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Status: You are viewing the version of the handbook as on 2016-02-03.

SUP 10A.11 Minimising overlap with the PRA approved persons regime

Introduction

SUP 10A.11.1GRP

SUP 10A.11 deals with how the FCA's approved persons regime applies to PRA-authorised persons. SUP 10A.11 therefore only applies if the firm in question is a PRA-authorised person.

SUP 10A.11.2GRP

Both the FCA and the PRA may specify a function as a controlled function in relation to a PRA-authorised person. However, only the FCA has power to specify a customer-dealing function as a controlled function.

SUP 10A.11.3GRP

Therefore, if a person's job for a firm involves:

  1. (1)

    an FCA controlled function, the firm should apply to the FCA for approval;

  2. (2)

    a PRA controlled function, the firm should apply to the PRA for approval;

  3. (3)

    both an FCA controlled function and a PRA controlled function, the firm should apply to both the FCA and the PRA for approval (the purpose of SUP 10A.11 is to cut down the need for this sort of dual approval).

SUP 10A.11.4GRP

The PRA cannot give its approval for the performance of a PRA controlled function without the consent of the FCA. The firm does not need to apply to the FCA for that consent. The PRA must as soon as practicable notify the FCA of the receipt or withdrawal of an application to the PRA.

SUP 10A.11.5GRP

Under section 59B of the Act (Role of FCA in relation to PRA decisions) the FCA may arrange with the PRA that in agreed cases the PRA may give approval without obtaining the consent of the FCA. No such arrangements are currently in force.

SUP 10A.11.6GRP

The FCA and PRA have coordinated their approved persons regime to reduce the amount of overlap. These arrangements relate to significant-influence functions only.

SUP 10A.11.7G

The FCA is under a duty under section 59A of the Act (Specifying functions as controlled functions: supplementary) to exercise the power to specify any significant-influence function as an FCA controlled function in a way that it considers will minimise the likelihood that approvals fall to be given by both the FCA and the PRA in respect of the performance by a person of significant-influence functions in relation to the same PRA-authorised person.

Guidance on how SUP 10A.11 works

SUP 10A.11.8GRP

SUP 10A.11 disapplies the apportionment and oversight function for a person who is the subject of an application for approval to perform a PRA governing function, subject to certain conditions set out in SUP 10A.11.11 R. Where this is the case the apportionment and oversight function is included in the PRA governing function for which the person has approval. SUP 10B.7 of the PRA's Handbook deals with this.

SUP 10A.11.9G

SUP 10A.11.10 G gives some examples of how SUP 10A.11 works.

SUP 10A.11.10G

Table: Examples of how the need for dual FCA and PRA approval in relation to PRA-authorised persons is reduced

Example

Whether FCA approval required

Whether PRA approval required

Comments

(1) A is being appointed chief executive and the person performing the apportionment and oversight function.

No.

Yes

The PRA chief executive function is expanded to include the apportionment and oversight function. To avoid the need for FCA approval, A’s appointment as the person performing the apportionment and oversight function should not take effect before PRA approval for the chief executive role.

(2) Same as (1) but the application to the PRA does not mention that it is also intended that A is perform what would otherwise be the apportionment and oversight function

Yes

Yes

SUP 10A.11 does not apply if the application for PRA approval does not say that A will also be performing what would otherwise be the apportionment and oversight function.

(3) A is appointed as chief executive. Later, he is appointed to perform the apportionment and oversight function while carrying on as chief executive.

Yes, when he is appointed to perform the apportionment and oversight function

Yes, when he takes up the chief executive role

(4) A is appointed to perform the apportionment and oversight function. He later becomes the chief executive.

Yes, when he is appointed to perform the apportionment and oversight function.

Yes, when he becomes the chief executive

When A is appointed as chief executive he retains his status as an FCA-approved person.

(5) A is being appointed as director and as the person performing the apportionment and oversight function. Later, he becomes chief executive (but carries on with the apportionment and oversight function).

On being appointed director, see the answers to (1) and (2). No FCA approval is needed when A becomes chief executive; the apportionment and oversight function remains switched off when A takes up the role of chief executive. The application to the PRA should say that A is performing what would otherwise be the apportionment and oversight function.

Yes

(6) A is appointed as chief executive and to perform the apportionment and oversight function at the same time. Later, A gives up his role as chief executive but carries on performing the apportionment and oversight function role.

On A’s first appointment, No. But when A gives up the role as chief executive, FCA approval is needed to perform the apportionment and oversight function. Form E should be used. The application should state that it is being made as a result of ceasing to perform a PRA controlled function when the rule in SUP 10B.7.4 R of the PRA's Handbook applies.

Form A should be used if there have been changes in fitness of the approved person (SUP 10A.14.4D (3)).

On his first appointment, Yes.

Performing the apportionment and oversight function requires FCA approval. A does not have that approval because A did not need it when he was first appointed. The combined effect of SUP 10A.11 and SUP 10B.7 of the PRA's Handbook is that the firm has three months to secure approval by the FCA for A’s performance of the apportionment and oversight function . During that interim period, A keeps his status as a PRA-approved person performing the apportionment and oversight element of the PRA chief executive function which is included in that function under SUP 10B.7 of the PRA's Handbook. This is because SUP 10B.7.4 R in the PRA's Handbook says that during this transitional period he is still treated as performing the PRA chief executive function and SUP 10A.11 says that for as long as he is performing a PRA governing function he does not perform the apportionment and oversight function.

The main rule

SUP 10A.11.11R

A person (referred to as A in this rule) is not performing the apportionment and oversight function in relation to a PRA-authorised person (referred to as B in this rule), at a particular time, if:

  1. (1)

    A has been approved by the PRA to perform any PRA governing function in relation to B;

  2. (2)

    throughout the whole of the period between the time of the PRA approval in (1) and the time in question A has been the subject of a current PRA approved person approval to perform a PRA governing function in relation to B;

  3. (3)

    at the time of the PRA approval referred to in (1), A was not subject to a current FCA approved person approval to perform the apportionment and oversight function in relation to B; and

  4. (4)

    at the time of the PRA approval referred to in (1), A had not started to perform what would otherwise have been the apportionment and oversight function (the FCA function) and, as part of the application for the PRA approval referred to in (1), B notified thePRA that A would start to perform the FCA function at or around the time of the PRA approval in (1).