2. 2. Consideration and Assessment of Applications
As set out in GEN Rule 5.2.7, the applicant shall demonstrate to the satisfaction of the Regulator that it:(a) has adequate and appropriate resources, including financial resources;(b)is fit and proper;(c) is capable of being effectively supervised; and(d)has adequate compliance arrangements, including policies and procedures, that will enable it to comply with all the applicable legal requirements.
In assessing the adequacy and appropriateness of an applicant's resources, systems and controls, the Regulator will consider the risks posed by the applicant taking into account the nature, size and complexity of the proposed activities. For instance, a Start-up entity1 without relevant track record may seek authorisation to conduct Dealing Activities, subject to certain restrictions and other conditions to limit the scale and impact of its activities.
1 A "Start-up" entity is:(a) any newly set up business entity which is not part of a Group subject to financial services regulation; or(b) any existing business entity which, or whose Group is not subject to financial services regulation.
The Regulator will apply a risk-based assessment according to the categories of dealers ("Dealers") as set out in Table 1 below. The applicant should ensure that the category it chooses accommodates its needs over a reasonable timeframe.
Table 1 — Categories of Dealers
Category Permissible Activities Retail Dealer Dealing in investments with or for all types of Clients, including Retail Clients. Institutional Dealer Dealing in investments only with or for Professional Clients in the ordinary course of business. Restricted Dealer Dealing in investments only with or for Professional Clients and:• does not carry any customers' positions or accounts on its own books2; and• does not receive, hold or control Client Assets.
2 This includes any intra-day positions pending settlement or undertaking of settlement risks.