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Status: You are viewing the version of the handbook as on 2009-03-31.

CRED 4.2 Apportionment of responsibilities

CRED 4.2.1G

Under SYSC 2.1.1 R11 every firm is required to take reasonable care to maintain an appropriate apportionment of significant responsibilities among its directors and senior managers, so that it is clear who has those responsibilities and so the firm can be governed adequately.

CRED 4.2.2G

In order to comply with the requirements, a credit union will need to be clear who is responsible for which significant matters within the credit union.

CRED 4.2.3G

Among the significant responsibilities to be apportioned will be responsibility for:

  1. (1)

    finance;

  2. (2)

    lending;

  3. (3)

    arrears control;

  4. (4)

    money laundering reporting;

  5. (5)

    complaints handling.

CRED 4.2.4G

SYSC 2.1.3 R requires that the actual task of apportioning significant responsibilities to different people must itself be allocated by the credit union to one or more individuals to carry out. The task of overseeing the establishment and maintenance of the credit union's systems and controls would normally be allocated to the same individual or individuals. However, it would be possible to allocate the overseeing function to different individuals as long as this was appropriate.

CRED 4.2.5G

Together these tasks are known as the apportionment and oversight function.

CRED 4.2.6G

An individual to whom a function is allocated under SYSC 2.1.3 R will be performing the apportionment and oversight function (see CRED 6.3.8 G) and an application must be made to the FSA for approval of the individual before the function is performed (see CRED 13.7).

CRED 4.2.7G

CRED 2.1.4 requires that the apportionment and oversight function must be allocated to the credit union'schief executive where there is one. 'Chief executive' in this context means an employee who alone, or jointly with others, is responsible under the immediate authority of the committee of management for the conduct of the whole business of the credit union. In smaller credit unions, this would include any manager or person who is entrusted with the whole of the day to day running of the credit union even if the title 'chief executive' is not used.

CRED 4.2.8G

The apportionment and oversight function may be allocated to one or more members of the credit union's committee of management in addition to the chief executive, or where there is no chief executive (see also CRED 4.3.17 G).

CRED 4.2.9G

The allocation of the apportionment and oversight function to one or two individuals is likely to be appropriate for most firms, including many credit unions. However, it would be possible to allocate the function to every member of the credit union's committee of management as long as that allocation remained appropriate.

CRED 4.2.10G

If the allocation is to more than one person they may perform the apportionment and oversight function, or aspects of the function, separately. So, for example, one individual may have specific responsibility for the apportionment of responsibilities, whilst somebody else may have specific responsibility for overseeing the establishment and maintenance of the credit union's systems of control.

CRED 4.2.11G

Under SYSC 2.2.1 R, all credit unions are required to maintain a record of the arrangements they have made to satisfy the requirements to apportion significant responsibilities and allocate the apportionment and oversight function. Where responsibilities have been allocated to more than one person, the record will need to show clearly how those responsibilities are shared or divided. These records must be retained for six years after being replaced by a more up-to-date record.

CRED 4.2.12G

Most credit unions should be able to comply with the requirements of SYSC 2.2.1 R by means of records they already keep for their own purposes (for example, job descriptions, organisation charts, committee constitutions and terms of reference).