Which of the following must you do to ensure compliance with independence policy

[Note: ESMA has also issued guidelines under article 16(3) of the ESMA Regulation covering certain aspects of the MiFID compliance function requirements. See http://www.esma.europa.eu/content/Guidelines-certain-aspects-MiFID-compliance-function-requirements.]

SYSC 6.1.-1 G 03/01/2018 RP

SYSC 6.1.1 R 03/01/2018 RP

SYSC 6.1.1A G 13/12/2018 RP

10The FCA provides guidance on steps that a firm can take to reduce the risk that it might be used to further financial crime in FCG (Financial Crime Guide: A firm’s guide to countering financial crime risks) and FCTR (Financial Crime Thematic Reviews)18.

SYSC 6.1.2 R 01/01/2021 RP

SYSC 6.1.2A G 03/01/2018 RP

SYSC 6.1.3 R 09/12/2019 RP

SYSC 6.1.3A G 03/01/2018 RP

1. (1)

   4Other firms should take account of the compliance function rule (SYSC 6.1.3 R) as if it were guidance (and as if should appeared in that rule16 instead of must) as explained in SYSC 1 Annex 1 3.3 R(1)16.

   5
2. (2)

   Notwithstanding SYSC 6.1.3 R, as it applies under (1), depending on the nature, scale and complexity of its business, it may be appropriate for a firm to have a separate compliance function. Where a firm has a separate compliance function the firm should also take into account SYSC 6.1.3 R and SYSC 6.1.4 R as guidance.

SYSC 6.1.4 R 09/12/2019 RP

In order to enable the compliance function to discharge its responsibilities properly and independently, a firm that is a20management company or an operator of an electronic system in relation to lending20 must ensure that the following conditions are satisfied:

16 8

1. (1)

   the compliance function must have the necessary authority, resources, expertise and access to all relevant information;

2. (2)

   a compliance officer must be appointed and must be responsible for the compliance function and for any reporting as to compliance required by SYSC 4.3.2 R;

3. (3)

   the relevant persons involved in the compliance functions must not be involved in the performance of the 16services or activities they monitor;

4. (4)

   the method of determining the remuneration of the relevant persons involved in the compliance function must not compromise their objectivity and must not be likely to do so.

[Note:16 article 10(3) of the UCITS implementing Directive]8

SYSC 6.1.4-A G 01/01/2022 RP

SYSC 6.1.4A R 26/07/2013 RP

1. (1)

   4A firm which is not a common platform firm or management company8 and which carries on designated investment business with or for retail clients or professional clients must allocate to a director or senior manager the function of:

   1. (a)

      having responsibility for oversight of the firm's compliance; and

   2. (b)

      reporting to the governing body in respect of that responsibility.

2. (2)

   In SYSC 6.1.4A R (1) compliance means compliance with the rules in:

   1. (a)

      COBS (Conduct of Business sourcebook);

   2. (b)

      COLL (Collective Investment Schemes sourcebook);

      135
   3. (c)

      CASS (Client Assets sourcebook); and5

      5
   4. (d)

      ICOBS (Insurance: Conduct of Business sourcebook).5

SYSC 6.1.4-B G 22/07/2013 RP

SYSC 6.1.4C R 09/12/2019 RP

1. (1)

   21A firm in (2) or (3) must appoint a compliance officer to be responsible for ensuring the firm meets its obligations under SYSC 6.1.1R for any compliance function the firm has and for any reporting as to compliance which may be made under SYSC 4.3.2R.

2. (2)

   21This rule applies to:

   1. (a)

      a debt management firm; and

   2. (b)

      a credit repair firm.

3. (3)

   21This rule also applies to a firm that meets the following conditions:

   1. (a)

      it is a Class 1 firm as defined in CMCOB 7.2.5R(1); and

   2. (b)

      SUP 10C (FCA senior managers regime for approved persons in SMCR firms) applies the compliance oversight function to it.

SYSC 6.1.4-C G 10/12/2018 RP

1. (1)

   15This guidance is relevant to an SMCR firm17 required to appoint a compliance officer under SYSC 6.1.4R or article 22(3) of the MiFID Org Regulation as applicable16.

2. (2)

   Taking account of the nature, scale and complexity of its activities, the firm should have appropriate procedures to ensure that the removal or any other disciplinary sanctioning of the compliance officer does not undermine the independence of the compliance function.

3. (3)

   In the FCA's view, it will be appropriate, in many cases, for the removal or any other disciplinary sanctioning of the compliance officer to require the approval of a majority of the management body, including at least a majority of its members who do not perform any executive function in the firm.

SYSC 6.1.5 R 09/12/2019 RP

SYSC 6.1.6 G 03/01/2018 RP

SYSC 6.1.7 R 01/01/2021 RP