SRA Handbook

Interpretation

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Rule 8: Interpretation

8.1

All italicised terms in these rules are to be interpreted in accordance with chapter 14 of the SRA Code of Conduct unless they are defined as follows:

agreement provider

has the meaning given by article 63J(3) of the Regulated Activities Order read with paragraphs (6) and (7) of that article;

agreement seller

has the meaning given by article 63J(3) of the Regulated Activities Order;

authorised person

has the meaning given in section 31 of FSMA;

broker funds arrangement

means an arrangement between a firm and a life office (or operator of a regulated collective investment scheme) under which the life office (or operator of the regulated collective investment scheme) agrees to establish a separate fund whose composition may be determined by instructions from the firm and in which it is possible for more than one client to invest;

client

in relation to any regulated activities carried on by a firm for a trust or the estate of a deceased person (including a controlled trust), means the trustees or personal representatives in their capacity as such and not any person who is a beneficiary under the trust or interested in the estate;

collective investment scheme

means (in accordance with section 235 of FSMA(Collective Investment Schemes)) any arrangements with respect to property of any description, including money, the purpose or effect of which is to enable persons taking part in the arrangements (whether by becoming owners of the property or any part of it or otherwise) to participate in or receive profits or income arising from the acquisition, holding, management or disposal of the property or sums paid out of such profits or income, which are not excluded by the Financial Services and Markets Act (Collective Investment Schemes) Order 2001 (SI 2001/1062);

contract of insurance

means (in accordance with article 3(1) of the Regulated Activities Order) any contract of insurance which is a long-term insurance contract or a general insurance contract;

contractually based investment

has the meaning given by article 3(1) of the Regulated Activities Order but does not include an investment which falls within the definition of a packaged product;

controller

has the meaning given in section 422 of FSMA;

employee

means an individual who is employed in connection with the firm's regulated activities under a contract of service or under a contract for services such that he or she is held out as an employee or consultant of the firm;

exempt person

means a person who is exempt from the general prohibition as a result of an exemption order made under section 38(1) or as a result of section 39(1) or 285(2) or (3) of FSMA and who, in engaging in the activity in question, is acting in the course of business in respect of which that person is exempt;

FSA

means the Financial Services Authority;

FSA Register

means the record maintained by the FSA as required by section 347 of FSMA and including those persons that carry on, or are proposing to carry on, insurance mediation activities;

FSMA

means the Financial Services and Markets Act 2000;

funeral plan contract

has the meaning given in article 59 of the Regulated Activities Order;

general insurance contract

is any contract of insurance within Part 1 of Schedule 1 to the Regulated Activities Order;

general prohibition

has the meaning given in section 19(2) of FSMA;

home purchaser

has the meaning given by article 63F(3) of the Regulated Activities Order;

individual pension contract

means a pension policy or pension contract under which contributions are paid to:

(i)

a personal pension scheme approved under section 630 of the Income and Corporation Taxes Act 1988, whose sole purpose is the provision of annuities or lump sums under arrangements made by individuals in accordance with the scheme; or

(ii)

a retirement benefits scheme approved under section 591(2)(g) of the Income and Corporation Taxes Act 1988, for the provision of relevant benefits by means of an annuity contract made with an insurance company of the employee's choice;

insurance mediation activity

means any of the following activities specified in the Regulated Activities Order which is carried on in relation to a contract of insurance or rights to or interests in a life policy:

(i)

dealing in investments as agent;

(ii)

arranging (bringing about) deals in investments;

(iii)

making arrangements with a view to transactions in investments;

(iv)

assisting in the administration and performance of a contract of insurance;

(v)

advising on investments;

(vi)

agreeing to carry on a regulated activity in (a) to (e) above;

insurance mediation officer

means the individual within the management structure of the firm who is responsible for an insurance mediation activity;

investment

means any of the investments specified in Part III of the Regulated Activities Order;

investment trust

means a closed-ended company which is listed in the UK or another member state and:

(i)

is approved by the Inland Revenue under section 842 of the Income and Corporation Taxes Act 1988 (or, in the case of a newly formed company, has declared its intention to conduct its affairs so as to obtain approval); or

(ii)

is resident in another member state and would qualify for approval if resident and listed in the UK;

investment trust savings scheme

means a dedicated service for investment in the securities of one or more investment trusts within a particular marketing group (and references to an investment trust savings scheme include references to securities to be acquired through that scheme);

ISA

means a scheme of investment satisfying the conditions prescribed in the Individual Savings Account Regulations 1998 (S.I. 998/1870);

life office

means a person with permission to effect or carry out long-term insurance contracts;

life policy

means a long-term insurance contract other than a pure protection contract or a reinsurance contract, but including a pension policy;

long-term care insurance contract

has the meaning given in article 1 of the Financial Services and Markets Act 2000 (Regulated Activities) (Amendment)(No 2) Order 2003;

long-term insurance contract

has the meaning given in Part II of Schedule 1 to the Regulated Activities Order;

market making

means where a firm holds itself out as willing, as principal, to buy, sell or subscribe for investments of the kind to which the transaction relates at prices determined by the firm generally and continuously rather than in respect of each particular transaction;

non-registered European lawyer

means a member of a profession covered by the Establishment of Lawyers Directive 98/5/EC who is based entirely at an office or offices outside England and Wales and who is not a solicitor, registered European lawyer or registered foreign lawyer;

occupational pension scheme

means any scheme or arrangement which is comprised in one or more documents or agreements and which has, or is capable of having, effect in relation to one or more descriptions or categories of employment so as to provide benefits, in the form of pensions or otherwise, payable on termination of service, or on death or retirement, to or in respect of earners with qualifying service in an employment of any such description or category;

opt-out

means a transaction resulting from a decision by an individual to opt-out of or decline to join a final salary or money-purchase occupational pension scheme of which he or she is a current member, or which he or she is, or at the end of a waiting period will become, eligible to join, in favour of an individual pension contract or contracts;

packaged product

means a life policy, a unit or share in a regulated collective investment scheme, or an investment trust savings scheme whether or not held within an ISA or PEP, or a stakeholder pension scheme;

partner

means a person who is or is held out as a partner in a partnership;

partnership

means an unincorporated body in which persons are or are held out as partners and does not include a body incorporated as an LLP;

pension contract

means a right to benefits obtained by the making of contributions to an occupational pension scheme or to a personal pension scheme, where the contributions are paid to a regulated collective investment scheme;

pension policy

means a right to benefits obtained by the making of contributions to an occupational pension scheme or to a personal pension scheme, where the contributions are paid to a life office;

pension transfer

means a transaction resulting from a decision by an individual to transfer deferred benefits from a final salary occupational pension scheme, or from a money-purchase occupational pension scheme, in favour of an individual pension contract or contracts;

PEP

means a personal equity plan within the Personal Equity Plan Regulations 1989;

personal pension scheme

means any scheme or arrangement which is not an occupational pension scheme or a stakeholder pension scheme and which is comprised in one or more instruments or agreements, having or capable of having effect so as to provide benefits to or in respect of people on retirement, or on having reached a particular age, or on termination of service in an employment;

plan provider

has the meaning given by article 63B(3) of the Regulated Activities Order read with paragraphs (7) and (8) of that article;

professional services

means services provided by a firm in the course of its practice and which do not constitute carrying on a regulated activity;

pure protection contract

(i)

A long-term insurance contract:

(A)

under which the benefits are payable only in respect of death or of incapacity due to injury, sickness or infirmity;

(B)

which has no surrender value or the consideration consists of a single premium and the surrender value does not exceed that premium; and

(C)

which makes no provision for its conversion or extension in a manner which would result in its ceasing to comply with (a) or (b); or

(ii)

a reinsurance contract covering all or part of a risk to which a person is exposed under a long-term insurance contract;

registered foreign lawyer

means an individual registered with the SRA under section 89 of the Courts and Legal Services Act 1990;

Regulated Activities Order

means the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001;

regulated activity

means an activity which is specified in the Regulated Activities Order; 

regulated collective investment scheme

means:

(i)

an investment company with variable capital;

(ii)

an authorised unit trust scheme as defined in section 237(3) of FSMA; or

(iii)

a scheme recognised under sections 264, 270 or 272 of FSMA;

regulated home purchase plan

has the meaning given by article 63F(3) of the Regulated Activities Order;

regulated home reversion plan

has the meaning given by article 63B(3) of the Regulated Activities Order;

regulated mortgage contract

has the meaning given by article 61(3) of the Regulated Activities Order;

regulated sale and rent back agreement

has the meaning given by article 63J(3) of the Regulated Activities Order;

reinsurance contract

means a contract of insurance covering all or part of a risk to which a person is exposed under a contract of insurance;

reversion seller

has the meaning given by article 63B(3) of the Regulated Activities Order;

security

has the meaning given by article 3(1) of the Regulated Activities Order but does not include an investment which falls within the definition of a packaged product;

stakeholder pension scheme

means a scheme established in accordance with Part I of the Welfare and Pensions Reform Act 1999 and the Stakeholder Pension Scheme Regulations 2000; and

transaction

means the purchase, sale, subscription or underwriting of a particular investment.

8.2

In these rules references to statutes, rules, codes or regulations, statements or principles etc other than these rules include any modification or replacement thereof.

8.3

As the context requires, other words and expressions shall have the meanings assigned to them by the Interpretation Act 1978, FSMA and the SA.

8.4

References in these rules to activities carried on by a firm include activities carried on by an individual as sole principal, manager or employee of the firm.