52 / 72
Markets and Securities Services | Issue 46
50
strategic objectives, and responsibility for the risk
strategy and the internal governance of the firm.
The FCA is proposing to extend the scope of
SYSC 4.3A (which at present only applies to
CRR firms including significant IFPRU firms) to
all common platform firms. In addition, the FCA
is proposing to extend the application of these
requirements to Article 3 MiFID firms as rules.
Application to branches of third country firms
The FCA has taken account of the current
application of certain SYSC provisions as rules
or guidance, and the fact that the governance
structures of branches are likely to be different to
the governance structures of UK firms, and will
also likely be subject to equivalent organisational
requirements in their own country.
So where existing equivalent provisions apply
to third country branches, the FCA proposes to
maintain the status quo where possible, although
there are a few exceptions to this; where the FCA
proposes to change existing guidance into a rule.
FCA description of implications for firms in CP16/19
Common platform firms will be subject to new
and enhanced requirements that will promote
sound internal governance arrangements and
a sound risk culture.
MiFID and FCA-related Handbook materials
already contained provisions relating to the
managing body of in-scope firms and third
country branches so this should not have a
significant impact on firms’ systems and controls.
The FCA does point out, though, that ESMA and the
European Banking Authority (EBA) will consult on
joint guidelines on the assessment of the suitability
of members of the management body and key
function holders under CRD IV and MiFID II.
Remuneration (Chapter 6)
The remuneration provisions in this chapter
are relevant to MiFID investment firms,
financial advisers and corporate finance
firms exempt from MiFID under Article 3.
This chapter explains the FCA’s views on
changes it proposes to make to SYSC to
implement Article 24(10) of MiFID II (and its
implementing measures in Article 27 of the
MiFID II Implementing Regulation) in relation
to the remuneration of sales staff.
Common platform
firms will be subject
to new and enhanced
requirements that
will promote sound
internal governance
arrangements and a
sound risk culture.