2. Authorisations and Exempt Persons

Question 1

List regulated persons who are exempt from Part 4A permission authorisation.

Answer 1

1. Lloyd’s syndicate members
2. Appointed representatives
3. Members of Designated Professional Bodies (DPB) - accountant, actuaries, lawyers, solicitors.
4. Recognised Investment Exchanges (RIE)
5. Recognised Clearing Houses (RCH) - LCH.Clearnet and Euroclear
6. Other exempted bodies (supranational organisations, governments and central banks)

Question 2

List the two persons that are exempt from authorisation but are NOT exempt persons.

Answer 2

DPBs and Lloyd’s syndicate members

Question 3

What document determines whether Part 4A authorisation is needed?

Answer 3

Perimeter Guidance Manual (PERG)

Question 4

Do FCA/PRA grant blanket permission?

Answer 4

No, you must apply for authorisation on specified activities with specified investments. You are not automatically authorised for all regulated activities.

Question 5

What are the requirements/conditions to gain Part 4A permission AND how do you find out how to gain it?

Answer 5

You must look at the Threshold Conditions (COND) to find out how.

Question 6

List the Threshold Conditions for FCA firms only.

Answer 6

1. Location of Offices
2. Effective Supervision
3. Appropriate Resources
4. Suitability (Fitness and Propriety)

5.Business Model.

Question 7

List the Threshold Conditions for dual-regulated firms (both FCA and PRA).

Answer 7

1. Legal Status
2. Location of Offices
3. Effective Supervision
4. Appropriate Resources
5. Appropriate non-financial resources
6. Prudent Conduct
7. Suitability Test (Fitness and Propriety)
8. Business Model

Question 8

What is an additional COND for motor insurers?

Answer 8

Appoint a claims representatives in addition to the originally listed minimum COND.

Question 9

What can persons do if initially denied Part 4A permission?

Answer 9

Firms may appeal to the Upper Tribunal if granted partial or denied authorisation.

Question 10

What is the impact of Brexit on passporting rights?

Answer 10

Firms now classified as ‘third-country’ firms and must set up subsidiaries in the relevant country and seek local authorisation to enjoy passporting rights.