Which section of the FCA's Handbook addresses rules regarding close links with other organisations?

The correct section of the FCA's Handbook that addresses the rules regarding close links with other organizations is the one that deals with threshold conditions. Threshold conditions outline the essential requirements that firms must meet in order to obtain and retain authorization to conduct regulated activities. This includes ensuring that firms have appropriate relationships with other entities and that these relationships do not compromise their ability to operate in a sound and prudent manner.

Close links with other organizations can affect a firm’s stability and risk profile, which is why they are covered under the threshold conditions. This section ensures that firms have the necessary governance and control in place to manage risks associated with interconnectedness, thus promoting the integrity and orderly functioning of markets.

The other options, while relevant to different aspects of regulation, do not specifically focus on the concept of close links. For instance, the approved persons section pertains to the individual responsibilities and conduct of key individuals within firms, while principles for businesses cover overarching standards of conduct expected by organizations. Senior management arrangements, systems, and controls address governance structures and operational procedures but do not explicitly highlight issues around close links in the same way threshold conditions do.