision of the firm (such as information relating to prudential categories).

Please take time to read these notes carefully. They will help you to fill in the Change of legal status Application and Cancellation form for MiFID firms correctly.

When completing the Change of Legal status application you will need to refer to the FCA Handbook, our consultations on changes to the Handbook as part of the implementation of MiFID II (CP 15/43, CP 16/19, CP 16/29 and CP 16/43, together “the MiFID II CPs”, and any related policy statements), and relevant EU law requirements and guidelines.

A link to the Handbook is here: https://www.handbook.fca.org.uk/handbook/

If after reading these notes you need more help please: check our website: www.fca.org.uk call the Customer Contact Centre: 0300 500 0597 email the Customer Contact Centre: [email protected]

These notes, while aiming to help you, do not replace the rules and guidance in The Handbook.

Important information

At the point of authorisation we expect the applicant firm to be ready, willing and organised to start business.

mailto:[email protected]

http://www.fca.org.uk/

https://www.handbook.fca.org.uk/handbook/

APPLICATION FORM – Introductory Notes


Terms in these notesThese notes use the following terms:

'you' refers to the person(s) signing the form on behalf of the applicant firm 'the applicant firm' refers to the firm applying for authorisation ‘we’, ‘us’, ‘our’ or ‘FCA’ refers to the Financial Conduct Authority ‘FSMA’ refers to the Financial Services and Markets Act 2000 ‘MiFID’ refers to the Markets in Financial Instruments Directive (Directive 2014/65/EU of the

European Parliament and of the Council) ‘FRN’ Firm’s Reference Number ‘RTS’ refers to Regulatory Technical Standards under Article 7(4) of MiFID II as adopted by the

European Commission on 14 July 2016: http://ec.europa.eu/finance/securities/docs/isd/mifid/rts/160714-rts-authorisation_en.pdf. ‘ITS’ refers to Implementing Technical Standards under Article 7 (5) of MiFID II (the ITS has not yet been adopted by the European Commission but the draft ITS can be found in the ESMA Final Report on “MiFID II/MiFIR draft Technical Standards on authorisation, passporting, registration of third country firms and cooperation between competent authorities” of 29 June 2015 – ESMA/2015/1006 https://www.esma.europa.eu/sites/default/files/library/2015/11/2015-esma-1006_-_mifid_ii_final_report_on_mifid_ip_technical_standards.pdf .

‘MTF’ refers to Multilateral Trading Facility ‘ESMA’ refers to the European Securities and Markets Authority ‘OTF’ refers to Organised Trading Facility ‘CRD IV’ refers to the Directive 2013/36/EU of the European Parliament and of the Council ‘CRR’ refers to the Regulation (EU) No 575/2013 of the European Parliament and of the Council

Contents Introductory Notes 3

MiFID Authorisation Form 5 List of members of the management body form 6

1 General information 72 Information on capital 133 Information on shareholders 274 Information on the management body 35

and persons who direct the business5 Financial information 376 Information on the organisation of the firm 407 Application fee 438 Supporting Documentation 449 Deed poll and declaration 45

https://www.esma.europa.eu/sites/default/files/library/2015/11/2015-esma-1006_-_mifid_ii_final_report_on_mifid_ip_technical_standards.pdf

https://www.esma.europa.eu/sites/default/files/library/2015/11/2015-esma-1006_-_mifid_ii_final_report_on_mifid_ip_technical_standards.pdf

http://ec.europa.eu/finance/securities/docs/isd/mifid/rts/160714-rts-authorisation_en.pdf

Help with this application

What if the applicant's plans change during the application process?

APPLICATION FORM - Introductory Notes

Introductory Notes

Please take time to read these notes – they will help you to fill in the form correctly.It is a criminal offence – knowingly or recklessly – to give the FCA information that is false, misleading or deceptive. Failing to disclose, providing inaccurate or incomplete information could result in a significant delay in the authorisation process.It may also call into question the applicant's suitability to be authorised.The Financial Services and Markets Act 2000 (FSMA) does not permit the 'transfer' of an authorisation from one firm to another. If an existing authorised firm changes its legal status, it becomes a new legal entity. The new legal entity must apply to be authorised in its own right.

We have produced this application to help existing firms that wish to change their legal status (for example, a partnership converting to a limited company) without changing their business in any other respect.

Getting professional helpWe have streamlined this application to make it simpler for you to complete. However, should you utilise the services of a professional person to assist you with this process on your behalf, you must remain closely and actively involved in the application process – including requests for any additional information we may make. Please note we will hold you responsible for the accuracy of all the information in the form and any additional information provided.

It is your responsibility to notify us in writing of any changes that occur after this application has been submitted. If we require any further information as a result of these changes, we will contact you.


What happens after submitting the application?

What happens when the FCA has made its decision?

APPLICATION FORM - Introductory Notes

• We will write to tell you we have received the application and the payment of the application fee in full.• We will allocate the application to a case officer who will contact you.• We may ask:

- you to provide more information or documents- to visit you at your premises- the senior management to attend a meeting at our premises.

We are required by law to determine applications within the earlier of (a) six months of receiving a completed application or (b) 12 months of receiving an incomplete application. However, we aim to determine the application as soon as possible and publish service standards setting out our target for – and actual performance in – processing applications. For details of our current performance against these standards please see our website.

Further informationIn particular cases, we may need to ask for further information; and we reserve the right to require you to complete parts or all of the standard application as necessary.

Annual feeRegardless of when in the quarter the applicant is authorised it will be charged the full fee for that quarter (see FEES 4.2.6.R).

We will write to tell you if the applicant has been granted Part 4A permission. If we propose to refuse an application, we will send you a warning notice and you will have the right to make representations. Please refer to the Decision Making Manual (DEC) in the Handbook for details of this procedure:https://www.handbook.fca.org.uk/handbook/DEPP


https://www.handbook.fca.org.uk/handbook/DEPP

APPLICATION FORM – MiFID Authorisation Form

MiFID Authorisation Form

The notes below will help you complete the MiFID Authorisation Form.Reference numberThis reference number should be the Firms Reference Number (FRN).

DateThis should be the date that you are submitting the application.

FromThis should be the name of the applicant firm and the address of the applicant firm’s principal place of business.

Contact details of the designated contact personThis should be the contact person at the applicant firm.

ToThis should be the FCA’s details.

Contact details of the designated contact pointYou should address the application to the Authorisations Support Team. Once a case officer is allocated they will contact you.

Person in charge of preparing the applicationIf this is the same person as the contact details supplied in the form, please enter ‘see contact details in form’.

Nature of the applicationNo additional notes

CONTENTYou will be able to complete this form using the Change of legal status for MiFID firms Application and Cancellation Annex. Ensure you write under each section of the contents the relevant section(s) of the form and/or other forms used for providing us with the RTS information referred to. For example, for section 3 of the MiFID Authorisation Form you may need to write: ‘The information specified in Article 3 of the RTS has been provided in Section 3 of the Application and Cancellation Form.Ultimately, it is your responsibility to ensure that you have provided us with all of the information specified in the RTS.


(NOTES) List of members of the management body

List of members of the management body form

The notes below will help you complete the List of members of the management body form.Reference numberThis reference number should be the Firms Reference Number (FRN).

DatePlease enter the date that you are submitting the application.

FromThis should be the name of the applicant firm and the address of the applicant firm’s principal place of business.

Contact details of the designated contact personThis should be the contact person at the applicant firm.

ToThis should be the FCA’s details.

Contact details of the designated contact pointYou should address the application to the Authorisations Support Team. Once a case officer is allocated they will contact you.

Person in charge of preparing the applicationIf this is the same person as the contact details supplied in the form, please enter ‘see contact details in form’.

List of members of the management bodyYou must complete the details of each of the members of the management body. If you need additional space please use separate sheets of paper, clearly mark them and attach them to your application.If you are completing a Form A for the individual, insert the individual’s name and then add ‘please see Form A for details’.


APPLICATION FORM (NOTES) 1 – General information

1 General informationPlease note that Article 7 of the RTS specifies that the information subject to the RTS should refer to both the head office of the firm and its branches and tied agents in respect of Article 1.

1.1 Please confirm that any information that has not been provided in this section: (i) has already been provided to us and (ii) remains true, accurate and up-to-dateIf you have already provided us with any of the information specified in the RTS and/or the questions in this form, and if that information remains true, accurate and up-to-date, please confirm that here. As long as that is the case, we do not expect you to provide us with the same information again. Please refer to this declaration in the questions to which it is relevant. Where we do not already have the information, or where we have been provided with information but it is no longer true, accurate and up-to-date, you must provide the information specified.

About the existing firm

1.2 Why is the firm applying to change its legal status?No additional notes

1.3 Does the firm want its cancellation date to be the same as the applicant's authorisation date?No additional notes

Legal status

1.4 Legal status of the firm and the applicantSee Article 1(a) of the RTS. The firm and the applicant must fall into one of the categories listed in the question to apply for authorisation.

1.5 Date of incorporation or formation of the applicant (dd/mm/yyyy)We ask for this information to understand whether there is any previous history that could affect the application. To be completed only if the firm is a legal entity. This does not apply to sole traders.

1.6 Where was the applicant firm incorporated or formed?We ask for this information to assess possible links to other jurisdictions. To be completed if the firm is a legal entity. This does not apply to sole traders.

Contact for this application

1.7 Contact detailsNo additional notes


(NOTES) 1 – General information

Details of professional adviserSome applicant firms seek professional help in completing the application (eg from a compliance consultant or lawyer). Questions 1.8 to 1.12 ask if the applicant firm has had such help, and if so, requests details of its adviser.

1.8 Has the applicant used a professional adviser to assist with this application?No additional notes

1.9 Name of professional adviser's firmNo additional notes

1.10 Does the applicant want the FCA to copy correspondence to the professional adviser?Please note that while we will copy correspondence to the applicant firm's professional advisers, we will always deal directly with the applicant firm when processing the application.

1.11 Name and contact details of professional adviserYou do not need to complete the question if you do not want correspondence to be copied to the professional adviser.

Corporate documents and evidence of registration

1.12 Please attach the following;

Certificate of incorporation

Copy of Partnership agreement deeds (if applicable)

Copy of Limited Liability Partnership agreement deeds (if applicable)

See Article 1(c) of the RTS. These should be attached where applicable.Please mark each copy 'this is a true copy of the original' and make sure it is signed and dated by the individual(s) who signs the application form.

1.13 Does the applicant firm have a registered number, eg Companies House number?See Article 1(a) of the RTS.

1.14 Please confirm that all the details given in Questions 1.12-1.13, and any details provided in Appendix 1a, match the Companies House’s recordsThis assists us with verifying the information submitted with the application.

1.15 Does the applicant firm have a Legal Entity Identifier (LEI) code?A LEI is a 20 character reference code. The LEI initiative is designed to create a global reference data system that uniquely identifies every legal entity or structure, in any jurisdiction, that is party to a financial transaction.We are required to notify ESMA on the firm’s LEI. This information will be published on the ESMA’s register.



Financial year end for applicant

1.16 Date of applicant’s financial year end (dd/mm)We request this information to determine the applicant firm's deadlines for reporting to us after being authorised.If the applicant firm is a limited company the date you enter here must match that in the Companies House Registration.

Applicant's business

1.17 Provide a brief summary of the arrangements the applicant has made to ensure that all rights and obligations (eg assets and liabilities) of the regulated activities including past business carried on by the firm are legally transferred to the applicant. This should include, for example, the arrangements for communicating the transfer to clients. No additional notes

Transfer of clients

1.18 Does the firm anticipate any difficulty in obtaining client consent to transfer the business to the applicant?No additional notes

1.19 Provide details of how you have resolved, or plan to resolve, any difficulties encountered in obtaining client consent to transfer the business to the applicant.If the answer is yes to Question 1.18, the applicant may have to apply to us for a temporary waiver – for example, for activities relating to client agreements, the provision of risk warnings, or with regards to client assets. Please email the FCA at [email protected]

Transfer of existing waivers

1.20 Does the firm have any existing waivers it wishes to transfer to the applicant?

and

1.21 You must list below the details of the firm's waivers that it is asking to be re-issued to the applicant. Existing waivers that have been granted to the existing firm cannot be automatically transferred to the applicant; however, we may consider doing this on a case-by-case basis. We will contact you to discuss whether a full application form is needed for the re-issue of these waivers. For more details please email us at [email protected] for further information.





Permission profile This pack should not be used if the applicant wants a permission different from that of the existing firm. You should check the firm's current scope of permission is still relevant and request the same permission. The only exception is where an applicant wants a narrower scope of permission for reasons connected with the change of legal status (for example if the only pension transfer qualified partner/director is leaving).

1.22 Is the applicant applying for the same or a narrower Scope of Permission notice? No additional notes

1.23 Please state the activity/activities that you wish to deletePlease include any MiFID investment services and/or financial instruments as well as FSMA activities.

1.24 Please explain why you would like this activity to be deletedPlease explain here why you would like to remove any MiFID investment services and/or financial instruments as well as FSMA regulated activities that map to these activities.

1.25 You must complete the following table to supply a list of MiFID investment services and activities and financial instruments the applicant firm is authorised to carry out and will continue to carry out.This information is required under Article 1(b) of the RTS.

MiFID authorisationIn addition to specifying the FSMA regulated activities for which it is seeking permission, a MiFID firm and an Article 3 MiFID exempt firm must also specify the MiFID investment services and activities, it wishes to carry on A person seeking authorisation under MiFID is required to provide this information under Article 1(b) of the ITS. We apply the same requirement to persons applying to be Article 3 exempt firms because we must apply at least analogous requirements to them (see above).

However, the Part 4A permission will describe the permission in terms of the FSMA regulated activities the firm is authorised to perform only. As such, the permission uses different terminology to that contained in MiFID. When authorised we will also confirm to you the MiFID investment services and activities that map with your Part 4A permission.

When completing the table in Question 1.25 you should map your proposed Part 4A permissions to the corresponding MiFID investment services and activities using the mapping process below.

The MiFID investments and activities (A1-9) listed below are those contained in Annex 1 Section A of MiFID. Terms shown in italics appear in the Glossary to the FCA’s Handbook.

Reception and transmission of orders in relation to one or more financial instruments [A1] Firms with an ‘arranging (bringing about) deals in investments’ permission in relation to one or more of the FCA investment permission categories identified below without an ‘exempt CAD firm –' may receive investment advice only’ type requirement:

Share

FCA Change of Legal Status for MiFID Firms (notes) (application & cancellation) Release 4 December 2019 page


Debenture Alternative Debenture Government and public security Warrant Certificate representing certain securities Unit Emissions allowances Rights to or interests in investments (Security) Option (excluding a commodity future) Commodity Option Future (excluding a commodity future) Commodity Future Contract for Differences Binary Bet Spread Bet Rolling spot forex contract Rights to or interests in investments (Contractually Based

Instruments)

Execution of orders on behalf of clients [A2]Firms with a ‘dealing in investments as agent or dealing in investments as principal’ permission in relation to one or more of the FCA investment permission categories identified in A1 above, without an ‘exempt CAD firm’ requirement.

Dealing on own account [A3]Firms with a ‘dealing in investments as principal’ permission in relation to one or more of the FCA investment permission categories identified in A1 above, without one or more of a ‘limited licence’, ‘box management’, ‘limited to stock lending activity’ or ‘exempt CAD firm’ limitation or requirement on their permission.

Portfolio management [A4]Firms with a ‘managing investments’ permission in relation to one or more of the FCA investment permission categories identified in A1 above without an ‘exempt CAD firm’ requirement.

Investment advice [A5]Firms with an ‘advising on investments’ permission in relation to one or more of the FCA investment permission categories identified in A1 above without an ‘exempt CAD firm – may receive and transmit orders only’ type requirement.

Underwriting of financial instruments and/or placing of financial instruments on a firm commitment basis [A6]Firms with a ‘dealing in investments as principal’ permission in relation to one or more of the FCA investment permission categories identified in A1 above, but without one or more of the following limitations/requirements:

‘limited licence’ ‘limited activity’ ‘matched principal broker’ ‘box management’ ‘limited to stock lending activity’ ‘exempt CAD firm’

Placing of financial instruments without a firm commitment basis [A7]Firms with a ‘dealing in investments as agent or arranging (bringing about) deals in investments’ permission in relation to one or more of the FCA



investment permission categories identified in A1 above and which do not have a requirement preventing them from placing financial instruments without a firm commitment basis (ie the short form requirement ‘BIPRU firm MiFID activity restriction’ or an ‘exempt CAD firm’ requirement).



Operation of an MTF [A8]Firms with an ‘operating a multilateral trading facility’ permission in relation to one or more of the FCA investment permissions categories identified in A1 above.

Operation of an OTF [A9]Firms with an ‘operating a trading facility’ permission in relation to one or more of the FCA investment permissions categories identified in A1 above (except shares).

The regulated activity of bidding in emissions auctions relates only to the investment type of emission auction products. This activity maps across to A1 and A2 above.


(NOTES) 2 – Information on capital

2 Information on capital

We use this section of the form to collect the information specified in Article 2 of the RTS in addition to the information we need to determine the applicant’s prudential categorisation for supervisory purposes.

2.1 Please confirm that the information that you have previously provided to us is, in accordance with Article 2 (Information on the organisation of the firm) and remains true, accurate and up-to-date.If you have already provided us with any of the information specified in the RTS and/or the questions in this form, and if that information remains true, accurate and up-to-date, please confirm that here. As long as that is the case, we do not expect you to provide us with the same information again. Please refer to this declaration in the questions to which it is relevant. Where we do not already have the information, or where we have been provided with information but it is no longer true, accurate and up-to-date, you must provide the information specified.

2.2 What is the applicant firm?

Please refer to the flowchart in Annex 4 of the MiFID II Application and notification guide: https://www.fca.org.uk/publication/documents/mifid-ii-application-notification-guide.pdf#page=84 .This will help you work out which prudential requirements apply to you.

IFPRU Firms

2.3 You must state the gross amount of each source of capital in accordance with the relevant CRR Articles (Part 2 of CRR). The gross amount is the total amount of capital in issuance ie before prudential filters, deductions and limits on amounts that can be recognised.

2.4 Does the applicant firm meet the criteria of a significant IFPRU firm?A significant IFPRU firm is an IFPRU firm that exceeds the threshold for one or more of the following (see IFPRU 1.2.3R https://www.handbook.fca.org.uk/handbook/IFPRU/1/2.html#DES72 ):

total assets of £530 million total liabilities of £380 million annual fees and commission income of £160 million client money of £425 million client assets of £7.8 billion

2.5 Is the applicant firm required to report FINREP?A firm required to report FINREP is either:

a) a credit institution or investment firm subject to the EU CRR that is also subject to Article 4 of Regulation (EC) No 1606/2002, or

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.

This is a requirement under IFPRU 1.5.1R.


https://www.handbook.fca.org.uk/handbook/IFPRU/1/2.html#DES72

https://www.fca.org.uk/publication/documents/mifid-ii-application-notification-guide.pdf#page=84

https://www.fca.org.uk/publication/documents/mifid-ii-application-notification-guide.pdf#page=84


2.6 You must complete the following 2 forms and attach them to your application unless you are an exempt IFPRU commodities firm:-

CRR Permissions form, see www.fca.org.uk/your-fca/documents/forms/crr-permission-application-form

Common Equity Tier 1 issuance application form, see www.fca.org.uk/static/documents/forms/crr-article-26-3-self-assessment-form.doc

IFPRU investment firms (other than exempt IFPRU commodities firms) must apply for a CRR permission to confirm that the instrument(s) that they are treating as Common Equity Tier 1 qualify to be treated as such. Firms must complete and submit the Article 26(3) self-assessment form as additional supporting documentation in their CRR permissions application: http://www.fca.org.uk/firms/being-regulated/waiver/crr-permission-application-guidelines

BIPRU firms

2.7 You must state the gross amounts of each source of capital in accordance with GENPRU 2.2 requirements. The gross amount is the total amount in issuance ie before any deductions.The gross amount is the total capital amount in issuance ie before any deductions.

Exempt CAD Firms / Article 3 MiFID exempt firm / Sole Traders / Local Firms / Exempt IFPRU commodities firms/ Exempt BIPRU commodities firms

2.8 You must state the gross amounts of each source of capital in accordance with Chapter 3, 5, 9 and 13 of IPRU (INV) We need to know the sources of the capital in the applicant firm and how these amounts are made up. Capital is the money or assets in your business. The different types are described briefly below.

Ordinary share capital: these are ordinary shares that the applicant firm has been paid for in full. Ordinary shares are the most common type of share. They typically carry full voting and dividend rights and their owners are the owners of the company.

Preference share capital: these are shares that pay a fixed dividend. Holders of preference shares receive their dividend before holders of ordinary shares. For the FCA definition please see the Handbook Glossary entry for preference share: https://www.handbook.fca.org.uk/handbook/glossary/?starts-with=P

Share premium account: this is a reserve of money set up in the applicant firm's accounts to account for the issue of new shares above their par value ie if you issue some shares at £1 each and you keep some back which you then sell at £1.50 each, you put the extra 50p into the share premium account.

Profit and loss account (verified): no additional notes Partners’ current and capital accounts: no additional notes Sole trader capital: no additional notes Eligible LLP members’ capital: no additional notes (Audited) reserves: these are past earnings that the applicant firm

has retained, as verified by its auditors. For firms not required to appoint an auditor for their accounts under the Companies Act 2006,


https://www.handbook.fca.org.uk/handbook/glossary/?starts-with=P

http://www.fca.org.uk/firms/being-regulated/waiver/crr-permission-application-guidelines

http://www.fca.org.uk/firms/being-regulated/waiver/crr-permission-application-guidelines


these will be unaudited. If you fall into prudential category of IPRU (INV) Chapter 9 retained earnings must be verified by its auditors.

Subordinated loans: these are loans that rank below other unsubordinated debt in the queue for repayment if the applicant firm is wound up. They can only count as part of its capital if they satisfy the conditions laid out in the relevant prudential rules in the Handbook (such as in GENPRU 2.2 or in IPRU(INV)). We require more details about subordinated loans in Question 2.10.

Approved bank bonds: no additional notes Approved undertakings: no additional notes Qualifying property: no additional notes

All firms

2.9 What type of firm is the applicant firm? Limited companyCompanies House Form SH01 specifies how the applicant firm's shares are allotted.

PartnershipYou need to send us a statement of personal assets and liabilities for each partner. You also need to send us a statement of business assets and liabilities for each partner. The statement of assets and liabilities should detail all assets (ie anything with a positive value including money, property and investments) and all liabilities (anything with a negative value) (see page 14-15).

Where assets are included in the applicant firm's financial resources and they are subject to depreciation, you should take this into account when calculating the value of those assets.

Limited Liability Partnership (LLP)An LLP is a vehicle incorporated under the Limited Liability Partnership Act 2000, which limits the liability of each of the partners to their respective capital contributions.

You must send a copy of the members' capital agreement with this form. For an example of a members’ capital agreement, please see page 16.

Sole traderYou need to send us a statement of your personal assets and liabilities, together with a statement of your business assets and liabilities. The statement of assets and liabilities should detail all assets (ie anything with a positive value including money, property and investments) and all liabilities (anything with a negative value) (see page 16-17).

Where assets are included in the applicant firm's financial resources and they are subject to depreciation, you should take this into account when calculating the value of those assets.



Statements of assets and liabilities – for completion by partnerships and sole traders

Before completing the statement of personal assets and liabilities or the statement of business assets and liabilities please note the points below.

Only include your share of any assets and liabilities that are jointly owned by another party, such as your wife/husband.

Current market value (not the price paid or nominal value) of quoted investments – only include readily realisable securities, unit trusts and other packaged products.

Where applicable current market value (eg property) should be estimated.

Guarantees – include the maximum liability of a personal guarantee given to a third party.



STATEMENT OF PERSONAL ASSETS AND LIABILITIES

For (full personal name)

as at ____________________________ (date)

Assets Liabilities

House ______ Mortgage(s) _______

Other real property _______ Loan(s) _______

Contents _______ _______

Motor vehicles _______ _______

Investments (specify) _______ _______

Bank balance(s) _______ Overdraft(s) _______

Cash deposits _______ Credit card balance(s)

_______

Other assets (specify) _______ Other liabilities (specify)

_______

TOTAL ======= TOTAL =======

Guarantees (specify)

_______

TOTAL =======

Signed

Date

STATEMENT OF BUSINESS ASSETS AND LIABILITIES



For (full trading name)

as at (date)

Assets Liabilities

Bank/cash deposits

__________ Taxation ___________

Commission due within 90 days

__________ Credit cards ___________

Other investments

__________ Bank overdraft balance

___________

Property __________ Indemnity commission

___________

Motor vehicles __________ Unsecured loans ___________

Office equipment __________ Hire purchase/secured loans

___________

__________ Other liabilities (please specify)

___________

Other assets (specify)

__________ Mortgage ___________

Contingent liabilities

___________

Guarantees ___________

TOTAL ========= TOTAL ==========

Goodwill __________ Bank overdraft limit

___________

TOTAL ==========

Signed

Date



Members’ Capital Agreement

XYZ LLP

EXAMPLE OF A MEMBERS' CAPITAL AGREEMENT

IPRU (INV) sets out the financial resources requirements. XYZ LLP will meet these requirements as the Members of the LLP will

transfer into the LLP the following assets as long-term capital:

£

Cash

Other assets (list)

……….

TOTAL INITIAL CAPITAL

……….

We confirm that this initial capital is intended as long-term capital (ie not to be withdrawn within two years).

We also confirm that the value of the other assets (listed above) is not less than the market value of those assets.

Signed by the Members:

………………………………………

………………………………………

………………………………………

………………………………………

Date …………………………



Subordinated loans

2.10 Does the applicant firm have any subordinated loans?A subordinated loan is a loan that ranks below other unsubordinated debt in the queue for repayment should the applicant firm be wound up.

The financial resources requirements permit certain types of borrowings or facilities to be treated as part of a firm's capital resources. The most common example is that of a subordinated loan.

For subordinated loan agreement forms other than IFPRU or BIPRU see IPRU(INV) Annex D Requirement Forms.

Other funding

2.11 Does the applicant firm have other sources of external funding?This could include any additional sources of borrowed fund including other loans, line of credit, etc. Please refer to Article 2(d) of the ESMA MiFID Authorisations RTS.

Prudential sub-category

2.12 Is the applicant firm a Personal Investment Firm?No additional notes

2.13 Which prudential sub-category applies to the applicant firm?

Section ASome investment firms can comply with the FCA rules that implement CRD III (eg BIPRU, GENPRU) and be classified as a BIPRU firm, rather than the stricter CRD IV rules, and be subject to IFPRU. Whether or not a firm qualifies depends on which investment services and activities it carries out.

Such a firm cannot carry out any of the following MiFID investment services and activities:

(3) dealing on own account (6) underwriting of financial instruments and/or placing of financial

instruments on a firm commitment basis (7) placing of financial instruments without a firm commitment basis (8) operation of Multilateral Trading Facilities (9) operation of Organised Trading Facilities

Also, a firm cannot: carry out MiFID ancillary service (1) safekeeping and administration of

financial instruments for the account of clients, including custodianship and related services such as cash/collateral management, or

be permitted to hold money or securities belonging to their client.

As referred to above under section 1, for information about how MiFID investment services and activities correspond with the regulated activities set out in the Regulated Activities Order, please refer to PERG 13 in the FCA



Handbook together with the MiFID II CPs, including CP 16/29: II (https://www.fca.org.uk/publications/consultation-papers/cp16-29-mifid-ii-implementation ).

If you are a BIPRU firm (other than an exempt BIPRU commodities firm), you are subject to base capital resources requirement of €50,000 (see GENPRU 2.1.48R) and for the calculation of the variable capital requirement for a BIPRU firm (see GENPRU 2.1.45R).

Section B

Base Capital Resources Requirement

€50K an IFPRU 50K firm: is not authorised to deal for own account in, or

underwrite issues of financial instruments on a firm commitment basis

offers one or more of the following services: o reception and transmission of orders, or o execution of orders, or o management of individual portfolios of

investments, does not hold client money and/or securities and is not

authorised to do so, and is not a UCITS investment firm, and

does not operate a multilateral trading facility.

€125K an IFPRU 125K firm: is not authorised to deal for own account in, or

underwrite issues of, financial instruments on a firm commitment basis,

offers one or more of the following services: o reception and transmission of orders, oro execution of orders, oro management of individual portfolios of

investments, can hold client money or securities, or is authorised to do

so, and is not a UCITS investment firm, and does not operate a multilateral trading facility.

€730K an IFPRU 730K firm is an investment firm subject to the recast CAD but is not an IFPRU 50K firm, an IFPRU 125K firm or a UCITS investment firm.

For further information, see PERG 13.6, questions 60-62 (http://www.fshandbook.info/FS/html/FCA/PERG/13).

Capital Resources RequirementIFPRU Investment firms (other than exempt IFPRU commodities firms, should refer to Part Three Title 1 of CRR.


http://www.fshandbook.info/FS/html/FCA/PERG/13

https://www.fca.org.uk/publications/consultation-papers/cp16-29-mifid-ii-implementation

https://www.fca.org.uk/publications/consultation-papers/cp16-29-mifid-ii-implementation


Please also refer to PERG 13.6 Q64-66 (http://www.fshandbook.info/FS/html/FCA/PERG/13).

Section B – MiFID firms not generally subject to GENPRU, IFPRU or BIPRU

Section CExempt CAD firmFor guidance for exempt CAD firms, see PERG 13, Q58 and 59 (http://www.fshandbook.info/FS/html/FCA/PERG/13). See Chapters 1 and 9 IPRU(INV) for the prudential requirements for exempt CAD firms.

Exempt CAD firms that also conduct other non-MiFID scope activities that are within the scope of FCA regulation will still need to meet the financial resource requirments of other applicable chapters of IPRU(INV) that appropriately reflect their non-MiFID business, (eg IPRU(INV) 5).

Exempt BIPRU commodities firm/Exempt IFPRU commodities firms

An exempt commodities firm should refer to article 498 of the CRR (applicable to investment firms to which the CRR/CRD apply) or Transitional Provision 15 to the BIPRU rules for investment firms (applicable to investment firms which are exempt from the CRR/CRD and apply CRD III) in the FCA Handbook which sets out the rules that apply to such firms: www.fshandbook.info/FS/html/FCA/BIPRU/TP/15 . See also, PERG 13, Q57 www.fshandbook.info/FS/html/FCA/PERG/13 and IPRU(INV) Chapter 3.

Personal Investment Firm

2.14 You must select the prudential category or categories that apply to each type of business. The prudential category determines how much capital the applicant firm will need to hold.We differentiate between our financial requirements by putting applicant firms in different prudential categories. The applicant firm will fall into at least one prudential category. And it may fall into more than one prudential category, depending on its proposed regulated activities.

Prudential category: Personal investment firmPrudential sub-category: B3 Firm with managing permissions

Main regulated activities: a) managing investments in respect of portfolios containing only life policies or to delegate such activity to an investment firm,b) arranging transactions in life policies and other

insurance contracts,c) advising on investments, andd) receiving and transmitting, on behalf of investors

orders in relation to securities and units in collective investment schemes.

Requirement: Not to hold or control client money.



http://www.fshandbook.info/FS/html/FCA/BIPRU/TP/15




Prudential Rules: From June 2016, a Category B3 firm’s capital resources must, at all times, be the greater of £15,000 or 10% of the investment business annual income from June 2016. It then increases from 30 June 2017 to the greater of £20,000 or 10% of the investment business annual income plus the minimum capital requirement calculated under MIPRU (but ignoring the minimum amount that are specified in MIPRU for the particular activity).

(Capital resources must be calculated in line with IPRU(INV) table 13.15.3(1)).

Please refer to IPRU(INV) 13 for further details.

Prudential category: Personal investment firmPrudential sub-category: B3 Firm without managing permission

Main regulated activities: a) arranging transactions in life policies and other insurance contracts,b) advising on investments, andc) receiving and transmitting, on behalf of investors

orders in relation to securities and units in collective investment schemes.


Prudential Rules: From June 2016, category B3 firm’s capital resources must, at all times, be the greater of £15,000 or 5% of the investment business annual income. It then increases from June 2017, to the greater of £20,000 or 5% of the investment business annual income.

(capital resources must be calculated in line with IPRU(INV) table 13.15.3(1))

Please refer to IPRU(INV) 13 for further details.

Prudential category: Personal investment firm

Prudential sub-category: Exempt CAD firm. See guidance in Q58 and 59 of our PERG 13: www.fshandbook.info/FS/html/FCA/PERG/13.

Main regulated activities: a firm as defined in article 4(1)(2)(c) of the EU CRR that is authorised to provide only one of more of the following investment services:

a) investment advice, and/or;

b) receive and transmit orders from investors as referred to in Section A of Annex I of MiFID).


Prudential Rules: An exempt CAD firm’s financial resources requirement is the higher of:

the requirement that is applied by IPRU (INV) section 13.1A, or

the requirement that is applied by IPRU (INV) sections 13.13 to 13.14.

Please refer to IPRU (INV) 13.1A for further details.




Home finance mediation firm category

Prudential category: Home finance intermediary that does not hold client money

Main regulated activities: a) advising on regulated mortgage contractsb) arranging (bringing about) regulated mortgage

contractsc) making arrangements with a view to regulated

mortgage contracts, and/or

d) advising on a home reversion plan,

e) arranging (bringing about) a home reversion plan

f) making arrangements with a view to a home reversion plan, and/or

g) advising on a home purchase plan

h) arranging (bringing about) a home purchase plan

i) making arrangements with a view to a home purchase plan,

and/or

j) advising on a regulated sale and rent back agreement

k) arranging (bringing about) a regulated sale and rent back agreement,

l) making arrangements with a view to a regulated sale and rent back agreement.


Prudential Rule: Maintain net assets, the greater of:• £5,000,or• 2.5% of its annual net brokerage income if not holding

client money.Please refer to MIPRU 4 for further details.

Prudential category: Home finance intermediary that does hold client money

Main regulated activities: a) advising on regulated mortgage contractsb) arranging (bringing about) regulated mortgage

contractsc) making arrangements with a view to regulated

mortgage contracts, and/or

d) advising on a home reversion plan,

e) arranging (bringing about) a home reversion plan

f) making arrangements with a view to a home reversion plan,

and/or

g) advising on a home purchase plan

h) arranging (bringing about) a home purchase plan



i) making arrangements with a view to a home purchase plan,

and/or

j) advising on a regulated sale and rent back agreement

k) arranging (bringing about) a regulated sale and rent back agreement, and/or

l) making arrangements with a view to a regulated sale and rent back agreement.

Prudential Rule: Maintain net assets, the greater of:• £10,000, or• 5% of its annual net brokerage income.

Please refer to MIPRU 4 for further details.

Non-investment insurance contract firm categories

Prudential category: Insurance intermediary

Prudential sub-category: not applicable

Main regulated activities: a) advising on investments in relation to non-investment insurance contracts

b) arranging (bringing about) deals in investments in relation to non-investment insurance contracts

c) making arrangements with a view to transactions in investments in relation to non-investment insurance contracts

d) dealing as agent in non-investment insurance contracts, and/or

e) assisting in the administration and performance of a non-investment insurance contract.


Prudential Rule: Maintain net assets, the greater of:• £5,000, or• 2.5% of its annual net brokerage income if not holding

client money or other client assets.Please refer to MIPRU 4 for further details.

Prudential category: Insurance intermediary (that holds client money for its non-investment insurance business only)

Prudential sub-category: not applicable

Main regulated activities: a) advising on investments in relation to non-investment insurance contracts,

b) arranging (bringing about) deals in investments in relation to non-investment insurance contracts

c) making arrangements with a view to transactions in investments in relation to non-investment insurance contracts

d) dealing as agent in non-investment insurance contracts, and/or



e) assisting in the administration and performance of a non-investment insurance contract.

Requirement: None

Prudential Rule: Maintain capital resources, the greater of:• £10,000, or• 5% of its annual net brokerage income if holding

client money or other client assets.

There is a capital requirement for insurance intermediaries wishing to segregate retail client money into a non-statutory trust of £50,000, or, if higher, 5% of the firm's annual income from regulated activities. Please see Chapter 5 of the Client Asset sourcebook (CASS) for further details.

2.15 What is the applicant firm’s resource requirement?Requirements for prudential categoriesThe capital requirements for each prudential category are contained in the Interim Prudential sourcebook for Investment Businesses (see IPRU(INV) 1 and 13) and Prudential sourcebook for Mortgage and Home Finance Firms and Insurance Intermediaries (MIPRU).After identifying the applicant firm's prudential category or categories, you will need to look at the relevant prudential sourcebook for the prudential rules and guidance that apply.It is important you consider the prudential category or categories carefully. The category will determine minimum capital and other risk management standards and aims to ensure the applicant firm can meet its liabilities and commitments at all times.You can use the summary information in the Question with the FCA Handbook to work out which prudential category or categories the applicant firm will fall into.

Help with calculating your capital requirementsWe offer an e-learning package to help small firms calculate their capital requirements. If you would like to find out more information about this, please see our website.

Requirements

2.16 You must confirm that the applicant firm’s current requirements have not changedNo additional notes

Limitations

2.17 You must confirm that the applicant firm’s current limitations have not changedNo additional notes


(NOTES) 3 – Information on shareholders

3 Information on shareholders

3.1 Please confirm that the information that you have previously provided to us is, in accordance with Article 3 (Information on shareholders) and remains true, accurate and up-to-date.If you have already provided us with any of the information specified in the RTS and/or the questions in this form, and if that information remains true, accurate and up-to-date, please confirm that here. As long as that is the case, we do not expect you to provide us with the same information again. Please refer to this declaration in the questions to which it is relevant. Where we do not already have the information, or where we have been provided with information but it is no longer true, accurate and up-to-date, you must provide the information specified.

3.2 Does the applicant firm’s business model include any insurance distribution business ?No additional notes

3.3 You must provide the following information for any individual(s) who have a shareholding in the intermediary (shares and voting rights) exceeding 10%.No additional notes.

3.4 You must provide the following information for any firm(s) who have a shareholding in the intermediary (shares and voting rights) exceeding 10%. No additional notes.

ControllersThis information helps us to understand who controls/owns the applicant firm and the relationships the firm might have with other individuals or entities. In a majority of firms the controllers will be the firm's own directors or partners if they own the shares and voting rights. All directors and partners are required to complete a Form A 'Application to perform controlled functions including senior management functions ' and therefore further controller forms are not required as part of the application.

The definition of a controller is set out in the glossary section of the Handbook: https://www.handbook.fca.org.uk/handbook/glossary/?starts-with=C

3.5 Are the applicant's controllers the same as the controllers of the firm?No additional notes

3.6 Will they continue to have the same controlling interest in the applicant? No additional notes


https://www.handbook.fca.org.uk/handbook/glossary/?starts-with=C



3.7 You must list below all the controllers of the applicant firm and state the following:

the percentage interest they control in the applicant firm; whether they are a partner of director; and whether they are a new controller as a result of the change of legal

status.

No additional notes

3.8 Will the applicant firm have any new controllers?

No additional notes

3.9/3.10This Section helps us to understand who owns the applicant firm and has control or influence over its business.A person must be approved by the FCA before they can become a controller of an authorised firm. The controllers of an applicant firm include the ultimate beneficial owners, who may be individuals or firms with an indirect shareholding in the applicant firm – for example, through their controlling interest in a parent of the applicant firm. You must provide the information we ask for in the spaces provided or provide a structure chart so we can determine who the applicant firm's controllers are. The controller(s) will need to complete the appropriate Appendix providing their details. This is a requirement of the Act (Part XII Control over authorised persons).Chapter 11 of the Supervision manual (SUP) in the Handbook gives further information about controllers (www.handbook.fca.org.uk/handbook/SUP/). In particular, SUP 11.3 sets out the information which a controller or proposed controller must provide to us before becoming a controller.For these purposes, a controller is, broadly speaking, an individual or firm that:

(1) holds 10% or more (20% or more for insurance and mortgage intermediaries) of the shares in the applicant firm or its parent, or(2) is able to exercise significant influence over the management of the

applicant firm through a controlling interest in the applicant firm or its parent, or

(3) is entitled to control or exercise control of 10% or more (20% or more for insurance and mortgage intermediaries) of the voting power in the applicant firm or its parent, or

(4) is able to exercise significant influence over the management of the applicant firm through their voting power in it or its parent

Controllers of Partnerships(1) Partnership applicants should note that some (or sometimes all)

individual partners may be controllers of the partnership. This usually depends on the number of partners and the terms of the partnership agreement, especially regarding voting power or significant influence. For example, in a five-person partnership where each partner has equal voting power, each partner will have 20% of the voting power and so will be a controller.

(2) In a five-person partnership where two senior partners each have 40% of the voting power (and the same level of significant influence) and the remaining 20% is equally split between the other three partners (meaning that each of them has less than 10% of the voting


http://www.handbook.fca.org.uk/handbook/SUP/


power and significant influence), only the two senior partners would be deemed controllers.

(3) In a ten-person partnership where each partner has equal voting power, each partner will have 10% of the voting power and will be a controller.

(4) In an eleven-person partnership where all have equal voting power it might appear that none of the partners will be a controller (as no individual partner will have 10% or more of the voting power). However, one of the partners can still exercise significant influence. For example, if the partnership agreement requires significant decisions to be taken unanimously by the partners, a dissenting partner could exercise significant influence over the firm's management despite having less than 10% of the voting power. Applicant firms should have this in mind when considering whether a partner with less than 10% voting power could exercise significant influence over the firm's management.

This information will probably be set out in the applicant firm’s partnership agreement.

Controller forms

3.11 If the applicant firm has any new controllers you must submit with this applicant the appropriate controller forms for each of its new controllers. These forms can be found on the FCA website at the following the link: https://www.fca.org.uk/firms/authorisation/how-to-apply/financial-services/controller-forms Where a partnership is also a legal person, a Legal Person controllers form should be provided in respect of the partnership together with controller forms for each of the controlling partners. Please note that where the Article 10a(8) RTS requires information on criminal investigations and proceedings, we only expect you to submit information in relation to on-going criminal investigations and proceedings as indicated in the controller forms.In addition, where as a result of the Article 10a(8) RTS an applicant is required to provide information relating to criminal records of members of the management body of a legal person, we do not expect information about spent convictions to be provided in relation to those particular individuals. This is subject to where a member of the management body is themselves a controller, in which case they must provide all the information specified in the relevant controller form. The Article 10a(8) RTS also requires controllers to provide declarations of honour in relation to on-going criminal investigations (Article 4(a)(1) and Article 5(1)(a)(1)). We consider that the declaration at the end of the controller forms will satisfy this requirement.

You do not need to submit a natural person’s controller form for any individual controller who has also submitted a Form A to hold a senior management function with the applicant firm.Definitions of the following terms can be found in the Handbook Glossary https://www.handbook.fca.org.uk/handbook/glossary :-

controller control control function shares voting power aggregation of shares and acting in concert guidance


https://www.handbook.fca.org.uk/handbook/glossary

https://www.fca.org.uk/firms/authorisation/how-to-apply/financial-services/controller-forms

https://www.fca.org.uk/firms/authorisation/how-to-apply/financial-services/controller-forms


parent undertaking firm regulatory body

Close links 3.12 Are the applicant's close links unchanged and will they continue to

allow the FCA to supervise the applicant effectively?We need to know about other firms or individuals the applicant may have close links with - whether directly, or through a parent undertaking or through a subsidiary. This is so we can be satisfied we can supervise the applicant effectively.

Handbook, in particular COND 2.3.7G https://www.handbook.fca.org.uk/handbook/COND/2 and Section 3.2 (Close links) in the Owners and Influencers Appendix to this application pack provides further information about close links.

The definition of a close link is set out in the glossary section of the Handbook: https://www.handbook.fca.org.uk/handbook/glossary/?starts-with=C

3.13 You must provide a structure chart to show the nature of the relationship between the applicant firm

and each close link the business type of the close link).

You must notify us about any other firms or individuals that an applicant firm may have close links with – whether directly, or through a parent or a subsidiary – so we can be sure that we can supervise the applicant firm effectively. You will find below:

a diagram (1) which sets out the types of relationships between firms and individuals that we consider to be close links, and

a flowchart (2) which will help you in deciding if the applicant firm has close links




https://www.handbook.fca.org.uk/handbook/COND/2


(1)


Firm A (Parent)

Applicant firm

Firm B (Subsidiary)

(a) Firm A is theparent of the applicantfirm

(d) Firm B is asubsidiary offirm A, theparent of theapplicant firm

da

Applicant firm Firm C (Parent)

Firm D(Subsidiary)

(b) Firm D is asubsidiary of theapplicant firm

(c) Firm C is theparent of asubsidiary, Firm D.Firm D is asubsidiary of theapplicant firm

Firm E (Controller ofthe applicant firm)

Applicant firm(Controller of Firm F)

Firm F

20% or more

e

20% or more

f

b c

(e) Firm E owns orcontrols 20% ormore of the votingpower or capital ofthe Applicant firm(i.e. is a controllerof applicant firm;and/or

(f) the applicantfirm owns orcontrols 20% ormore of the votingpower or capital offirm F


(2)

For further guidance on close links please see:SUP 11 https://www.handbook.fca.org.uk/handbook/SUP/11 , and Handbook Glossary https://www.handbook.fca.org.uk/handbook/glossary

Overlap between controllers and close linksThere is often an overlap between an applicant firm's controllers and its close links. For example, an organisation that owns 20% of the voting power or capital of the applicant firm is both a controller and a close link. If you are asked to provide a structure chart for both controllers and close links, you can provide both in a single structure chart, but it must fully comply with the requirements of Article 3(c) of the RTS in respect of any corporate controllers.



https://www.handbook.fca.org.uk/handbook/SUP/11


The structure chart should clearly show:

(i) Name(s) of the close link(s). (ii) Address(es) of the close link(s). (iii) Category of each close link – a, b, c, d, e or f (please see diagram

(1) above). (iv) Details of any regulatory body that regulates each close link.

Please include the address, telephone number, email address and a contact name at the regulator. (If a close link is regulated by us, please provide the firm’s reference number wherever possible.)

Please note you will need to complete the appropriate Controller Appendix (see Question 3.11 of this form) for any close links falling into category e (please see diagram (1)).

3.14 Are you aware of any information to suggest that any close link is likely to prevent our effective supervision of the applicant firm?Possible examples of the kind of issues that might impinge on our effective supervision include anything that might:

affect the applicant firm’s ability to provide adequate information to us at any time,

hinder the flow of information from the applicant firm or the applicant firm's close link(s) to us at any time, or

prevent us from being able to assess the overall financial position of the applicant firm or their close link(s) at any time

Please consider in particular if such issues may arise because the close link is subject to the laws of a state outside the EEA.

Third country banking/investment groupThe information required under Questions 3.15 to 3.20 will enable us to fulfil our obligations made under Article 10 of the RTS to effectively exercise our supervisory function. This information is also relevant for prudential purposes so we can assess the liabilities of the whole group that the applicant firms may be affected by.

3.15 Is the applicant firm applying to be a BIPRU or an IFPRU firm? For glossary definitions please see:https://www.handbook.fca.org.uk/handbook/glossary

3.16 Is the applicant firm a member of a third country banking and investment group?A third-country banking and investment group is a group headed by a bank, asset management company, investment firm or financial holding company outside the EEA and not part of a wider EEA banking/ investment group.

Financial conglomerates

3.17 Is the applicant firm a member of a group?Broadly speaking, an applicant firm is part of group if it is:

a parent company a subsidiary company




a subsidiary company of a parent company, or a parent company of a subsidiary company

In relation to consolidated financial supervision and financial conglomerates, please note the guidance in the FCA Handbook under SUP 11.5.4 and 11.5.4A (https://www.handbook.fca.org.uk/handbook/SUP/11/5.html ).

3.18 For the activities of the controller, or the group the controller is part of, is the controller or any firm in the group (as defined in paragraph 5 of schedule 3 to FSMA) an EEA investment firm, an EEA credit institution, an EEA insurance undertaking, an EEA management company, an EEA regulated market or the parent of any such firm?The ‘Classification of groups’ form can be found at: https://www.handbook.fca.org.uk/handbook/GENPRU/3/Annex3.html. See, generally, Schedule 3 paragraph 5 FSMA as regards an EEA investment firm, an EEA credit institution, an EEA insurance undertaking or an EEA management company, for these purposes.

3.19 Is the applicant firm a member of a financial conglomerate?In relation to consolidated financial supervision and financial conglomerates, please see the guidance in the FCA Handbook under SUP 11.5.4 and 11.5.4A (https://www.handbook.fca.org.uk/handbook/SUP/11/5.html ). The FCA Handbook Glossary definition of a ‘financial conglomerate’ refers to a decision tree in GENPRU 3 Annex 4, which will help you determine whether the applicant firm is a member of a financial conglomerate: https://www.handbook.fca.org.uk/handbook/GENPRU/3/Annex4.html

3.20 Is the applicant firm a member of a third country financial conglomerate?A third-country financial conglomerate is a financial conglomerate headed by a regulated entity or a mixed financial holding company that has its head office outside the EEA. The questionnaire in GENPRU 3 Annex 3 and its explanatory notes will help you to assess this: https://www.handbook.fca.org.uk/handbook/GENPRU/3/Annex3


https://www.handbook.fca.org.uk/handbook/GENPRU/3/Annex3

https://www.handbook.fca.org.uk/handbook/GENPRU/3/Annex4.html%20

https://www.handbook.fca.org.uk/handbook/SUP/11/5.html

https://www.handbook.fca.org.uk/handbook/GENPRU/3/Annex3.html

https://www.handbook.fca.org.uk/handbook/SUP/11/5.html

(NOTES) – 4 Information on the management body and persons who direct the business

4 Information on the management body and persons who direct the business

Section 4 and the Form As enable us to receive both the information required to perform our role in respect of senior management functions under the domestic senior management regime contained in Part V of FSMA and the information required to carry out the assessment of the management body under MiFID.

Firms must provide a general list of the individuals who will perform senior management functions plus the information specified in Article 4(b) of the RTS in section 4 of the MiFID Annex. They must provide us with the detailed information about these individuals, as required for our senior management regime, through the Form As.

To avoid duplication, the same Form As are to be used to provide us with the same information about the same individuals that is required under Article 4 of the RTS (ie information in respect of persons performing senior management functions who will also be members of the management body).

We have outlined below an indicative list (but not exhaustive) of those persons performing senior management functions who might be considered as members of the management body and/or those of persons who effectively direct the business of the firm for the purpose of the MiFID II requirements:

SMF1 Chief Executive SMF2 Chief Finance SMF3 Executive Director SMF4 Chief Risk Officer SMF7 Group Entity Senior Manager SMF9 Chair SMF10 Chair of the Risk Committee SMF11 Chair of the Audit Committee SMF12 Chair of the Remuneration Committee SMF13 Chair of the Nomination Committee SMF14 Senior Independent Director SMF21 EEA Branch Senior Management Function SMF24 Chief Operating Officer SMF27 Partner

Applicants will note that the form at Annex II of the ITS requires them to provide us with similar information to the information specified in Article 4 of the RTS and our Form As. To save further duplication, firms should answer the relevant sections of the form at Annex II of the ITS with reference to the same Form As.

Applicants will note that the form at Annex II of the ITS requires them to provide us with similar information to the information specified in Article 4 of the RTS and our Form As. To save further duplication, firms should answer


(NOTES) – 4 Information on the management body and persons who direct the business

the relevant sections of the form at Annex II of the ITS with reference to the same Form As.

See CP 16/29 and Chapter 6 of the MiFID II Application and Notification user guide for further details.

4.1 Please confirm that the information that you have previously provided to us is, in accordance with Article 4 (Information on the management body and persons who direct the business) and remains true, accurate and up-to-date.If you have already provided us with any of the information specified in the RTS and/or the questions in this form, and if that information remains true, accurate and up-to-date, please confirm that here. As long as that is the case, we do not expect you to provide us with the same information again. Please refer to this declaration in the questions to which it is relevant. Where we do not already have the information, or where we have been provided with information but it is no longer true, accurate and up-to-date, you must provide the information specified.

Senior management functions

4.2 You must complete Table 1Table 1 in this application allows you to map the individuals performing senior management functions for the firm to the equivalent senior management functions that they will perform for the applicant.You must complete Table 1 to include every individual who performs senior management functions for the firm.

4.3 Is the applicant seeking approval for any new individuals to perform one or more senior management functions?For each new individual listed in Table 1 you must fill in ‘Form A – Application to perform controlled functions including senior management functions’. This form is on our website https://www.handbook.fca.org.uk/handbook/SUP/10AC/ (Annex 3D)Firms changing from a sole trader to any other legal status, who are also general insurance or home financial intermediaries, should answer ‘Yes’ to 4.2 and provide a senior management function form for any directors or partners.

4.4 You must fill in a ‘Form A - Application to perform controlled functions including senior management functions’ for each new person who will be performing a senior management function. This can be found on the website, see https://www.handbook.fca.org.uk/form/sup/SUP_10C_Ann_3D_Solo_Long_Form_A_20191209.pdf

You must also provide a Senior Management Regime: Statement of Responsibilities (https://www.handbook.fca.org.uk/form/sup/SUP_10C_ann_5D_SOR_20160307.pdf ) with each Form A and attach it to your application in Connect No additional notes


https://www.handbook.fca.org.uk/form/sup/SUP_10C_ann_5D_SOR_20160307.pdf

https://www.handbook.fca.org.uk/form/sup/SUP_10C_ann_5D_SOR_20160307.pdf

https://www.handbook.fca.org.uk/form/sup/SUP_10C_Ann_3D_Solo_Long_Form_A_20191209.pdf

https://www.handbook.fca.org.uk/form/sup/SUP_10C_Ann_3D_Solo_Long_Form_A_20191209.pdf

https://www.handbook.fca.org.uk/handbook/SUP/10C/

(NOTES) – 5 Financial information

5 Financial information

5.1 Please confirm that the information that you have previously provided to us is, in accordance with Article 5 (Financial information) and remains true, accurate and up-to-date. If you have already provided us with any of the information specified in the RTS and/or the questions in this form, and if that information remains true, accurate and up-to-date, please confirm that here. As long as that is the case, we do not expect you to provide us with the same information again. Please refer to this declaration in the questions to which it is relevant. Where we do not already have the information, or where we have been provided with information but it is no longer true, accurate and up-to-date, you must provide the information specified.

5.2 All applicant firms must provide the following: A forecast balance sheet for the first 3 business years A forecast monthly profit and loss accounts for the first year and then

a year end account for years 2 and 3 business years A monthly cash flow forecast for first business year and then a year

end cash flow forecast for years 2 and 3 business years. Monthly calculation of the applicant firm’s financial resources/capital

resources against its financial resources/capital resources requirement, demonstrating how the former meets the latter, projected over a one year period after authorisation.

See Article 5(a)(i) and 5(a)(iii) of the RTS

Liquidity

5.3 Is the applicant firm an IFPRU or BIPRU investment firm?The applicant firm has to confirm that it has the proper arrangements in place to comply with the liquidity requirements under BIPRU 12.1 to BIPRU 12.4 if applicable. We may also require further information on your liquidity arrangements to progress the application. For glossary definitions please see https://www.handbook.fca.org.uk/handbook/glossary

Information on the group of the applicant firmThe information required under questions 5.4 to 5.8 will enable us to determine whether the applicant firm will have to provide the information required under Article 5 of the RTS on a consolidated and sub-consolidated basis. See Article 5(c) of the RTS.

5.4 Is the applicant firm part of a group? Broadly speaking, an applicant firm is part of a group if it is:

a parent company; a subsidiary company; a subsidiary company of a parent company; or




a parent company of a subsidiary company.In relation to consolidated financial supervision and financial conglomerates, please note the guidance in the Handbook under SUP 11.5.4 and 11.5.4A.

5.5 Is any firm in the group subject to regulation by another competent authority?No additional notes.

5.6 For the activities of the group the applicant firm is part of, is any firm in the group (as defined in paragraph 5 of schedule 3 of FSMA) an EEA investment firm, an EEA credit institution, an EEA insurance undertaking, an EEA management company or the parent of any such firm? No additional notes.

5.7 Please identify which competent authority will be the consolidated supervisory after authorisationNo additional notes.

5.8 Please complete and attach the Consolidation Group FormNo additional notes.

Planning assumptions5.9 You must give details on the following

You must provide the information detailed in question 5.9 that is applicable to the applicant firm in order to explain the firm’s planning assumptions, as required by Article 5(a)(ii) of the RTS.

5.10 Is the applicant firm currently trading?If the applicant firm is currently trading you must provide all the information detailed in question 5.10 and where applicable at consolidated and sub- consolidated level. If the applicant firm did not have a requirement to produce audited annual reports please provide the firm’s unaudited annual reports. See Article 5(b) of the RTS.

ICAAP 5.11 Is the applicant firm an IFPRU or BIPRU investment firm?

This information will enable us to assess the appropriateness of the financial resources of the applicant firm. You are not required to send your ICAAP documentation with this application, unless the applicant firm is an IFPRU 730k firm, but you must be able to produce a copy, if we ask you to, at any time while we are assessing the application or in the future.

The Pillar 2 FCA Handbook chapters: GENPRU 1.2 BIPRU 2.2 IFPRU 2

ILAA

5.12 Is the applicant firm an ILAS BIPRU firm?We may need to ask this information in order to assess the appropriateness of the financial resources of the applicant firm.



You are not required to send your ILAA documentation with this application but you must be able to produce a copy, if we ask you to, at any time while we are assessing the application or in the future.

Please refer to BIPRU 12.5.

ILAS BIPRU firms meeting the conditions in BIPRU 12.6.6R to BIPRU 12.6.8R and which have obtained a simplified ILAS waiver are allowed to carry out an Individual Liquidity Systems Assessment in accordance with BIPRU 12.6.

ILAS BIPRU firms meeting the conditions in BIPRU 12.6.6R to BIPRU 12.6.8R and which have obtained a simplified ILAS waiver are allowed to carry out an Individual Liquidity Systems Assessment in accordance with BIPRU 12.6.


(NOTES) – 6 Information on the organisation of the firm

6 Information on the organisation of the firmPlease note that Article 7 of the RTS specifies that the information subject to the RTS should refer to both the head office of the firm and its branches and tied agents, in respect of Article 6.

6.1 Please confirm that the information that you have previously provided to us is, in accordance with Article 6 (Information on the organisation of the firm) and remains true, accurate and up-to-date.If you have already provided us with any of the information specified in the RTS and/or the questions in this form, and if that information remains true, accurate and up-to-date, please confirm that here. As long as that is the case, we do not expect you to provide us with the same information again. Please refer to this declaration in the questions to which it is relevant. Where we do not already have the information, or where we have been provided with information but it is no longer true, accurate and up-to-date, you must provide the information specified.

Passporting 6.2 Does the firm have any passports to provide services into other EEA

state?No additional notes

6.3 Does the applicant wish to exercise its passport rights?Can the firm start business in the EEA immediately?Once the firm has changed its legal status the FCA will notify the relevant EEA regulator of this changes and the firm will be able to commence cross-border services immediately under the Markets in Financial Instruments Directive (‘MiFID’).In respect of the Insurance Distribution Directive (‘IDD’), we will, upon notification, ask the relevant host state regulator whether the firm is able to continue business seamlessly or will be required to wait one month as per article 6 of IDD. We will inform the firm accordingly.If the firm has a branch established in another EEA state, again, we will enquire as to whether the firm is able to seamlessly carry out business at the time of the changes, or will be required to make a new branch notification. FCA will endeavour to communicate this to the relevant host state regulator. The decision as to whether a new notification is required ultimately rests with the EEA regulators concerned. More information on passporting arrangements can be found on our website.

IT systems

6.4 Will the applicant continue to use the firm's existing IT systems and controls (eg systems include transaction recording, accounting systems, internal controls and transaction reporting)?Transaction reporting only applies if the applicant is either dealing as principal or agent in any investment for third parties or dealing in investments on its own account. Please note that if the existing systems are being upgraded in any way including a bespoke element, you must provide details in question 6.4.



6.5 Please explain how the applicant's system(s) will be different and provide a brief explanation of the systems and controls the applicant intends to put in place.If the applicant will be carrying on regulated activities that are reliant upon technology that is bespoke or complex systems, we may require further information.



Compliance procedures and compliance monitoring programme

6.6 You must confirm the applicant has documented compliance procedures and a compliance monitoring programme in place.When assessing this application we need to be satisfied the applicant firm has the appropriate compliance arrangements in place to meet its regulatory obligations, both when we authorise it and on an ongoing basis.You should not send the compliance procedures or the compliance monitoring programme to us when submitting this application. However, they must be ready for inspection at any time.Remember that this manual should be designed so it is specifically tailored to the business, and is easy to use as well as easy to amend and to keep up-to-date. If you are in any doubt about what you need to put into the compliance manual you should seek professional advice.Common platform firms should, in particular, consider carefully the obligations in SYSC 6.1 (https://www.handbook.fca.org.uk/handbook/SYSC/6/1/.html ).


https://www.handbook.fca.org.uk/handbook/SYSC/6/1/.html

(NOTES) – 7 Application Fee

7 Application fee

For more information on application fees:• see the FCA Handbook –https://www.handbook.fca.org.uk/handbook/FEES/3/ • see our website: www.fca.org.uk • email [email protected]



http://www.fca.org.uk/

https://www.handbook.fca.org.uk/handbook/FEES/3/

(NOTES) – 8 Supporting Documentation

8 Supporting Documentation

No additional notes


(NOTES) – 9 Deed poll and declaration

9 Deed poll and declaration

No additional notes


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