To: All Managing Agency Compliance Officers. Cc: Heads of Legal
Model TOBA "acceptance by conduct" letter
At the Managing Agency Compliance Officers Group meeting on 11 April, the matter of entering into new TOBA arrangements by conduct was raised. This was referred to as a possible option for entering into new TOBAs in the joint LMA, IUA, LIIBA Explanatory Note published with the TOBA pack in December 2011: see bulletin LTM11-032-KK.
I attach for information the model “acceptance by conduct” letter referred to in the Explanatory Note.
Needless-to-say, the “acceptance by conduct” process would have to be set up and monitored carefully to ensure it is effective and time-saving in the long-run.
The Explanatory Note also refers to the usual agreement process: sending out two copies of the new TOBA to the broker, signed by yourselves, asking the broker to countersign both and return one of them. “Agreement by conduct” would avoid the chasing process, but you would have to make sure the broker receives the TOBA (signed by yourselves), ideally having identified an appropriate member of the broker’s staff (e.g. Compliance Officer or Head of Legal), and you would have to log acceptance by your managing agency of a slip placed by that broker after the selected date (see the model letter) to record the commencement date of the new TOBA. The selected date would need to give the broker sufficient time to consider the new TOBA and respond with any questions.
We would recommend that you take advice on entering into the new TOBAs, as you believe appropriate.
Please let me know if you have any general questions regarding this.
Kees van der Klugt
Head, Legal and Compliance