SUP 10A.13 Application for approval and withdrawing an application for approval
When to apply for approval
In accordance with section 59 of the Act (Approval for particular arrangements), where a candidate will be performing one or more FCA controlled functions, a firm must take reasonable care to ensure that the candidate does not perform these functions unless he has prior approval from the FCA.
Failure to apply for approval
If a person performs an FCA controlled function without approval it is not only the firm that is accountable. Under section 63A of the Act (Power to impose penalties), if the FCA is satisfied that:
- (1)
a person (“P”) has at any time performed an FCA controlled function without approval; and
- (2)
at that time P knew, or could reasonably be expected to have known, that P was performing an FCA controlled function without approval;
it may impose a penalty on P of such amount as it considers appropriate.
How to apply for approval
An application by a firm for the FCA's approval under section 59 of the Act (Approval for particular arrangements) must be made by completing Form A (except where SUP 10A.14.4 D requires a Form E).
3If a firm must make an application using Form A, it must use Form A (shortened form) if:
- (1)
the candidate:
- (a)
has current approved person approval to perform:
- (i)
an FCA controlled function that is a significant influence function; or
- (ii)
- (iii)
a PRA controlled function; or
- (i)
- (b)
has had current approved person approval of the type described in (a) within the previous six months; and
- (a)
- (2)
there have been no matters arising in relation to the fitness and propriety of the person to whom the application relates which mean that the information provided to the FCA or the PRA regarding fitness and propriety in connection with the current approved person approval in (1)(a) or (b) may have changed since the application for that current approved person approval was made.
3A firm must not use Form A (shortened form) if:
- (1)
the firm is a MiFID investment firm (except a credit institution); and
- (2)
SUP 10A.14.4BD applies to that application.
SUP 10A.16.1 D explains how applications should be submitted.
2When a MiFID investment firm (except a credit institution) notifies the FCA of a change using Form A or Form E, they must also submit the MiFID Article 4 APER Information Form. The details can be found in SUP 10A.14.4BD.
Who should make the application?
- (1)
In accordance with section 60 of the Act (Applications for approval), applications must be submitted by, or on behalf of, the firm itself, not by:
- (a)
- (b)
(where the FCA candidate works for the firm's parent undertaking or holding company) by the firm's parent undertaking or holding company.
- (2)
Usually this will be the firm that is employing the FCA candidate to perform the FCA controlled function. Where a firm has outsourced the performance of an FCA controlled function, the details of the outsourcing determine where responsibility lies and whom the FCA anticipates will submit FCA-approved persons application forms. SUP 10A.13.6 G describes some common situations. The firm which is outsourcing is referred to as "A" and the person to whom the performance of the FCA controlled function has been outsourced, or which makes the arrangement for the FCA controlled function to be performed, is referred to as "B". In each situation, A must take reasonable care to ensure that, in accordance with section 59(2) of the Act, no person performs an FCA controlled function under an arrangement entered into by its contractor in relation to the carrying on by A of a regulated activity, without approval from the FCA. See also SYSC 8.1.1 R3.
Outsourcing arrangements
Outsourcing arrangements |
Submitting form |
|
The FCA will consider A to have taken reasonable care if it enters into a contract with B under which B is responsible for ensuring that the relevant FCA controlled functions are performed by FCA-approved persons, and that it is reasonable for A to rely on this |
Firm B submits FCA-approved persons forms on behalf of firm A |
|
Outsourcing by A to B (both being a member of the same United Kingdom group and each having its registered office in the United Kingdom) |
See SUP 10A.3.4 G |
See SUP 15.7.8 G |
(i) A to B, where B is a non-authorised person not part of the same group as A (ii) A to B, where A is a branch of an overseas firm in the United Kingdom, and B is an overseas undertaking of the same group (iii) A to B, where A is a UK authorised subsidiary of an overseas firm and B is an overseas undertaking of the same group |
Responsibility for (as opposed to the performance of) any activity outsourced to B will remain with A. See 3SYSC 8 |
A ensures that an individual approved by the FCA 3under a controlled function that is a significant-influence function has responsibility for the outsourced arrangement and A submits a form in relation to that individual |
Where the notification of an appointed representative (SUP 12.7.1 R) is linked to an application for approval (SUP 10A.13 (Applications for approval and withdrawing an application for approval)), any delay in receiving the notification under SUP 12.7.1 R may delay the FCA's approval of the individuals employed by that appointed representative who will be performing FCA controlled functions for the firm.
Processing an application
In any case where the application for approval is made by a person applying for permission under Part 4A of the Act, the FCA has until the end of whichever of the following periods ends last:
- (1)
the period within which an application for that permission must be determined; and
- (2)
the period of three months from the time it receives a properly completed application.
In any other case it is the period of three months from the time it receives a properly completed application.
The FCA must either grant the application or, if it proposes not to grant an application, issue a warning notice (see DEPP 2). The FCA will deal with cases more quickly than this whenever circumstances allow and will try to meet the standard response times published on the website and in its Annual Report. However, if an application is incomplete when received, or the FCA has knowledge that, or reason to believe that, the information is incomplete, then the processing time will be longer than the published standard response times.
Application forms must always be completed fully and honestly. Further notes on how to complete the form are contained in each form. If forms are not completed fully and honestly, applications will be subject to investigation and the FCA candidate's suitability to be approved to undertake an FCA controlled function will be called into question. A person who provides information to the FCA that is false or misleading may commit a criminal offence, and could face prosecution under section 398 of the Act regardless of the status of their application.
Before making a decision to grant the application or give a warning notice, the FCA may ask the firm for more information about the FCA candidate. If it does this, the three-month period in which the FCA must determine a completed application:
The FCA may grant an application only if it is satisfied that the FCA candidate is a fit and proper person to perform the FCA controlled function stated in the application form. Responsibility lies with the firm making the application to satisfy the FCA that the FCA candidate is fit and proper to perform the FCA controlled function applied for.
For further guidance on criteria for assessing whether a FCA candidate is fit and proper, see FIT.
Decisions on applications
Whenever it grants an application, the FCA will confirm this in writing to all interested parties.
If the FCA proposes to refuse an application in relation to one or more FCA controlled functions, it must follow the procedures for issuing warning and decision notices to all interested parties. The requirements relating to warning and decision notices are in DEPP 2.