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Status: You are viewing the version of the handbook as on 2005-06-30.

SUP 10.5 Significant influence functions

What are the significant influence functions?

The first condition

SUP 10.5.2R

Each significant influence function is one which is likely to result in the person responsible for its performance exercising a significant influence on the conduct of a firm's affairs, so far as relating to a regulated activity of the firm.

SUP 10.5.3G

SUP 10.5.2 R gives effect to section 59(5) of the Act (where this provision is referred to as the first condition).

SUP 10.5.4G

Whether a functionis likely to result in the person responsible for its performance exercising significant influence on the conduct of the firm's affairs is a question of fact in each case. The FSA has identified the significant influence functions as satisfying this condition. What amounts to exercising significant influence in any particular case will depend on the circumstances. The person performing one of these functions is likely to play a part in ensuring that effective governance structures, systems and controls are developed and operated. In relation to a firm as a whole, this is expected to include setting the business strategy, regulatory climate and ethical standards of the firm. In relation to a branch, this will include ensuring that the firm's strategy (as it affects the branch) is appropriate in the context of the UK regulatory system, and setting the regulatory climate and ethical standards of the branch in the United Kingdom.

Periods of less than 12 weeks

SUP 10.5.5R

If:

  1. (1)

    a firm appoints an individual to perform a function which, but for this rule, would be a significant influence function;

  2. (2)

    the appointment is to provide cover for an approved person whose absence is:

    1. (a)

      temporary; or

    2. (b)

      reasonably unforeseen; and

  3. (3)

    the appointment is for less than 12 weeks in a consecutive 12 month period;

the description of the relevant significant influence function does not relate to those activities of that individual.

SUP 10.5.6G

SUP 10.5.5 R enables cover to be given for, say, holidays and emergencies and avoids the need for the precautionary approval of, for example, a deputy. However, as soon as it becomes apparent that a person will be performing a controlled function for more than 12 weeks, the firm should apply for approval.