Transitional Provisions and Schedules

Part

SYSC Senior Management Arrangements, Systems and Controls sourcebook

Chapter

Transitional Provisions and Schedules

Printed on: 03/07/2024

Rulebook at: 01/01/2010

Transitional Provisions and Schedules

SYSC TP 1

Common platform firms

TP 1: Common platform firms

Application

1.1

SYSC TP 1 applies to a common platform firm.

Commencement and expiry of SYSC TP1

1.2

SYSC TP 1 comes into force on 1 January 2007 and applies until 1 November 2007.

Purpose

1.3

From 1 November 2007, a firm must comply with the common platform requirements and SYSC 3 will cease to apply to it. However, until 1 November 2007, a firm may choose to comply with the specific parts of the common platform requirements instead of SYSC 3. The purpose of SYSC TP 1 is to give a firm the option of complying with the common platform requirements sooner than 1 November 2007.

1.4

The ability to comply with the common platform requirements before 1 November 2007 does not apply to SYSC 9 (Record-keeping), SYSC 8.2 (Outsourcing of portfolio management for retail clients to a non-EEA State) or SYSC 8.3 (Guidance on outsourcing portfolio management for retail clients to a non-EEA State). All firms must continue to comply with the record-keeping requirements in SYSC 3.2.22 G until 1 November 2007, when SYSC 9 will enter into force.

The decision to comply with the common platform requirements

1.5

SYSC 4 to SYSC 7, SYSC 8.1 and SYSC 10 do not apply to a firm unless it decides to comply with them sooner than 1 November 2007.

1.6

If a firm decides to comply with the common platform requirements in accordance with SYSC TP 1.5R:

(1) it must make a record of the date of the decision and the date from which it is to be effective; and

(2) subject to SYSC TP 1.7R below, from the effective date, it must comply with SYSC 4 to SYSC 7, SYSC 8.1 and SYSC 10, and SYSC 3 will not apply to it.

1.7

The following provisions in SYSC 3 will continue to apply to a firm that decides to comply with the common platform requirements before the 1 November 2007:

(1) SYSC 3.2.23 R, SYSC 3.2.24 R, SYSC 3.2.26 R and SYSC 3.2.28 R to SYSC 3.2.35 R in so far as SYSC 12.1.13 R applies to it; and

(2) SYSC 3.2.20 R to SYSC 3.2.22 G.

1.8

The purpose of SYSC TP 1.7R is to ensure the effective operation of the provisions on consolidated risk management processes and internal control mechanisms in relation to a firm that decides to comply with the common platform requirements before 1 November 2007.

1.9

A decision by a firm to comply with the common platform requirements must be made in relation to all of the common platform requirements. The firm may not 'cherry-pick'.

Definitions in SYSC TP1 and the common platform requirements

1.10

The terms common platform firm and MiFID investment firm have effect in SYSC TP 1 and the common platform requirements as if MiFID applied generally from 1 January 2007.

01/01/2007

SYSC TP 2

Firms other than common platform firms, insurers, managing agents and the Society

(1)

(2)

(3)

(4)

(5)

(6)

Material to which the transitional provision applies

Transitional provision

Transitional provision: dates in force

Handbook provisions:
Coming into force

2.1

SYSC 8.1

If a firm other than a common platform firm, insurer, managing agent or the Society has in force on 1 April 2009 outsourcing arrangements which would be covered by SYSC 8.1 it need not amend those contracts to comply with these provisions but should comply with the new rules and guidance in respect of any outsourcing contracts which are entered into, or materially amended, on or after 1 April 2009.

1 April 2009 indefinitely

1 April 2009

01/04/2009

SYSC TP 3

Remuneration code

TP 3 applies to a firm that is unable to comply with the Remuneration Code general requirement because of an obligation it owes to an employee (the "obligation") under an agreement entered into on or before 18 March 2009 (the "agreement").

A firm's compliance with the obligation shall not cause it to be in breach of the Remuneration Code general requirement provided that the firm complies with 3R.

(1)

Where a firm is entitled to amend the agreement in a way that enables it to comply with the Remuneration Code general requirement it must do so at the earliest opportunity and no later than 31 March 2010.

(2)

Otherwise, a firm must:

(a)

take reasonable steps to amend the obligation or terminate the agreement at the earliest opportunity;

(b)

amend the obligation or terminate the agreement no later than 31 December 2010; and

(c)

adopt specific and effective arrangements, processes and mechanisms to manage the risks raised by the obligation.

By 1 January 2010, a firm should have at least initiated a review of the extent to which the measurement of performance for any existing long term incentive plans takes account of future risks. The FSA may discuss the timing of that review and any remedial action with the firm.

01/01/2010

SYSC Sch 1

Record keeping requirements

01/12/2004

SYSC Sch 1.1

The aim of the guidance in the following table is to give the reader a quick over-all view of the relevant record keeping requirements.

It is not a complete statement of those requirements and should not be relied on as if it were.

01/12/2004

SYSC Sch 1.2

Handbook reference

Subject of record

Contents of record

When record must be made

Retention period

SYSC 2.2.1 R

Arrangements made to satisfy SYSC 2.1.1 R (apportionment) and SYSC 2.1.3 R (allocation)

Those arrangements

On making the arrangements and when they are updated

Six years from the date on which the record is superseded by a more up-to-date record

SYSC 3.2.20 R

Matters and dealings (including accounting records) which are the subject of requirements and standards under the regulatory system

Adequate

Adequate time

Adequate

SYSC 10.1.6 R

Conflict of interest

Kinds of service or activity carried out by or on behalf of the firm in which a conflict of interest entailing a material risk of damage to the interests of one or more clients has arisen or, in the case of an ongoing service or activity, may arise.

Not specified

5 years

SYSC 14.1.53 R

Prudential risk management and systems and controls

Accounting and other records that are sufficient to enable the firm to demonstrate to the FSA : (1) that the firm is financially sound and has appropriate systems and controls; (2) the firm's financial position and exposure to risk (to a reasonable degree of accuracy); (3) the firm's compliance with the rules in GENPRU, INSPRU and SYSC.

Not specified

3 years, or longer as appropriate

01/01/2007

SYSC Sch 2

Notification requirements

01/12/2004

SYSC Sch 2.1

There are no notification or reporting requirements in SYSC.

01/12/2004

SYSC Sch 3

Fees and other required payments

01/12/2004

SYSC Sch 3.1

There are no requirement for fees or other payments in SYSC.

01/12/2004

SYSC Sch 4

Powers exercised

01/12/2004

SYSC Sch 4.1

The following powers and related provisions in the Act have been exercised by the FSA to make the rules in SYSC:

Section 138 (General rule-making power)

Section 145 (Financial promotion rules)

Section 146 (Money laundering rules)

Section 149 (Evidential provisions)

Section 150(2) (Actions for damages)

Section 156 (General supplementary powers)

01/01/2010

SYSC Sch 4.2

The following powers in the Acthave been exercised by the FSA to give the guidance in SYSC:

Section 157(1) (Guidance)

Section 158A (Guidance on outsourcing by investment firms and credit institutions)

06/10/2009

SYSC Sch 5

Rights of action for damages

01/12/2004

SYSC Sch 5.1

The table below sets out the rules in SYSC contravention of which by an authorised person may be actionable under section 150 of the Act (Actions for damages) by a person who suffers loss as a result of the contravention.

01/12/2004

SYSC Sch 5.2

If a 'Yes' appears in the column headed 'For private person', the rule may be actionable by a 'private person' under section 150 (or, in certain circumstances, his fiduciary or representative; see article 6(2) and (3)(c) of the Financial Services and Markets Act 2000 (Rights of Action) Regulations 2001 (SI 2001 No 2256)). A 'Yes' in the column headed 'Removed' indicates that the FSA has removed the right of action under section 150(2) of the Act. If so, a reference to the rule in which it is removed is also given.

01/12/2004

SYSC Sch 5.3

The column headed 'For other person' indicates whether the rule may be actionable by a person other than a private person (or his fiduciary or representative) under article 6(2) and (3) of those Regulations. If so, an indication of the type of person by whom the rule may be actionable is given.

01/12/2004

SYSC Sch 5.4

Chapter/Appendix

Section/Annex

Paragraph

Right of action under section 150

For private person?

Removed?

For other person?

SYSC 2 and SYSC 3

Yes SYSC 1 Annex 1.1.12R

SYSC 4 to SYSC 10

Yes SYSC 1 Annex 1.2.19R

SYSC 11 to SYSC 19

Yes SYSC 1.4.2 R

01/01/2010

SYSC Sch 6

Rules that can be waived

01/12/2004

SYSC Sch 6.1

The rules in SYSC can be waived by the FSA under section 148 of the Act (Modification or waiver of rules) in so far as this is compatible with the United Kingdom's responsibilities to implement the requirements of any European Directive.

01/01/2007