COND 1.2 Purpose

COND gives guidance on the threshold conditions. The FCA threshold conditions represent the minimum conditions for which the FCA is responsible, which a firm is required to satisfy, and continue to satisfy, in order to be given and to retainPart 4A permission. A PRA-authorised person or, as appropriate, a firm seeking to become a PRA-authorised person must also satisfy, and continue to satisfy, the threshold conditions for which the PRA is responsible in order to be given and to retain Part 4A permission (these threshold conditions are not the subject of the guidance in COND).

1. (1)

   Under section 55B(3) of the Act, in giving or varying a Part 4A permission, imposing or varying any requirement or giving consent, the FCA must ensure that the firm concerned will satisfy, and continue to satisfy, the FCA threshold conditions in relation to all of the regulated activities for which it has or will have permission.

2. (2)

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1. (1)

   If, among other things, a firm is failing to satisfy any of the FCA threshold conditions , or is likely to fail to do so, the FCA may exercise its own-initiative powers under either section 55J (Variation or cancellation on initiative of regulator) or section 55L (Imposition of requirements by FCA) of the Act . Use of the FCA's own-initiative powers is explained in SUP 7 (Individual requirements), and SUP 6B (Variation and cancellation of permission on the FCA's own initiative and intervention against incoming firms).

2. (2)

   If, when exercising its own-initiative powers under section 55J or section 55L of the Act , the FCA varies a firm's permission , or imposes or varies a requirement , then, under section 55B(3) of the Act , the FCA must ensure that the firm concerned will satisfy, and continue to satisfy, the FCA threshold conditions in relation to all of the relevant regulated activities for which it has or will have permission . However, section 55B(4) of the Act states that the duty imposed by section 55B(3) of the Act does not prevent the FCA taking such steps as it considers necessary in relation to a particular firm in order to advance any of its operational objectives.

3. (3)

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1. (1)

   Under section 185 of the Act (Assessment: general) the FCA may, subject to consultation with the PRA where the conditions in section 187B of the Act are satisfied, object to an acquisition of an FCA-authorised person if there are reasonable grounds to do so on the basis of the matters set out in section 186 of the Act (Assessment: criteria) or if the information provided by the section 178 notice giver is incomplete. Section 186(d) of the Act (Assessment: criteria) specifies one such criteria as whether an FCA-authorised person will be able to comply with its prudential requirements (including the threshold conditions in relation to all of the regulated activities for which it has, or will have, permission.)

2. (2)

   Under section 191A of the Act (Objection to control), subject to consultation with the PRA in the circumstances specified in that provision, the FCA may object to a person's existing control of an FCA-authorised person on the grounds specified under section 186 of the Act.