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REC 3.4 Key individuals and internal organisation

Purpose

REC 3.4.1G

The purpose of REC 3.4 is to enable the FCA3 to monitor changes in the arrangements a UK recognised body makes for the carrying out of its relevant functions or for overseeing the work of key individuals or departments responsible for its relevant functions.

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Key individuals

REC 3.4.2R

[deleted]3

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REC 3.4.2AR

1Where, in relation to a UK RIE a proposal has been made to appoint or elect a person as a key individual, that UK RIE must at least 30 days before the date of the appointment or election give notice of that event, and give the information specified for the purposes of this rule in REC 3.4.4A R to the FCA.3

[Note: Article 37(1), paragraph 1, second sentence of MiFID]

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REC 3.4.2BR

1Where, in relation to a UK RIE a person has resigned as, or has ceased to be, a key individual, that UK RIE must immediately give notice of that event, and give the name of the person.

[Note: Article 37(1), paragraph 1, second sentence ofMiFID]

REC 3.4.3G
  1. (1)

    Key individuals include the persons who, under the operational or managerial arrangements of the UK recognised body, are appointed to manage the departments responsible for carrying out its relevant functions, whether or not they are members of its governing body. A person appointed to carry out specific tasks, such as to conduct a particular investigation into a specific set of facts, would not usually be a key individual.

  2. (2)

    A key individual need not be an employee of a UK recognised body. For example, an employee of an undertaking in the same group or a self-employed contractor of a UK recognised body might be a key individual, depending on the role he plays in that body.

  3. (3)

    A department of a UK recognised body should be regarded as responsible for carrying out a relevant function if it is responsible for any activity or activities which form a significant part of a relevant function or which make a significant contribution to the performance of a relevant function.

  4. (4)

    The FCA3 does not need to be notified where minor changes are made to the responsibilities of a key individual, but where a major change in responsibilities is made which amounts to a new appointment, the FCA3 should be notified under REC 3.4.2A R.3

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REC 3.4.4R

[deleted]3

REC 3.4.4AR

1The following information is specified for the purposes of REC 3.4.2A R:

  1. (1)

    that person's name;

  2. (2)

    his date of birth;

  3. (3)

    where applicable, a description of the responsibilities which he will have in the post to which he is to be appointed or elected, including for a UK RIE which operates an RAP where the person has responsibilities both in the UK RIE and RAP, a description of the responsibilities he has in respect of each body.3

[Note: Article 37(1), paragraph 1, second sentence of MiFID]

Standing committees

REC 3.4.5R

Where the governing body of a UK recognised body delegates any of its functions (which relate to that UK recognised body'srelevant functions) to a standing committee, or appoints a standing committee to manage or oversee the carrying out of any of that UK recognised body'srelevant functions, that UK recognised body must immediately notify the FCA3 of that event and give the FCA3 the following information:

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  1. (1)

    the names of the members of that standing committee; and

  2. (2)

    the terms of reference of that standing committee (including a description of any powers delegated to that committee and any conditions or limitations placed on the exercise of those powers).

REC 3.4.6R

Where:

  1. (1)

    there is any change in the composition or the terms of reference of any standing committee referred to in REC 3.4.5 R; or

  2. (2)

    any such committee is dissolved;

the UK recognised body must immediately notify the FCA3 of that event and give particulars of any change referred to in (1) to the FCA.3

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REC 3.4.7G
  1. (1)

    Standing committees include permanent committees with executive, supervisory, policy-making or rule-making responsibilities. Committees appointed for particular tasks or committees established for purely consultative or advisory purposes would not usually be considered to be standing committees.

  2. (2)

    Committees which include persons who are not members of the governing body can be standing committees.