GIM3070 - Regulatory framework: FSA Handbook of rules and guidance
Part 10 FSMA 2000 contains the FSA’s powers for making rules and guidance. Rule making powers are conferred under section 138 onwards and section 156 gives general supplementary powers to make rules for specific cases. Section 153 requires these rules to be made in writing. Guidance is issued under the powers conferred under section 157.
The FSA’s rules and guidance are consolidated into its Handbook of Rules and Guidance, which can be accessed via the FSA website (). It consists of a number of ‘sourcebooks’ and manuals, grouped into the following blocks:
- High Level Standards
- Prudential Standards
- Business Standards
- Regulatory Processes
- Redress
- Specialist sourcebooks
- Listing, prospectus and disclosure
- Guides
Sourcebooks grouped under the headings “High Level Standards” and “Regulatory Processes” apply to all persons whose activities are regulated by the FSA, as do some of the sourcebooks under “Business Standards”. Each sourcebook has a reference code. The key sourcebooks of general application are as follows:
| High Level Standards | Reference |
|---|---|
| Principles for Business | PRIN |
| Senior Management Arrangements, Systems and Controls | SYSC |
| Threshold Conditions | COND |
| Statement of Principle and Code of Practice for Approved Persons | APER |
| The Fit and Proper test for Approved Persons | FIT |
| General Provisions | GEN |
| Regulatory Processes | - |
| Authorisation | AUTH |
| Supervision | SUP |
| Enforcement | ENF |
| Decision making | DEC |
Under the Business Standards block, the ICOB sourcebook sets out the conduct of business standards applying to insurance firms (for example communications to customers, claims handling).
Under the Prudential Standards block, the Interim Prudential sourcebook for Insurers (IPRU(INS)) and the Prudential sourcebook for Insurers (INSPRU) set out the solvency and other prudential requirements for insurers (GIM3110). The aim had been to consolidate all main prudential requirements into a single sourcebook, the Integrated Prudential sourcebook (PRU), but this proved difficult and PRU ceased to apply from 1 January 2007.
Changes in the regulatory Handbook landscape are quite common and some of the sourcebooks referred to above have been substantially amended or replaced. PRU did not come into being until after 2001 when parts of IPRU(INS) migrated to it and to GENPRU which is still in force and relevant.
Provisions within the Handbook are given certain statuses denoted by ‘icons’, letters or symbols. The most important of these are (references to FSMA 2000):
| R | Rules made under section 138 (general) or sections 140 to 147 (special) |
|---|---|
| G | Guidance given under section 157, affecting the operation of the Act and the Rules |
| E | Evidential provisions with characteristics specified under section 149 |
| D | Directions and requirements given under various powers of the Act and statutory instruments |
There is a full explanation of the icons at Chapter 6 of the FSA Handbook readers’ guide.