(NOTES) 1 Regulatory business
Please take time to read these notes carefully. They will help you to fill in the supplement form correctly.
When completing the application forms you will need to refer to the Handbook: www.fshandbook.info/FS/index.jsp
If after reading these notes you need more help, please:
 check our website.
 consult the Handbook: www.fshandbook.info/FS/index.jsp
 call our Customer Contact Centre: 0300 500 0597; or
 email the Customer Contact Centre: Firm.Queries@fca.org.uk
These notes, while aiming to help you, do not replace the rules and guidance in the
Handbook.
These 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;
 ‘the FCA' ,'we', ‘us’ or 'our' refers to the Financial Conduct Authority; and
 FSMA refers to the Financial Services and Markets Act 2000.
1 Regulatory business plan
2 Scope of Permission required
3 Financial resources
4 Personnel
5 Compliance arrangements
6 Fees and levies
2
7
14
19
22
24
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(NOTES) 1 Regulatory business plan
1
We need to know about the business the applicant firm intends to carry on so we can ensure it is authorised for the correct regulated activities, investment types and client types and to assess the adequacy of its resources.
We see the applicant firm's description of its proposed business as an important regulatory tool for the applicant firm and us. It helps us measure the applicant firm's business risk and control over any regulatory concerns.
Applicant firms can find further information about this in SYSC 4 -10.
Bearing in mind the threshold conditions, we need to be satisfied the applicant firm can:
• identify all regulated activities and any unregulated activities it intends to carry on;
• identify all the likely business and regulatory risk factors;
• explain how it will monitor and control these risks; and
• take into account any intended future developments.
Please remember that the applicant firm's description of its business is an important part of the overall application and integral to our decision making.
The amount of detail submitted should be proportionate to the nature of the business the applicant firm intends to carry on. For example, a small firm seeking to carry on a business with a risk the applicant firm perceives as low, the description of its business should be less complex and detailed than for a high-risk firm. The level of detail should also be appropriate to the risks to the applicant firm's clients.
You can find further information about our requirements and expectations for business plans at www.fshandbook.info/FS/html/FCA/COND/2/4
Platform charges
Where an applicant firm is a platform service provider, it needs to be able to clearly disclose to the professional client and their retail client the firm’s charging structure and any fees, commissions and consultancy charges received in relation to the provision of its designated investment business.
See COBS6.1E.1R and COBS2.3.1R for further information.
Where platform service providers are concerned, full disclosure of both direct advice and platform fees are fully explained via a durable medium. Applicant firms must make sure that all fees and commissions are disclosed to the adviser and the customer via a durable medium. They must also ensure that all adviser chargers are made available to the customer via a durable medium.
Movement of customer portfolios between platform service providers
Where an applicant firm is a platform service provider, it needs to provide clarification of the movement of ‘in specie’ assets between platforms, see
COBS 6.1G.1R.
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(NOTES) 1 Regulatory business plan
1.1 Please explain why the applicant firm wishes to carry on regulated activities at this time.
No additional notes
1.2
Which of the following will the applicant firm be establishing or managing?
No additional notes
1.3
You must give details of the customer(s) (i.e. funds) the applicant firm intends to act for when managing investments/establishing collective investment schemes.
Where the applicant firm is managing investments for numerous portfolio management customers it is not necessary to give the name of each customer.
Questions 1.4 – 1.15
No additional notes
1.16 Does the applicant firm intend carrying on any other business activities that are unregulated activities?
No additional notes
1.17 Will the applicant firm be carrying on MiFID business?
You can find guidance on whether the applicant firm's proposed business will be Markets in Financial Instruments Directive (MiFID) business in PERG 13: www.fshandbook.info/FS/html/FCA/PERG/13 .
If you will be relying on one of the article 2 exemptions or the article 3 exemption from MiFID you will need to adopt the relevant standard limitation or requirement set out in Section 2 – Scope of Permission.
1.18 Does the applicant firm intend to passport any regulated activities into another EEA state:
 providing cross-border services; and/or
 establishing a branch; and/or
 appointing a tied agent.
If the applicant firm has any plans to carry on business activities in other EEA countries, please note that once authorised it will need to complete:
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(NOTES) 1 Regulatory business plan
• a 'notification of intention to provide cross-border services into another EEA state' form; and/or
• a 'notification of intention to establish a branch in another EEA state' form for a branch.
This must be submitted using our Online Notifications and Applications
(ONA). Please note, if you are an Alternative Investment Fund Management
Directive firm (AIFMD) you should submit a paper form, these forms are available from SUP 13: www.fshandbook.info/FS/html/FCA/SUP/13 .
You may wish to consult our factsheet 'Financial Advisers and Passporting' for further guidance. You can also find further information on our website: www.fca.org.uk/firms/being-regulated/passporting
1.19 What functions (if any) will the applicant firm outsource?
The applicant firm must submit all the information about any arrangements made with third parties in connection with its regulated activities, and explain fully how the activity will be operated. In addition, the applicant firm must demonstrate that sufficient consideration has been given to emergency situations, such as contingency plans.
The applicant firm cannot contract out its regulatory obligations (see COBS).
Points to consider:
(a) why the applicant firm chose this person;
(b) any contingency plan;
(c) reviews of the third parties' performance.
The applicant firm should ensure that arrangements are made with third parties (for example, emergency contact) to safeguard the interests of clients in the event of the absence, illness, disability or death of any key members of staff.
If the applicant firm will be a MiFID investment firm and it is intending to outsource portfolio management services to retail customers to non-EEA
(third country) service providers you must explain how it will comply with
SYSC 8.2.1 (1).
Treating Customers Fairly (TCF) is a regulatory requirement underpinned by some of our Principles, (e.g. Principle 6  a firm must pay due regard to the interests of its customers and treat them fairly). TCF is central to delivering our regulatory agenda as well as being a key part of our move to more principles-based regulation.
Our Treating Customers Fairly (TCF) initiative focuses on the responsibility on a firm's management to deliver and demonstrate fair outcomes for consumers while offering the firm the flexibility to deliver these outcomes.
Our website gives more straightforward easy-to-read information about TCF, including the consumer outcomes we are looking for and information on the latest deadlines and supporting publications. It also has examples of good and poor practice and useful tools.
1.20.1 TCF is a key consideration for all new firms. Please tell us how TCF affected the development of the applicant firm’s business plan?
No additional notes
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(NOTES) 1 Regulatory business plan
1.20.2 How will the applicant firm’s senior management ensure that TCF is embedded in the culture of the firm and that it can demonstrate that the firm is consistently delivering fair outcomes to consumers?
No additional notes
1.20.3 What have the management of the applicant firm identified as the key risks in its model that may impact on its ability to treat customers fairly?
No additional notes
1.21 What arrangements will the applicant firm put in place to safeguard the interests of its customers in the event of the absence, illness, disability or death of any essential member of staff?
We expect applicant firms to have such arrangements in place to meet the threshold condition relating to adequate resources (see COND 2.4), e.g. an applicant firm whose business will involve managing investments with only one person performing the customer function in connection with acting as an investment manager may need to have a locum agreement in place.
We would expect any locum agreement to cover the oversight of the investments of the applicant firm's customer(s) during any period of incapacity of the sole person performing the customer function in connection with acting as an investment manager. This arrangement should be made known to the applicant firm's customer(s), for example, in the terms of business letter or investment management agreement.
1.22 What are the main business risks for the applicant firm and how does it intend to manage those risks?
Here are some examples that should be considered, depending on the nature of the applicant firm’s business:
External risks:
The applicant firm should
 identify competitors and assess their reaction to the applicant firm's presence in the market, if applicable; and
 consider critical economic factors which should then be analysed and assessed. For example, it may be useful to explore the effect on the applicant firm's business if there were large-scale local redundancies, a recession in the economy, low interest rates or limited demand for its products/services.
Internal risks:
The applicant firm should:
 undertake a sensitivity analysis of various scenarios and the possible outcomes (this could be a reduction in business or an equally large increase in business – for example, towards the end of a tax year);
 consider how the applicant firm would manage if it lost key staff;
 prepare and maintain a contingency plan that deals with the applicant firm's identified key risks.
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(NOTES) 1 Regulatory business plan
Questions 1.23 – 1.26
No additional notes
1.27 Does the applicant firm consider that it will be using hedge fund techniques to manage investments?
Questions you should consider are:-
 Do you manage an unregulated collective investment scheme (UCIS)?
 If yes, is the UCIS domiciled in the UK?
 Do you use derivatives for investment purposes in a UCIS, whether or not domiciled in the UK?
 Do you use shorting techniques in a UCIS whether or not domiciled in the
UK?
 Do you use derivatives for investment purposes in a CIS authorised by a competent authority anywhere in the EU?
Question 1.28 – 1.33
No additional notes
1.34 Does the applicant firm plan to make use of 'side pockets'?
Hedge funds are increasingly active in private equity where assets are – by and large – illiquid and difficult to price. To be active in these markets hedge funds need to isolate their private equity investments from their more liquid positions, so they often create 'side pockets.' Assets in a side pocket are not shared with new investors and when existing investors redeem from the hedge fund, they remain invested in the side pocket until it is liquidated (sale of the assets, initial public offering).
1.35 Does the applicant firm plan to launch additional new funds over the course of the first two years?
No additional notes
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(NOTES) 2 Scope of Permission required
2
When applying for authorisation it is the applicant firm's responsibility to ensure that the regulated activities it requests fully and accurately reflect the business it is proposing to carry on.
The applicant firm therefore needs a scope of permission that matches its needs and covers every aspect of regulated business that it wants to carry on.
Getting the applicant firm's scope of permission right at the outset is fundamental. If the applicant firm is authorised with the wrong scope of permission, it will be breaching our rules.
The Scope of Permission Notice shows the range of regulated activities the applicant firm will be authorised to carry on, as well as the investment instruments and types(s) of customer it can deal with for each specific activity. It will also contain what we refer to as 'requirements' and
'limitations'. In broad terms, limitations are included in the descriptions of specific regulated activities (e.g. can only carry on business with retail clients) and requirements are on the firm to take or not to take specified actions (e.g. not to hold client money).
FSMA states that no person may carry on a regulated activity in the UK, or purport to do so, unless that person is either authorised or exempt. This is known as the general prohibition. If the applicant firm carries on a regulated activity that is not set out in its Scope of Permission Notice then it could be in breach of FSMA and subject to enforcement action.
Finally, please be aware that these details are recorded on our public register, available on our website.
The Scope of Permission Notice will follow the wording in the Perimeter Guidance
PERG 2 (Annex 2). You can find this at: www.fshandbook.info/FS/html/FCA/PERG/2 .
2.1 You must confirm that the applicant firm has completed the
Permission Profile table
How to complete the applicant firm's permission profile
Which regulated activities does the applicant firm need?
The applicant firm will need to look at the list of regulated activities and decide which are relevant to its proposed business. The applicant firm should use the answers given in Section 1, Regulatory business plan,
to assist it in compiling its permission profile. It will then need to build up each of these regulated activities by selecting the appropriate investment and client types and considering whether any additional requirements or limitations are applicable.
Regulated activities
You can find a description of each regulated activity in PERG 2.7 at: www.fshandbook.info/FS/html/FCA/PERG/2/7 .
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(NOTES) 2 Scope of Permission required
You may also find it useful to look at the Handbook Glossary: www.fshandbook.info/FS/html/FCA/Glossary
Which investment types does the applicant firm need for each activity?
You can find a full description of these investments, including guidance on what is excluded from each definition, in PERG 2.6 (specified investments: a broad outline) at: www.fshandbook.info/FS/html/FCA/PERG/2/6.
The applicant firm should continue to build its Permission Profile using this information.
What type of clients will the applicant firm carry on business with?
You need to tell us this so we can continue building up a picture of the type of business the applicant firm will be carrying on. We will use this information, among other things, to assess the applicant firm's risk.
If the applicant firm wishes to limit one or more of its activities to a certain type or types of client, it can do so by selecting the relevant client type, and in doing so apply for an appropriate limitation.
The table below lists the available client types for designated investment business:
Regulated business category
Designated
Investment business
Client type Link to full Glossary definition
Retail
Professional
Eligible counterparty
The scope of the term retail client is different for
MiFID and non-MiFID business. You can access the definition in the Handbook Glossary, see link below: wwwfshandbook.info/FS/html/FCA/Glossary/R
The scope of the term professional client is different for MiFID and non-MiFID business.
You can access the definition in the Handbook
Glossary, see link below: www.fshandbook.info/FS/html/FCA/Glossary
/P
A client can only be an eligible counterparty in relation to eligible counterparty business. For example, the eligible counterparty client type is not available for the regulated activity of managing investments. You can access the respective definitions in the Handbook
Glossary, see link below: www.
fshandbook.info/FS/html/FCA/Glossary/E
2.2 If the applicant firm wants to include other regulated activities and investment types on its permission notice not included in the
Permission Profile table (see page 13 of the form), please give details here.
If the applicant firm carries on a regulated activity that is outside the scope of its permission notice, then it could be in breach of FSMA. So it is important to let us know whether there are any other regulated activities (together with the corresponding investment and client types), not included in the
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(NOTES) 2 Scope of Permission required permission profile table, that are encompassed by the applicant firm's proposed business.
2.3
Is the applicant firm seeking permission to control client money?
Controlling client money would be where an applicant firm has written authority from the client to control money belonging to the client. This would include:
 having access to the client’s bank account including taking direct debits in the firm’s favour; and
 holding a mandate from the client which allows the firm to direct the investment on the client’s money.
If the applicant firm is permitted to hold client money, this will be reflected in its prudential sub-category and its prudential requirements. It will also be required to make appropriate arrangements to comply with the client money rules (refer to CASS for further guidance in this regard): www.fshandbook.info/FS/html/FCA/CASS , specifically CASS 5 .
For a list of standard client money requirements and an outline of their effect for the purposes of MiFID and the Capital Requirements Directive (CRD), see
Annex 5 of the 'MiFID Permissions and Notifications Guide' on our website.
2.4 Is the applicant firm seeking permission to hold client money?
If the applicant firm is permitted to hold client money, this will be reflected in its prudential sub-category and its prudential requirements. It will also be required to make appropriate arrangements to comply with the client money rules (refer to CASS for further guidance in this regard): www.fshandbook.info/FS/html/FCA/CASS , specifically CASS 6 and 7.
2.5 -2.6
Data supplied in question(s) 2.5 and 2.6 will be used by the FCA to discuss with the applicant firm its likely CASS stratification into one of three CASS firm groups (CASS small, medium, large. This in turn drives CASS firms' reporting requirements (the Client Money and Assets Return - CMAR) and the requirement for CASS medium and large firms to apply for a CASS oversight function (CF10a). The table below confirms the banding and reporting/CF10a requirements.
Applicant firms are reminded that CASS 1A.2.2R (1) places an obligation on a firm to determine its classification into one of the three categories on an annual basis.
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(NOTES) 2 Scope of Permission required
CASS firm type
Highest total amount of client money held during the firms last calendar year or that it projects to hold during the current calendar year
Highest total amount of custody assets held during the firms last calendar year or that it projects to hold during the current calendar year
More than £100 billion
Reporting/CF10a
Requirements
CASS large firm
More than
£1 billion
Monthly CMAR reporting.
Must apply for
CF10a*
CASS medium firm
An amount equal to or greater than £1 million and less than or equal to £1 billion
Less than
£1 million
An amount equal to or greater than £10 million and less than or equal to
£100 billion
Less than
£10 million
Monthly CMAR reporting.
Must apply for
CF10a*
CASS small firm
Half yearly CMAR reporting and must assign CASS oversight responsibility to a senior manager.
See CASS 1A.3.R for further information.
* We reserve the right to interview the CF10a applicant to establish the competence and ability to adequately perform the role.
2.7 The applicant firm must tick the box below if it is seeking authorisation only to carry on venture capital business and wishes to adopt the standard requirement below.
The term venture capital business also includes private equity business.
2.8 The applicant firm must tick the box below if it is seeking authorisation only to carry on venture capital and corporate finance business and wishes to adopt the standard requirement below.
The term venture capital business also includes private equity business.
2.9 You must tick the box(es) below if the applicant firm is seeking authorisation for advising retail clients, but it is only advising retail clients on venture capital business and/or corporate finance business
(otherwise it is likely to fall within the scope of the Retail Distribution
Review if your advice relates to retail investment products).
If the applicant intends to only advise with retail clients for venture capital or corporate finance business (or both), the applicant must tick the appropriate box(es) to ensure it is not captured by the Retail Distribution Review.
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(NOTES) 2 Scope of Permission required
If you will be exempt from MiFID by virtue of one or more exemptions in article 2 or 3 of MiFID, you will need to have one of these standard requirements. See PERG 13, esp. 13.1, 1.3.5 and Annex 1 Flow chart 2
( www.fshandbook.info/FS/html/FCA/PERG/13 ).
2.10 You must tick the box below if the applicant firm is exempt from
MiFID by virtue of one or more exemptions in article 2 MiFID.
No additional notes
2.11 You must tick the box below if the applicant firm is exempt from
MiFID by virtue of the exemption in article 3 MiFID.
No additional notes
2.12 You must tick the appropriate box below if the applicant firm is seeking authorisation to be an 'exempt CAD firm'.
If you will be an exempt CAD firm you will need to have the relevant standard requirement. See PERG 13, Q58
(http://fshandbook.info/FS/html/handbook/PERG/13/6 ) for further conditions relating to exempt CAD firm status, including the need to have a client money requirement which prevents you from holding client money in relation to MiFID business.
2.13 Is the applicant firm seeking to become authorised as a BIPRU firm?
A BIPRU firm is a firm, as defined in article 4(1)(2)(c) of the EU CRR that satisfies the following conditions:
(a) it is authorised to provide one or more the following investment services:
(i) execution of orders on behalf of clients;
(ii) portfolio management; and
(b) it may provide one or more of the following investment services:
(i) reception and transmission of orders in relation to one or more financial instruments;
(ii) investment advice.
2.14 You must confirm below if the applicant firm requires the following requirement:
Unable to carry on the MIFID investment service and activity of placing of financial instruments without a firm commitment basis (Annex 1, Section A7 of MiFID)
2.15 You must tick the box below if the applicant firm is a UCITS firm.
UCITS management companies will only need the new managing a UCITS for the management of their UCITS. If they are a UCITS investment firm they will need additional permissions that relate to the MiFID activity (details of
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(NOTES) 2 Scope of Permission required the mapping of MiFID activities onto the RAO can be found in PERG 13 Annex
2).
You can find further information about fund authorisation at:
2.16 You must confirm that the applicant firm requests permission to carry on this regulated activity.
No additional notes
2.17 You must confirm that the applicant firm requests the attachment of this limitation to each regulated activity specified in its completed
Permission Profile table.
The effect of the limitation is that where a firm's permission contains an investment activity comprising 'rights or interests in investments (security)' or 'rights to or interests in investments (contractually based investments)', its permission is limited to the investment types otherwise granted for this activity. For example, if a firm has permission to advise only in relation to shares, its permission to advise in relation to 'rights or interests in investments (security)' is limited to rights to or interests in shares.
2.18 If the applicant firm wants to include other limitations or requirements on its permission notice, please give details here.
Limitations are specific to a particular regulated activity and will limit in some way how it is carried on.
A limitation may come about because either you request one or we decide to impose one.
Should any requirements apply to the applicant firm's permission?
Limitations apply to specific regulated activities (see above) whereas requirements apply to a firm's permission as a whole. Requirements are placed on a firm to take or not to take a specified action, for example, the firm must not hold or control client money.
As with limitations, a requirement may be because you request it or we decide to impose one. If it is the latter, we will discuss this with you when processing your application.
A list of some standard limitations relating to dealing in investments as principal and a standard requirement for UCITS firms is set out below.
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(NOTES) 2 Scope of Permission required
Limitation/Requirement
1. Limited licence firm
Standard Limitation
Unable on a regular basis to
(i) deal on own account in relation to
MiFID financial instruments; and
(ii) underwrite MiFID financial instruments and/or place financial instruments on a firm commitment basis
2. Box Management
Standard limitations
(i) Limited to authorised unit trust box management
(ii) Limited to investment company with variable capital (ICVC) box management
(iii) Limited to recognised collective investment scheme (CIS) box management operations
(iv) Limited to unregulated CIS box operations
3. UCITS firm
Standard requirement
The firm is only permitted to carry on the activities specified in COLL 6.9.9R(1) to
(3) or any successor provision
Effect
Applicant firm becomes a limited licence firm.
Applicant firm becomes an IFPRU
125K firm if it is able to hold client money and/or its permission comprises safeguarding and administering (without arranging) assets (for MiFID financial instruments); otherwise applicant firm becomes an IFPRU 50K firm or a BIPRU firm
Firm becomes a limited licence firm.
This is based on the assumption that the firm’s permission is not subject to other limitations and requirements which permit it to carry on the relevant MiFID investment services and activities, i.e. dealing on own account or underwriting of financial instruments and/or placing of financial instruments on a firm commitment basis. If in doubt, a firm that wishes to be a limited licence firm should also apply for the standard limitation above.
Applicant firm becomes an IFPRU
125K firm if it is able to hold client money and/or its permission comprises safeguarding and administering (without arranging) assets (for MiFID financial instruments); otherwise applicant firm becomes an IFPRU 50K firm or a BIPRU firm.
Firm becomes a UCITS firm. As such, it is exempt from MiFID and is not a firm to which MiFID applies.
See, generally, UPRU.
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(NOTES) 3 Financial resources
3
The Capital Requirements Regulations (CRR), the Capital
Requirements Directive (CRD) and the Markets in Financial
Instruments Directive (MiFID)
Broadly speaking, the CRR/CRD only applies to some firms to which MiFID applies and there are other categories of MiFID firms which are subject to different prudential regimes. The prudential rules these firms need to follow are contained in the Prudential Sourcebook for Investment Firms (IFPRU), the
Prudential Sourcebook for Banks, Building Societies and Investment Firms
(BIPRU), and the General Prudential Sourcebook (GENPRU) and the Interim
Prudential sourcebook: Investment Firms (IPRU(INV)).
Applicant firms using the supplement for Investment managers may be applying for permission to carry on regulated activities covered by MiFID.
MiFID instruments include shares, debentures, government and public securities, warrants, certificates representing certain securities, units, and derivatives where they relate to financial instruments and certain commodity derivatives.
Guidance on MiFID and prudential categorisation (whether CRR/CRD or
BIPRU) and whether firms will be affected by either directive is set out in the
Handbook, see PERG 13: www.fshandbook.info/FS/html/FCA/PERG/13 .
Full requirements for prudential sub-categories
The full requirements for each prudential sub-category of investment firm subject to the CRR/CRD are contained in IFPRU,
The prudential rules for firms to which MiFID applies but which are not subject to the CRR/CRD are contained in the GENPRU and BIPRU and
IPRU(INV), as applicable. Of these:
 BIPRU and GENPRU apply to an investment firm to which MiFID applies but is exempt from the CRR /CRD and is permitted to remain on the CRD III regime, namely a BIPRU firm (see PERG Q58A).
 IPRU(INV) applies to firms to which MiFID applies and are exempted from the CRD and CRR, namely exempt CAD firms, exempt BIPRU commodities firms and exempt IFPRU commodities firms (see notes to 3.1 below).Securities and futures firms not subject to MiFID are generally subject to the relevant rules in IPRU (INV).
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(NOTES) 4 Personnel
€50K
A high-level summary of the provisions that will apply to those investment management firms subject to IPRU (INV) is set out below:
Investment management firm (which is not a MiFID investment firm)
1 & 5
An exempt CAD firm 1,5 & 9
The applicant firm can use the notes to Question 3.1, below, in conjunction with the Handbook, to help to work out its prudential requirements.
3.1 Which prudential requirements/ sub-category apply to the applicant firm?
Section A
BIPRU Investment Firm
Base Capital Resources Requirement
€125K
€730K an IFPRU 50K firm is one which
 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; o execution of orders; or o management of individual portfolios of investments;
 does not hold client's money and/or securities and is not authorised to do so; and is not a UCITS investment firm; and
 does not operate a multi-lateral trading facility. an IFPRU 125K firm is one which
 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; o execution of orders; o 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 multi-lateral trading facility. an IFPRU 730K firm is an investment firm subject to the recast
CAD but is not an IFPRU 50K firm, a BIPRU 125K firm or a UCITS investment firm.
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(NOTES) 4 Personnel
For further information, see PERG 13, questions 60-62.
UCITS investment firm
A UCITS investment firm should hold base capital of €125,000 plus an additional amount of own funds, in accordance with the
UCITS Directive, equal to 0.02% of the amount by which the value of portfolios under management exceed €250,000,000
(subject to an overall maximum base capital requirement of
€10,000,000).
For further information, see PERG 13, question 63.
Capital Resources Requirement
For full scope IFPRU investment firms, the minimum capital resources requirement will be calculated as the higher of the base requirement or the sum of the credit, market and operational risk requirements.
For IFPRU limited activity firms, the minimum capital resources requirement will be calculated as the higher of the base requirement or the sum of the credit, market risk and the fixed overheads requirement (FOR).
Full scope
IFPRU investment firm
IFPRU limited activity firm
IFPRU limited licence firm
For IFPRU limited licence firms, the minimum capital resources requirement will be calculated as the higher of the base requirement or the sum of credit and market risk requirements or the FOR. an investment firm that is neither a IFPRU limited activity firm nor a IFPRU limited licence firm. an investment firm that deals on own account only for the purpose of fulfilling or executing client orders, or gaining entrance to a clearing and settlement system or a recognised exchange when acting in an agency capacity or executing a client order. an investment firm that is not authorised to provide the investment services of dealing on own account or underwriting and/or placing financial instruments on a firm commitment basis, or a UCITS investment firm and which generally may be either a IFPRU 50K firm or a
IFPRU 125K firm, or a BIPRU firm
For further details, see PERG 13 Q64-66.
Section B – MiFID firms not generally subject to GENPRU, IFPRU or
BIPRU
Exempt CAD firm
For guidance for exempt CAD firms, see PERG 13, Q58 and 59. See Chapters
1,5 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 requirements of other applicable chapters of IPRU (INV) that appropriately reflect their non-MiFID business.
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Section C – Non-MiFID firms
Non MiFID investment management firms follow the prudential rules set out in IPRU (INV) chapter 5
Section D – Non-MiFID firms
If it is a UCITS firm an applicant firm will not be subject to MiFID. See, generally UPRU for prudential requirements.
Section E – BIPRU firms
Some investment firms can stay on the FCA rules that implement CRD III
(e.g. 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 they carry out, as defined in the Markets in Financial Instruments Directive (MiFID).
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
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
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: www.fshandbook.info/FS/html/FCA/PERG/13 if you are a BIPRU 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).
3.2 Is the applicant firm an IFPRU or BIPRU investment firm?
You are not required to send your ICAAP 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.
The Pillar 2 Handbook chapters:
GENPRU 1.2
BIPRU 2.2
IFPRU 2.2
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3.3 Is the applicant an IFPRU investment firm?
IFPRU investment 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
as additional supporting documentation in their CRR permissions application -
3.4 Is the applicant firm required to submit FINREP?
A firm is 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.
3.5 Is the applicant firm a significant IFPRU firm under the following rules of the FCA IFPRU sourcebook: 1.1.20R and 1.1.21R?
A significant IFPRU firm is an IFPRU firm that exceeds the threshold for one or more of the following: a) Total assets of £530 million b) Total liabilities of £380 million c) Annual fees and commission income of £160 million d) Client money of £425 million e) Client assets of £7.8 billion
3.6 You must attach the following:
No additional notes
3.7 Is the applicant firm currently trading?
No additional notes
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4
4.1 List the names of the persons you are applying for approval to perform the following controlled functions. A person may perform more than one controlled function.
You must ensure that no person performs a controlled function until the applicant firm has been authorised by us and we have approved the person to perform controlled function(s). If granted, approval is effective from the date of authorisation.
Please note that CF10 (Compliance oversight) is a required function i.e. every firm must appoint a person with this function.
CF11 (Money Laundering Reporting Officer) is also a required functions unless the applicant firm is a sole trader with no employees.
What is an approved person?
An approved person is a person who is approved by us to perform a controlled function for an authorised firm or an appointed representative. To be approved and continue to be approved to perform a controlled function, a person must:
 meet, and maintain, our criteria for approval (the 'fit and proper test') see FIT; and then
 perform their controlled function(s) in line with our Statements of
Principle and Code of Practice, known as APER for Approved Persons.
What is a controlled function?
A controlled function is a function for a regulated business that has particular regulatory significance.
There are different controlled functions relevant to the different types of businesses we regulate. Some controlled functions are required for every firm; others will depend on the nature of your business.
You should consult SUP10 to see how the controlled functions apply to the applicant firm. Each controlled function has a 'CF' number. You can find a full list of all the controlled functions and an explanation of each one at: www.fshandbook.info/FS/html/FCA/SUP/10
On the next page is a summary of the controlled functions relevant to an
Investment Management firm – although not all will be relevant to each firm.
You may find it useful to review the description of each controlled function in the list and tick the ones that apply to the applicant firm.
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CF1
CF2
CF3
CF4
CF10
CF10a
CF11
CF 30
Director
Non-executive director
Chief executive
A person (other than a non-executive director) responsible for directing a company's affairs on the firm's governing body will require this controlled function.
See SUP 10.6.8R
Partner
Compliance oversight
A person at a firm who has the responsibility under the immediate authority of the governing body, for the conduct of the whole of the business.
Partners within a partnership
(including limited liability partnerships) responsible for directing affairs, to whom SUP 10.6.17R applies.
A director or senior manager who has responsibility for oversight of the firm's compliance and reporting to the governing body in respect of that responsibility. 'Compliance' in the case of firms who are not common platform firms means compliance with the rules in
or CIS and CASS of the handbook (see the Handbook:
)Although a firm may choose to use the services of an external compliance consultant, the responsibility for the compliance oversight function remains with one or more directors or
of the firm.
A common platform firm should refer to SYSC 6.1.4 R and SYSC 6.1.5 R
(see the Handbook: www.
See PS09-14 for more details. Client Assets oversight
Money laundering reporting
Customer function
Someone with a sufficient level of authority within a firm who acts in the capacity of the money laundering reporting officer of a firm. See SUP
10.7.13R.
The customer function has to do with giving advice on, dealing and arranging deals in and managing investments. For further information please refer to SUP 10.10.7A R: www.
.
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(NOTES) 4 Personnel
4.2 Does the applicant firm require any other controlled functions not listed in Question 4.1?
Please list any other controlled functions that the applicant firm requires.
It is unlikely that the applicant firm will need any other controlled functions.
However, if you would like to see the full list of controlled functions, please refer to: www.fshandbook.info/FS/html/FCA/SUP/10
4.3 You must fill in ‘Form A  Application to perform controlled functions under the approved persons regime’ for each person who will be performing a controlled function that you have listed in Questions 4.1 and 4.2’ See www.fshandbook.info/FS/html/FCA/SUP/10A/Annex4 for more information
This form is available in the build your own application form page.
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5
5.1 You must confirm the applicant firm has documented compliance procedures in place.
When assessing this application we need to be satisfied that 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 to us when submitting this application. However, they must be ready for inspection at any time. They will also need to be in place so you can prepare the Compliance Monitoring
Programme (see Question 5.2).
Remember that your compliance procedures should be designed so they are specifically tailored to the business, 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 your compliance procedures documentation you should seek professional advice.
Common platform firms should, in particular, consider carefully the obligations in SYSC 6.1. Firms which are not common platform firms are referred, in particular, to SYSC 3.2.7 – 3.2.9G.
5.2 You must confirm you have attached a compliance monitoring programme.
This will need to be included as part of your application.
5.3 You must confirm that all senior management of the applicant firm are aware of and understand the compliance procedures.
Please note this is an ongoing requirement and must be complied with at all times.
5.4 You must briefly describe the procedures the applicant firm has put in place to counter the risks that it might be used by third parties to further financial crime. This includes any offence involving a) fraud or dishonesty, b) misconduct in, or misuse of information relating to, financial markets or c) handling the proceeds of crime (SYSC 3.2.6 and 6.3).
This could be a summary of the applicant firm's anti-money laundering procedures including the following:
Anti-money laundering controls
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(NOTES) 5 Compliance arrangements
SYSC 3.2.6 and 6.3 details the scope and application of the anti-money laundering regime.
Fraud
You could also describe the procedures the applicant firm has put into place for notifying us if the firm identifies any irregularities in its accounting records, regardless of whether there is evidence of fraud (SUP 15.3).
5.5 You must briefly describe the steps the applicant firm has put in place to counter the risk that it or its staff may engage in activity which constitutes market abuse.
This could be a summary of the applicant firm's market conduct systems and controls including monitoring procedures.
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6
If we authorise the applicant firm to carry out investment business it will be allocated to one or more of the following FCA fee blocks:
 A7 – Investment managers.
 A9 – Operators, trustees and depositaries of collective investment schemes and operators of personal pension schemes or stakeholder pension schemes (but not if the firm is a deposit acceptor or life insurer).
 A10 – Firms dealing as principal.
 A12 or A13 – Advisory arrangers, dealers or brokers, either holding and controlling client money/assets (A12) or not holding and controlling client money/assets (A13).
 A14 – Corporate finance advisers.
The fee for each of these fee blocks is based on tariff data submitted within
Section 6. We use your answers to calculate your invoice for the first fee period. We will also use it for calculating fees in the second fee period for firms authorised between 1 January and 31 March. Please ensure the data you submit is accurate as we will only accept changes to the data provided here in exceptional cases; for instance where the business plan has been revised.
When reporting monetary fee tariff data, firms should provide a projected valuation, covering the first 12 months from the date of authorisation
(measured according to the relevant tariff base(s)). Monetary figures should be denominated in pound sterling. Please do not leave any section blank, if relevant enter Nil. FEES 4 Annex 1 of the Handbook has detailed notes on the fee blocks and tariff bases and this is located at: www.fshandbook.info/FS/html/FCA/FEES/4/Annex1
All authorised firms pay a minimum fee to cover the annual costs of being regulated. Where a firm’s business in any fee-block exceeds the amount covered by the minimum fee, the firm will be subject to an additional fee. If you want to work out your firm’s forthcoming fees please use the Fee
Calculator on our website. To do this you will need to know which fee blocks your firm will fall under and the fee tariff data you have entered in Section 6.
To find out which fee blocks your firm will fall into please see www.fshandbook.info/FS/html/FCA/FEES/4/Annex1
If you need further help with completing Section 6, please contact the
Customer Contact Centre on 0300 500 0597.
6.1 Fee block A7 – Fund Managers
How much total Funds under Management does the applicant firm estimate for the first year of authorisation?
A firm authorised to manage funds or assets will fall within FCA fee block A7.
The basis for calculating fees is the estimated amount of Funds under
Management or assets managed for the first year of business, i.e. 12 months from the date of authorisation.
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For the purpose of calculating the total value of funds under management,
“assets” means all assets that include any investment which is designated investment and which is managed on a discretionary basis.
In respect of collective investment schemes, “assets” means the total value of the assets of the scheme.
Please note – only assets that will be managed from an establishment maintained by the firm in the United Kingdom are relevant.
See the fees section of our website for detailed guidance on this fee block, please select A.7.
6.2 Fee block A9 – CIS Operators/Trustees and operators of personal pension schemes and stakeholder pension schemes
How much total Gross Income does the applicant firm estimate for the first year of authorisation?
A firm authorised to establish, operate, wind up or act as a trustee and/or depositaries of collective investment schemes. Firms who also have permission as operators of personal pension schemes or stakeholder pension schemes will fall within fee block A.9. The data we require is the amount of total gross income the firm projects it will receive for the first 12 months from the date of authorisation.
Note for operators of CIS including ACDs and managers of unit trust, gross income excludes box management profits.
Note for operators of personal pension / stakeholder pension schemes, gross income calculation excludes charges made to an investor in respect of third party suppliers.
Note: Only the gross income corresponding to United Kingdom business is relevant.
See the fees section of our website for detailed guidance on this fee block, please select A.9.
6.3 Fee block A10 – Dealers as Principal
How many traders does the applicant firm estimate for the first year of authorisation?
A firm authorised as a principal dealer will be in fee block A.10. The basis for calculating fees for this fee block is the number of traders estimated in the first 12 months of trading following authorisation. We define a trader as any employee or agent who:
 ordinarily acts within the United Kingdom on behalf of an authorised person liable to pay fees to the FCA in its A10 fee block; and who
 as part of their duties in relation to those activities of the authorised person, commits the firm in market dealings or in transactions in securities or in other specified investments in the course of regulated activities.
See the fees section of our website for detailed guidance on this fee block, please select A.10.
6.4/5 Fee blocks A12 and A13 – Advisers/ Arrangers
From 1 April 2013 the tariff base for fee-blocks A12/A13 and A14 is changing. For these fee-blocks, firms are not required to provide information on approved persons, instead firms will provide information on income.
How many approved persons with customer function 30 (CF30) will the firm have at the date of authorisation? Please exclude those
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(NOTES) 6 Fees and levies persons who will be solely acting as an investment manager or solely advising clients in connection with corporate finance business.
A firm authorised for investment business is likely to be in fee-block A.12
(holding client money) or A.13 (not holding client money). Until 1 st April fees in both A.12 and A.13 are based on the number of approved persons holding control function CF30. A firm must exclude those individuals who will act
solely as an investment manager or solely corporate finance adviser. An individual acting as investment manager and/or advising clients in connection with corporate finance business should be included if they carry out other investment related functions.
Please note: If an applicant firm will have individuals registered as CF30 it
must complete this section as it is likely that firms who have permission for investment or related activities will also fall within A.12/A.13.
See the fees section of our website for detailed guidance on this fee block, please select A.12/A.13.
6.6 Fee Block A12/A13 – Advisers/Arrangers
How much annual income does the applicant firm estimate for the first year of authorisation in relation to the regulated activities for fee-block A12/A13 (see FEES 4, Annex 1R, Part 1) advisors, arrangers, dealers or brokers holding and/or controlling client money/assets OR advisors, arrangers, dealers or brokers not holding or controlling client money/assets. Please exclude income arising from corporate finance business.
A firm authorised for investment business is likely to be in fee-block A.12
(holding client money) or A.13 (not holding client money). From 1 st April, fees in both A.12 and A.13 are based on income. A firm must exclude income from corporate finance business.
From 1 April 2013 both A12 and A13 are based on the net amount of income retained from the regulated activities proscribed in fee blocks A12 and A13.
This includes income from:
Advisory and consultancy charges
Brokerage
Fees
Commissions
Related income arising from the proscribed activities (e.g. administration charges, overriders, profit shares etc.)
Interest earned from above income
Firms should deduct:
Rebates to customers
Fees or commissions passed to other authorised firms – for example, where there is a commission chain (this is to avoid double counting).
Business expenses cannot be deducted. A firm must exclude advisory activity income arising from its corporate finance business.
6.7 Fee block A14 – Corporate finance advisers
How many approved persons will the firm have at the date of authorisation, with customer function 30 (CF30) who advise clients in connection with corporate finance business? Please count individuals who are doing so exclusively or in conjunction with other types of advising/arranging activities.
A firm authorised to carry on corporate finance business is likely to be in feeblock A.14. In A.14 please report the number of individuals who will be
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(NOTES) 6 Fees and levies approved to perform CF30 and can advise clients in connection with corporate finance business, at the date of authorisation.
Please count individuals who will be advising on corporate finance exclusively and those providing corporate finance advice in conjunction with other types of investment advising/arranging activities.
See the fees section of our website for detailed guidance on this fee block, please select A.14.
6.8 FCA Fee Block A14 – Corporate finance advisers
How much annual income does the applicant firm estimate for the first year of authorisation in relation to the regulated activities for fee-block A14 – corporate finance business.
From 1 April, fees in A14 are based on income. A firm must include income retained from its corporate finance business. Please include advisory activity income arising exclusively from corporate finance and no other investment business.
The ombudsman service’s general levy is based on relevant business.
Relevant business is business conducted with eligible complainants who are consumers only. If an applicant firm will only conduct business with eligible complainants who are not consumers then is should report “nil” in this section. We define an 'eligible complainant' under DISP 2.7 of our Handbook: www.fshandbook.info/FS/html/FCA/DISP/2/7 . Alternatively if the firm will not conduct any business with eligible complainants it can apply for an exemption from the ombudsman’s service’s levy. Please complete the declaration section on the supplementary form to apply for an exemption.
The ombudsman’s service’s exemption guidance is available on our website.
6.9 Fee block I005 - Fund Managers
How much relevant funds under management does the applicant firm estimate for the first year of authorisation?
The data submitted here is to calculate the firm's Ombudsman general levy in relation to its discretionary investment business. If the applicant firm’s entire investment activity will be with consumers, then the data reported here will be same as FCA fee-block A.7.
6.10 Fee block I006 – CIS Operators/trustees
How much relevant gross income does the applicant firm estimate for the first year of authorisation?
The data submitted here will be used to calculate the firm’s Ombudsman general levy in relation to activities relating to setting up, running and winding up collective investment schemes and/or personal pensions and stakeholder pension schemes. If the applicant firm’s entire business will be carried on with consumers then the data reported here will be the same as
FCA fee-block A.9.
6.11 Fee block I007 – Dealers as Principal
How many relevant traders does the applicant firm estimate for the first year of authorisation?
The data submitted here will be used to calculate the firm’s Ombudsman general levy in relation to its investment activities that falls within fee block
A.10 (dealing as principal). If the applicant firm’s entire business will be
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(NOTES) 6 Fees and levies carried on with consumers then the data reported here will be the same as
FCA fee block A.10.
6.12/13 Fee block I008/I009 – Advisers/ Arrangers
How many relevant approved persons with customer function 30
(CF30) will the firm have at the date of authorisation? Please exclude those persons who will be solely acting as an investment manager or solely advising clients in connection with corporate finance business.
The data submitted here will be used to calculate the firm’s ombudsman general levy in respect of investment arranging and non discretionary advising and related activities. Please only include individuals that will perform the above customer functions with consumers. If the applicant firm’s entire business with be carried on with consumers only then the data reported here will be the same as FCA fee block A.12/A.13.
6.14 Fee block I008/I009 – Advisers/arrangers/dealers/brokers
How much relevant annual income does the applicant firm estimate for the first year of authorisation in relation to advisors, arrangers, dealers or brokers holding and or controlling client money or assets
OR not holding or controlling client money or assets. Please exclude income from corporate finance business.
The data submitted here will be used calculate the firm’s ombudsman service’s general levy in relation to investment business. If all the applicant firm's investment business is conducted with consumers then the data you report here will be the same as that reported under the FCA data.
6.15 Fee block I010 – Corporate Finance Advisers
How many relevant approved persons will the firm have at the date of authorisation, with customer function 30 (CF30) who will advise clients in connection with corporate finance business?
The data submitted here will be used to calculate the firm’s ombudsman general levy in respect of corporate finance advising activities. Please only include individuals that will perform the above customer functions with consumers. If the applicant firm’s entire business with be carried on with consumers only then the data reported here will be the same as FCA fee block A.14.
6.16 Fee block I010 - Corporate finance advisers
How much relevant annual income does the applicant firm estimate for the first year of authorisation in relation to in relation to the regulated activities for fee-block I010 - corporate finance business.
The data submitted here is to calculate the firm's Ombudsman Service levy in relation to corporate finance business.
The FSCS levy comprises three parts:
 Base Costs - operating costs not directly related to the payment of compensation.
 Specific Costs - operating costs that are directly related to the payment of compensation arising from valid claims.
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(NOTES) 6 Fees and levies
 Compensation Costs - provides the funds to make valid compensation payments.
As a newly authorised firm your first invoice will only cover the Base Costs of the FSCS levy, which is based on your FCA fees. From the subsequent fees period the firm will be liable for the full FSCS levy. The tariff data provided here will be used to calculate your FSCS levy in the second fee year if your firm receives its permission between 1 January and 31 March.
The FSCS funding model for compensation and specific costs uses five board classes:
 deposits;
 life and pensions;
 general insurance;
 investments; and
 home finance.
With the exception of the deposits class, each broad class is divided into two
"sub-classes" based on provider/intermediation activities. Each sub-class is made up of firms which are providers or intermediaries and engage in similar styles of business with similar types of customer.
The sub-classes are based on the activities a firm undertakes (and are aligned to their appropriate regulators permissions). A firm could be allocated to one or more sub-classes according to the activities that it undertakes.
The FSCS levy is calculated by reference to a firm’s estimated eligible
business. Eligible business refers to business conducted with eligible claimants. An eligible claimant is a person or entity that is able to bring a claim for compensation to the FSCS under COMP 4.2 of the Handbook. See www.fshandbook.info/FS/html/FCA/COMP/4/2#D7 for detailed list of persons that qualifies for FSCS compensation.
If the applicant firm will not carry on any business with eligible claimants, it can apply for an exemption from the FSCS specific and compensation levy.
Please complete the declaration section on the supplementary form to apply for an exemption.
6.17 Sub Class SC02 – Life and Pensions Intermediation
How much annual eligible income (AEI) does the firm estimate for the first year of authorisation in relation to its life and pensions intermediation business (including pure protection) business only?
The data submitted here is to calculate the firm's FSCS levy in relation to life
and pensions investments and long term insurance contracts intermediation activities. Life and pensions contracts mean long term insurance contracts (including pure protection) and rights under a stakeholder pension scheme or a personal pension scheme.
Detailed information on how to calculate AEI for SC02 is provided in the fees section of our website: www.fshandbook.info/FS/html/FCA/FEES/6/Annex3
6.18 Sub Class SD01 – Fund Management
How much annual eligible income (AEI) does the firm estimate for the first year of authorisation in relation to fund management business only?
The data submitted here is to calculate the firm's FSCS levy in relation to fund management business. It also includes activities relating to collective investment schemes, authorised unit trust schemes, and acting as depositary of an open-ended schemes.
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(NOTES) 6 Fees and levies
Income expected from assets managed on a non-discretionary basis, being assets that the applicant firm will have a contractual duty to keep under continuous review but in respect of which prior consent of the clients must be obtained for proposed transactions should be reported in sub class SD02.
Detailed information on how to calculate AEI for SD01 is provided in the fees section of our website: www.fshandbook.info/FS/html/FCA/FEES/6/Annex3
6.19 Sub Class SD02 – Investment Intermediation
How much annual eligible income (AEI) does the firm estimate for the first year of authorisation in relation to investment intermediation business only?
The data submitted here is to calculate the firm’s FSCS levy for the investment intermediation activities. It includes all intermediation activities in relation to designated investment business except activities that relate to long term insurance contracts for rights under a stakeholder pension scheme or a personal pension scheme. Investment mediation activities relating to long term insurance contracts should be reported in sub class SC02 where applicable.
Detailed information on how to calculate AEI for SD02 is provided in the fees section of our website: www.fshandbook.info/FS/html/FCA/FEES/6/Annex3
6.20 You must confirm that the applicant firm understands that it is liable and remains liable to pay fees until such time as the FCA cancels its permission. This is irrespective of whether it is trading, or even if it has notified us of intention to case trading or submitted an application to cancel.
No additional notes
6.21 The ombudsman service exemption – if the applicant firm will not conduct business with eligible complainants and do not foresee doing so in immediate future, it may apply for Ombudsman exemption.
Please read the ombudsman service exemption guidance before completing this section. This can be found on our website.
Applicant firms that will not conduct business with eligible complainants qualify for exemption from the ombudsman service levy. Exemption will mean the applicant firm will not have to pay an ombudsman service general levy.
If this application has highlighted that the applicant firm will conduct business with retail clients then an exemption is unlikely to be available. This is because retail clients are likely to qualify as eligible complainants.
If the applicant firm will not carry out business with eligible complainants please tick the relevant box in Question 6.17 If at any point in the future the applicant firm is to initiate business with eligible complainants it must notify us immediately.
6.22 FSCS Exemption – if the applicant firm will not conduct business that could give rise to a protected claim by an eligible claimant and do not foresee doing so in immediate future, it may apply for FSCS exemption.
Please read the FSCS exemption guidance before completing this section.
This can be found on our website.
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(NOTES) 6 Fees and levies
Applicant firms that will not conduct business with eligible claimants can qualify for exemption from the Specific and Compensation costs of the FSCS levy. Please note that all applicant firms will pay toward the Base cost of the
FSCS regardless of exemption unless there are non-participant firms. Nonparticipants firms include authorised professional firms who are members of the Law Society in England and Wales or Scotland. Please refer to www.fshandbook.info/FS/glossary-html/FCA/Glossary/P?definition=G837 for the full list of non-participant firms.
If this application has highlighted that the applicant firm will conduct business with retail clients then exemption is unlikely to be available. This is because retail clients are likely to qualify as eligible claimants. For a full definition of an 'eligible claimant' see COMP 4.2 of the handbook at: www.fshandbook.info/FS/html/FCA/COMP/4/2
If the applicant firm will not conduct business with eligible claimants please tick the relevant box in Question 6.18. If at any point in the future the applicant firm is to initiate business with eligible claimants it must notify the appropriate regulator immediately.
Please note the ombudsman service and FSCS exemption(s) are not automatic and are subject to approval. You will be notified if your
exemptions are not granted.
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