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Status: Please note you should read all Brexit changes to the FCA Handbook and BTS alongside the main FCA transitional directions. Where these directions apply the 'standstill', firms have the choice between complying with the pre-IP completion day rules, or the post-IP completion day rules. To see a full list of Handbook modules affected, please see Annex B to the main FCA transitional directions.

SUP 10A.1 Application

General

SUP 10A.1.1 R RP

21This chapter applies to SMCR firm with respect to their appointed representatives.18

5 14
SUP 10A.1.1A G RP

5 SUP 10C deals with the approved persons regime for SMCR firms themselves13.

SUP 10A.1.2 G RP

This chapter is also relevant to18:5

  1. (1)

    FCA-approved person of an appointed representative of an SMCR firm18; and5

    13
  2. (2)

    18an appointed representative of an SMCR firm13.5

SUP 10A.1.3 G RP

The rules in this chapter specify descriptions of FCA controlled functions under section 59 of the Act (Approval for particular arrangements).

SUP 10A.1.4 G RP

The directions in this chapter relate to the manner in which a firm must apply for the FCA's approval under section 59 of the Act and other procedures.

Overseas appointed representatives: UK services

SUP 10A.1.5 R RP
  1. (1)

    This chapter does not apply in relation to an overseas appointed representative in relation to regulated activities which are carried on in the United Kingdom other than from an establishment maintained by it or its principal in the United Kingdom.18

  2. (2)

    An overseas appointed representative means an appointed representative which has its registered office (or, if it has no registered office, its head office) outside the United Kingdom.18

Overseas appointed representatives: UK establishments

SUP 10A.1.6 R RP
  1. (-1)

    Only the following FCA governing functions (as modified by this rule) apply in relation to an overseas appointed representative which maintains (or whose principal maintains) an establishment in the United Kingdom from which regulated activities are carried on: 18

    1. (a)

      the director function;18

    2. (b)

      the non-executive director function; and18

    3. (c)

      the chief executive function.18

  2. (1)

    The18director function only applies to the extent that18 the person performing that function:

    1. (a)

      has responsibility for the regulated activities of the UK establishment18 which are likely to enable them18 to exercise significant influence over that establishment18; or

    2. (b)

      is someone whose decisions or actions are regularly taken into account by the governing body of that establishment.18

  3. (2)

    The18non-executive director function only applies to the extent that18 the person performing that function18:

    1. (a)

      has responsibility for the regulated activities of the18UK establishment18 which is likely to enable them18 to exercise significant influence over that establishment18; or

    2. (b)

      is someone whose decisions or actions are regularly taken into account by the governing body of that establishment.18

  4. (3)

    [deleted]18

  5. (4)

    [deleted]18

  6. (5)

    [deleted]18

  7. (6)

    [deleted]18

  8. (7)

    [deleted]18

  9. (8)

    An overseas appointed representative has the same meaning as in SUP 10A.1.5R.18

EEA firms

SUP 10A.1.7 R RP

This chapter does not apply in relation to the appointed representative of: an EEA SMCR firm20

if and in so far as the question of whether a person is fit and proper to perform a particular function in relation to that firm is reserved to an authority in a country or territory outside the United Kingdom as contemplated by section 59(8) of the Act. This rule has effect to the extent that, and for as long as, section 59(8) of the Act remains in effect under the standstill direction (as it relates to that section) as defined in the direction made by the FCA under Part 7 of the Financial Services and Markets Act 2000 (Amendment) (EU Exit) Regulations 2019 that came into force on IP completion day and is titled “Main FCA Transitional Directions”.20

19 12
SUP 10A.1.8 G RP

[deleted]20

5 13
SUP 10A.1.9 G RP

[deleted]18

13 13
SUP 10A.1.10 G RP

[deleted]18

Incoming EEA firms: passported activities from a branch

SUP 10A.1.11 R RP

Only the following FCA controlled functions apply to an incoming EEA firm with respect to its passported activities carried on from a branch in the United Kingdom:

  1. (3)

    the customer function other than where this relates to the function in SUP 10A.10.7R (4) and (7).

SUP 10A.1.12 R RP

[deleted]13

Incoming EEA firms etc with top-up permission activities from a UK branch

SUP 10A.1.13 R RP

In relation to the activities of a firm for which it has a top-up permission, only the following FCA controlled functions apply:

  1. (1)

    the FCA required functions, other than the apportionment and oversight function and the compliance oversight function;

  2. (2)

    the significant management function, in so far as it relates to:

    1. (a)

      designated investment business other than dealing in investments as principal, disregarding article 15 of the Regulated Activities Order; or

    2. (b)

      processing confirmations, payments, settlements, insurance claims, client money and similar matters, in so far as this relates to designated investment business; and6

    3. (c)

      [deleted]6

  3. (3)

    the customer function.

SUP 10A.1.14 R RP

[deleted]18

Appointed representatives

SUP 10A.1.15 R RP

The descriptions of the following FCA controlled functions apply to an appointed representative of a firm, except in relation to CBTL business or 4an introducer appointed representative, as they apply to an FCA-authorised person:

  1. (1)

    the FCAgoverning functions, subject to SUP 10A.1.16 R and except for a tied agent of an EEAMiFID investment firm; and

  2. (2)

    the customer function other than in relation to acting in the capacity of an investment manager (see SUP 10A.10.7R (6)).

SUP 10A.1.16 R RP
  1. (1)

    This chapter is18 is modified in relation to an appointed representative meeting the conditions in (2) so that only one of the following FCA governing functions:

    1. (a)

      director function; or

    2. (b)

      chief executive function; or

    3. (c)

      partner function; or

    4. (d)

      director of unincorporated association function;

    applies, as appropriate, to an individual within that appointed representative who will be required to be an FCA-approved person.

  2. (2)

    The conditions are that:

    1. (a)

      the scope of appointment of the appointed representative includes insurance distribution activity11 in relation to non-investment insurance contracts or credit-related regulated activity3, but no other regulated activity; and

    2. (b)

      the principal purpose of the appointed representative is to carry on activities other than regulated activities.

SUP 10A.1.16A R RP

3

  1. (-1)

    The customer function is the only controlled function in this chapter that applies to an appointed representative that is an SMCR firm and has a limited permission to carry on a regulated activity prescribed for the purposes of section 39(1E)(a) of the Act.18

  2. (1)

    [deleted]18

  3. (2)

    The customer function applies to the appointed representative in relation to the carrying on of the regulated activity, for which it does not have permission, comprised in the business for which its principal has accepted responsibility.18

SUP 10A.1.16B R RP

[deleted]18

5 13
SUP 10A.1.16C G RP

Certain additional controlled functions apply to a firm in SUP 10A.1.16AR under SUP 10C (FCA senior managers regime for approved persons in SMCR firms).18

Senior management functions

SUP 10A.1.16D G RP
  1. (1)

    5Under section 59(6A) of the Act, if the FCA is satisfied that, in relation to the carrying on of a regulated activity by an SMCR firm13, a controlled function is a senior management function, the FCA must designate the function in its rules as a senior management function.

  2. (2)

    Generally, the FCA does not think that a person performing a function in this chapter18 will have sufficient responsibility for managing the affairs of the appointed representative’sprincipal (as opposed to managing the affairs of the appointed representative itself) to perform a senior management function.

  3. (3)

    Therefore:

    1. (a)

      the FCA has not designated any of the functions in this chapter18 as a senior management function; and

    2. (b)

      none of the functions in this chapter18 are designated senior management functions.

  4. (4)

    SUP 10C.1.8G (Appointed representatives13) explains that it is unlikely that SUP 10C (FCA senior managers13 regime for approved persons in SMCR firms13) will apply to approved persons working in appointed representatives of an SMCR firm13 in addition to this chapter.

SUP 10A.1.17 R RP

[deleted]17

SUP 10A.1.18 R RP

[deleted]17

SUP 10A.1.19 G RP

[deleted]17

Insolvency practitioners

SUP 10A.1.20 R RP

This chapter does not apply to a function performed by:

  1. (1)

    a person acting as an insolvency practitioner within the meaning of section 388 of the Insolvency Act 1986; or

  2. (2)

    a person acting as a nominee in relation to a voluntary arrangement under Parts I (Company Voluntary Arrangements) and VIII (Individual Voluntary Arrangements) of the Insolvency Act 1986; or

  3. (3)

    a person acting as an insolvency practitioner within the meaning of Article 3 of the Insolvency (Northern Ireland) Order 1989; or

  4. (4)

    a person acting as a nominee in relation to a voluntary arrangement under Parts II (Company Voluntary Arrangements) and VIII (Individual Voluntary Arrangements) of the Insolvency (Northern Ireland) Order 1989.

SUP 10A.1.21 G RP

[deleted]17

10 13
SUP 10A.1.21A G

[deleted]18

SUP 10A.1.22 R RP

[deleted]12

1
SUP 10A.1.23 G RP

[deleted]12

1
SUP 10A.1.24 G RP

[deleted]17

2 9
3
SUP 10A.1.25 R RP

[deleted]17

SUP 10A.1.26 R

[deleted]13

8
SUP 10A.1.27 G

[deleted]13

8
SUP 10A.1.28 R

[deleted]17

SUP 10A.1.29 R

[deleted]17

15
SUP 10A.1.30 R

[deleted]17

15
SUP 10A.1.31 G

[deleted]17

15
SUP 10A.1.32 G

[deleted]17

15

Obligations on firms

SUP 10A.1.33 G
  1. (1)

    17The requirements in this chapter about notifications and applications are addressed to firms. This18 means they are addressed18 to the appointed representative’s principal.

  2. (2)

    If an appointed representative has more than one principal, the requirements in (1) are addressed to the authorised approved person employer of the approved person in question.

Gibraltar firms

SUP 10A.1.34 R
  1. (1)

    20A firm that is a Gibraltar-based firm (as defined in GEN 2.3 (General saving of the Handbook for Gibraltar)) is treated as an EEA firm for the purposes of this chapter.

  2. (2)

    (1) is without prejudice to the generality of GEN 2.3.

SUP 10A.3 Provisions related to the Act

SUP 10A.3.1 R RP

A function is an FCA controlled function only to the extent that it is performed under an arrangement entered into by:

  1. (1)

    a firm; or

  2. (2)

    a contractor of the firm;

in relation to the carrying on by the firm of a regulated activity.

SUP 10A.3.2 G RP

Sections 59(1) and (2) of the Act provide that approval is necessary in respect of an FCA controlled function which is performed under an arrangement entered into by a firm, or its contractor (typically an appointed representative), in relation to a regulated activity.

SUP 10A.3.3 G RP

Arrangement is defined in section 59(10) of the Act as any kind of arrangement for the performance of a function which is entered into by a firm or any of its contractors with another person and includes the appointment of a person to an office, their1 becoming a partner, or their1 employment (whether under a contract of service or otherwise). 1

SUP 10A.3.4 G RP

[deleted]1

SUP 10A.3.5 G RP

The arrangement must be “in relation to” the carrying on of a regulated activity. Regulated activities are defined in the Glossary by reference to the Regulated Activities Order. This order prescribes the activities which are regulated activities for the purposes of the Act.

SUP 10A.4 Specification of functions

SUP 10A.4.1 R RP

Each of the functions described in SUP 10A.4.4 R (the table of FCA controlled function) is an FCA controlled function.

SUP 10A.4.2 R RP

[deleted]10

8 4 8 2 2
SUP 10A.4.2A G RP

[deleted]8

6
SUP 10A.4.3 G RP

The fact that a person may be FCA-approved for one purpose does not have the effect of bringing all his activities within that FCA controlled function.

SUP 10A.4.4 R RP

FCA controlled functions

8(FCA controlled functions for 10appointed representatives)

Type

CF

Description of FCA controlled function

FCA governing functions*

1

Director function

2

Non-executive director function

3

Chief executive function

4

Partner function

5

Director of unincorporated association function

9

9

9

9

9

9

9

9

9

9

9

7

7

1

7

7

1

9

9

9

10

10

10

Customer-dealing function 3

3

30

Customer function

*FCA significant-influence functions

SUP 10A.5 Significant-influence functions

What are the FCA significant-influence functions?

SUP 10A.5.1 G RP

Definition of FCA significant-influence function

SUP 10A.5.2 R RP

Each FCA significant-influence function is one which comes within the definition of a significant-influence function.

SUP 10A.5.3 R RP

A 1significant-influence function, in relation to the carrying on of a regulated activity by an appointed representative3, means a function that is likely to enable the person responsible for its performance to exercise a significant influence on the conduct of the appointed representative’s3 affairs, so far as relating to the activity.1

SUP 10A.5.4 G

[deleted]1

SUP 10A.5.5 G RP

Whether an FCA controlled function is likely to result in the person responsible for its performance exercising significant influence is a question of fact in each case. 3

SUP 10A.5.5A G

3A function is not a significant-influence function unless it also meets the requirements of SUP 10A.3.1R (Provisions related to the Act).

Periods of less than 12 weeks

SUP 10A.5.6 R RP

If:

  1. (1)

    a firm or its appointed representative3 appoints an individual to perform a function which, but for this rule, would be an FCA 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 FCA significant-influence function does not relate to those activities of that individual.

SUP 10A.5.7 G RP

SUP 10A.5.6 R enables cover to be given for, as an example, 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 an FCA controlled function for more than 12 weeks, the authorised approved person employer of the approved person in question3 should apply for approval.

SUP 10A.6 FCA governing functions

Introduction

SUP 10A.6.1 G RP
  1. (1)

    Every appointed representative8 will have one or more persons responsible for directing its affairs. These persons will be performing the FCA governing functions and will be required to be FCA-approved persons unless the application provisions in SUP 10A.1, or the particular description of an FCA controlled function, provide otherwise. For example, each director of a company incorporated under the Companies Acts will perform an FCA governing function.5

    32
  2. (2)

    [deleted]5

    332
  3. (3)

    [deleted]5

    332
SUP 10A.6.2 G RP

A sole trader does not fall within the description of the governing functions.

SUP 10A.6.2A G RP

[deleted]5

SUP 10A.6.3 R RP

[deleted]8

SUP 10A.6.4 G RP

[deleted]8

SUP 10A.6.5 G

[deleted]8

4 2
SUP 10A.6.6 G

[deleted]2

Director function (CF1)

SUP 10A.6.7 R RP

If an appointed representative8 is a body corporate (other than a limited liability partnership), the director function is the function of acting in the capacity of a director (other than non-executive director) of that appointed representative8.

SUP 10A.6.8 R RP
  1. (1)

    If an appointed representative8 is a body corporate (other than a limited liability partnership), the director function is also the function of acting in the capacity of a person:

    1. (a)

      who is a director, partner, officer, member (if the parent undertaking or holding company is a limited liability partnership), senior manager, or employee of a parent undertaking or holding company of the appointed representative8; and

    2. (b)

      whose decisions or actions are regularly taken into account by the governing body of the appointed representative8.

  2. (2)

    (1) does not apply if that parent undertaking or holding company has a Part 4A permission or is regulated by an EEA regulator.

  3. (3)

    (1) does not apply to the function falling into SUP 10A.6.13 R (non-executive director of the parent undertaking or holding company).

SUP 10A.6.9 G RP

[deleted]8

SUP 10A.6.10 G RP

A director can be a body corporate and may accordingly require approval as an FCA-approved person in the same way as a natural person may require approval.

SUP 10A.6.11 G RP

[deleted]5

SUP 10A.6.11A R RP

[deleted]5

2

Non-executive director function (CF2)

SUP 10A.6.12 R RP

If a an appointed representative8 is a body corporate, the non-executive director function is the function of acting in the capacity of a non-executive director of that appointed representative8.

SUP 10A.6.13 R RP
  1. (1)

    If an appointed representative8 is a body corporate, the non-executive director function is also the function of acting in the capacity of a person:

    1. (a)

      who is a non-executive director of a parent undertaking or holding company; and

    2. (b)

      whose decisions or actions are regularly taken into account by the governing body of the appointed representative8.

  2. (2)

    However, (1) does not apply if that parent undertaking or holding company has a Part 4A permission or is regulated by an EEA regulator.

SUP 10A.6.14 G RP

[deleted]8

SUP 10A.6.15 G RP

[deleted]5

SUP 10A.6.15A R RP

[deleted]5

SUP 10A.6.15B R RP

[deleted]5

SUP 10A.6.15C G RP

[deleted]5

Guidance on persons in a parent undertaking or holding company exercising significant influence

SUP 10A.6.16 G RP
  1. (1)

    The explanation in SUP 10C.5B.2G of the basis on which the group entity senior manager function is included as a controlled function for an SMCR firm is also relevant to7 the basis on which the director function and the non-executive director function are applied to persons who have a position with the appointed representative’s8parent undertaking or holding company under SUP 10A.6.8 R or SUP 10A.6.13 R.

  2. (2)

    The guidance in SUP 10C.5B.3G to SUP 10C.5B.5G about when the group entity senior manager function applies to an SMCR firm is also relevant to when those who have a position with an appointed representative’s8parent undertaking or holding company may be performing a controlled function under7SUP 10A.6.8 R or SUP 10A.6.13 R7.

Chief executive function (CF3)

SUP 10A.6.17 R RP

The chief executive function is the function of acting in the capacity of a chief executive of an appointed representative8.

SUP 10A.6.18 G RP

This function is having the responsibility, alone or jointly with one or more others, under the immediate authority of the governing body:

  1. (1)

    for the conduct of the whole of the business (or relevant activities); or

  2. (2)

    in the case of a branch8 in the United Kingdom of a non-UKappointed representative8, for the conduct of all of the activities subject to the UKregulatory system.

SUP 10A.6.19 G RP

For a branch8 in the United Kingdom of a non-UKappointed representative8, the FCA would not normally expect the overseas chief executive of the appointed representative8 as a whole to be FCA-approved for this function where there is a senior manager under them8 with specific responsibility for those activities of the branch8 which are subject to the UKregulatory system. In some circumstances, the person within the appointed representative8 responsible for UK operations may, if the function is likely to enable them8 to exercise significant influence over the branch8, also perform the chief executive function8.

SUP 10A.6.20 G RP

A person performing the chief executive function may be a member of the governing body but need not be. If the chairman of the governing body is also the chief executive, he will be discharging this function. If the responsibility is divided between more than one person but not shared, there is no person exercising the chief executive function. But if that responsibility is discharged jointly by more than one person, each of those persons will be performing the chief executive function.

SUP 10A.6.21 G RP

Note that a body corporate may be a chief executive. If so, it will need to be approved 5to perform the chief executive function.

SUP 10A.6.22 G RP

[deleted]5

Partner function (CF4)

SUP 10A.6.23 R RP
  1. (1)

    If an appointed representative8 is a partnership, the partner function is the function of acting in the capacity of a partner in that appointed representative8.

  2. (2)

    If the principal purpose of the appointed representative8 is to carry on one or more regulated activities, each partner performs the partner function.

  3. (3)

    If the principal purpose of the appointed representative8 is other than to carry on regulated activities:

    1. (a)

      a partner performs the partner function to the extent only that they have8 responsibility for a regulated activity; and

    2. (b)

      a partner in an appointed representative8 will be taken to have responsibility for each regulated activity except where the partnership has apportioned responsibility to another partner or group of partners.

SUP 10A.6.24 G RP

[deleted]7

5 5
SUP 10A.6.25 G RP

[deleted]7

SUP 10A.6.26 R RP
SUP 10A.6.27 R RP

If a partnership is registered under the Limited Partnership Act 1907, the partner function does not extend to any function performed by a limited partner.

SUP 10A.6.28 G RP

[deleted]5

Director of unincorporated association function (CF5)

SUP 10A.6.29 R RP

If an appointed representative8 is an unincorporated association, the director of unincorporated association function is the function of acting in the capacity of a director of the unincorporated association. 5

3 2
SUP 10A.6.30 G RP

[deleted]5

3 2
SUP 10A.6.31 R RP

[deleted]7

SUP 10A.6.32 R RP

[deleted]7

SUP 10A.6.33 G RP

[deleted]7

SUP 10A.6.34 G RP

[deleted]7

5 5 3

SUP 10A.7 FCA required functions

[deleted]10

SUP 10A.8 Systems and controls functions

[deleted]7

SUP 10A.9 Significant management functions [deleted]

[deleted]8

SUP 10A.10 Customer-dealing functions

Introduction

SUP 10A.10.1 R RP

SUP 10A.10 applies with respect to activities carried on from an establishment maintained by the appointed representative or its principal7 in the United Kingdom.

SUP 10A.10.2 G RP

Without SUP 10A.10.1 R, the description of the customer function would extend to this function wherever it was performed. The effect of SUP 10A.10.1 R is that the description is limited, in relation to regulated activities with an overseas element, in a manner which is broadly consistent with the scope of conduct of business regulation.

SUP 10A.10.3 G RP

The customer function has to do with giving advice on, dealing and arranging deals in and managing investments; it has no application to banking business such as deposit taking and lending, nor to general insurance business or credit-related regulated activity1.

The basic rule about the customer function

SUP 10A.10.4 R RP

The customer function is one which comes within the definition of a customer-dealing function.

SUP 10A.10.5 R RP

The3 customer-dealing function, in relation to an appointed representative7 ("A"), means a function that will involve the person performing it in dealing with:3

  1. (1)

    customers of A; or

  2. (2)

    property of customers of A;

SUP 10A.10.5A R

5In SUP 10A.10.5R, customer, in relation to an appointed representative7, means a person who is using, or who is or may be contemplating using, any of the services provided by the appointed representative7.

SUP 10A.10.5B G

7A function is not included in the customer function unless it also meets the requirements of SUP 10A.3.1R (Provisions related to the Act).

SUP 10A.10.6 G RP

The FCA interprets the phrase “dealing with” as including having contact with customers5 and extending beyond “dealing” as used in the phrase “dealing in investments”. “Dealing in” is used in Schedule 2 to the Act to describe in general terms the regulated activities which are specified in Part II of the Regulated Activities Order.

Customer function (CF 30)

SUP 10A.10.7 R RP

The customer function is the function of:

  1. (1)

    advising on investments other than a non-investment insurance contract (but not where this is advising on investments in the course of carrying on the activity of giving basic advice on a stakeholder product) and performing other functions related to this such as dealing and arranging;

  2. (2)

    giving advice to clients solely in connection with corporate finance business and performing other functions related to this;

  3. (3)

    giving advice or performing related activities in connection with pension transfers, pension conversions2 or pension opt-outs2for retail clients;

    2
  4. (4)

    giving advice to a person to become, or continue or cease to be, a member of a particular Lloyd's syndicate;

  5. (5)

    dealing, as principal or as agent, and arranging (bringing about) deals in investments other than a non-investment insurance contract with, for, or in connection with customers where the dealing or arranging deals is governed by COBS 11 (Dealing and managing);

  6. (6)

    [deleted]6

  7. (7)

    in relation to bidding in emissions auctions, acting as a ‘bidder’s representative’ within the meaning of subparagraph 3 of article 6(3) of the auction regulation.

SUP 10A.10.8 R RP

The customer function does not extend to an individual who is performing the functions in SUP 10A.10.7R (1) to SUP 10A.10.7R (2) or SUP 10A.10.7R (5) to (7) and who is based overseas and who, in a 12-month period, spends no more than 30 days in the United Kingdom to the extent that he is appropriately supervised by a person approved for this function.

SUP 10A.10.9 G RP

The FCA would expect an individual from overseas to be accompanied on a visit to a customer. TC 2.1.9 R (2) (where it applies)7 provides that the firm will have to be satisfied that the individual has at least three years of up-to-date, relevant experience obtained outside the United Kingdom. However, the remaining provisions of TC 2.1.9 R (2) are disapplied in these circumstances (except for an individual who gives advice to retail clients on retail investment products, gives advice on P2P agreements to retail clients4 or is a broker fund adviser). The effect of this is that such individuals need not attain the relevant regulatory module of an appropriate qualification (see TC 2.1.9 R (2)).

SUP 10A.10.10 G RP

The customer function in SUP 10A.10.7R (5) does not extend to the individual who, on the instructions of the customer, simply inputs the customer's instructions into an automatic execution system where no discretion is or may be exercised by the individual performing the activity. Nor does it extend to merely introducing a customer to a firm or distributing advertisements.

SUP 10A.10.11 G RP

An individual may advise on investments prior to being assessed as competent in accordance with the rules in the Senior Management Arrangements, Systems and Controls sourcebook (SYSC) and, where relevant, the Training and Competence sourcebook (TC). The firm should record when that person subsequently becomes competent.

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

4

1

SUP 10A.12 Procedures relating to FCA-approved persons

Forms

SUP 10A.12.1 G

The forms listed in SUP 10A.12.2 G are referred to in SUP 10A.12 (Procedures relating to FCA-approved persons) to SUP 10A.16 (How to apply for approval and give notifications)7.

SUP 10A.12.2 G RP

Table: FCA-approved persons forms

Form

Purpose

Handbook requirement

the relevant Form A

SUP 10C Annex 3D 7

3 1 1

Application to perform controlled functions under the approved persons regime

SUP 10A.13.3 D

Form B

SUP 10C Annex 4R 5

Notice to withdraw an application to perform controlled functions under the approved persons regime

SUP 10A.13.19 R

Form C

SUP 10C Annex 5R 5

Notice of ceasing to perform controlled functions

SUP 10A.14.8 R

Form D

SUP 10C Annex 6R 5

Notification of changes in personal information or application details

SUP 10A.14.15 R

Form E

SUP 10C Annex 7D 7

1 1 3

Internal transfer of an approved person

SUP 10A.14.4 D

7

5 5 5 6

7

5
SUP 10A.12.3 G RP

[deleted]7

SUP 10A.12.4 G RP

Unless the context otherwise requires, in SUP 10A.12 (Procedures relating to FCA-approved persons) to SUP 10A.16 (How to apply for approval and give notifications) 7where reference is made to a firm, this also includes an applicant for Part 4A permission, and other persons seeking to carry on regulated activities as an authorised person.

SUP 10A.12.5 G RP

Forms B, C, D and E can only be submitted in respect of an FCA-approved person by the firm that submitted an FCA-approved person's original application (the relevant Form A).

SUP 10A.12.6 G RP

Copies of Forms A, B, C, D and E may be obtained from the FCA website. Credit unions can obtain copies from the FCA's Contact Centre. To contact the FCA's2Contact Centre for approved persons enquiries:

2 2
  1. (1)

    telephone 0300 500 0597;2or

    2
  2. (2)

    e-mail firm.queries@fca.org.uk; or

  3. (3)

    fax 020 7066 0017; or

  4. (4)

    write to:

    Customer Contact Centre

    The Financial Conduct Authority

    12 Endeavour Square4

    London4

    E20 1JN.4

SUP 10A.13 Application for approval and withdrawing an application for approval

When to apply for approval

SUP 10A.13.1 G RP

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

SUP 10A.13.2 G RP

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. (1)

    a person (“P”) has at any time performed an FCA controlled function without approval; and

  2. (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

SUP 10A.13.3 D RP

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).

SUP 10A.13.3A D

3If a firm must make an application using Form A, it must use Form A (shortened form) if:

  1. (1)

    the candidate:

    1. (a)

      has current approved person approval to perform:

      1. (i)

        an FCA controlled function that is a significant-influence function5; or

      2. (ii)

        an FCA-designated senior management function; or

      3. (iii)

        a PRA controlled function; or

    2. (b)

      has had current approved person approval of the type described in (a) within the previous six months; and

  2. (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.

SUP 10A.13.3B D

[deleted]4

3
SUP 10A.13.4 G

SUP 10A.16.1 D explains how applications should be submitted.

SUP 10A.13.4A G

[deleted]4

2

Who should make the application?

SUP 10A.13.5 G RP
  1. (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:

    1. (a)

      the FCAcandidate; or

    2. (b)

      the appointed representative5.

  2. (2)

    [deleted]5

    3
SUP 10A.13.6 G RP

Outsourcing arrangements [deleted]5

SUP 10A.13.7 G RP

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

SUP 10A.13.8 G RP

The Act sets out the time that the FCA has to consider an application and come to a decision.

SUP 10A.13.9 G RP

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. (1)

    the period within which an application for that permission must be determined; and

  2. (2)

    the period of three months from the time it receives a properly completed application.

SUP 10A.13.10 G RP

In any other case it is the period of three months from the time it receives a properly completed application.

SUP 10A.13.11 G RP

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.

SUP 10A.13.12 G RP

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 FCAcandidate'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.

SUP 10A.13.13 G RP

If there is a delay in processing the application within the standard response time, the FCA will tell the firm making the application as soon as this becomes apparent.

SUP 10A.13.14 G RP

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:

  1. (1)

    will stop on the day the FCA requests the information; and

  2. (2)

    will start running again on the day on which the FCA finally receives all the requested information.

SUP 10A.13.15 G RP

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.

SUP 10A.13.16 G RP

For further guidance on criteria for assessing whether a FCA candidate is fit and proper, see FIT.

Decisions on applications

SUP 10A.13.17 G RP

Whenever it grants an application, the FCA will confirm this in writing to all interested parties.

SUP 10A.13.18 G RP

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.

Withdrawing an application for approval

SUP 10A.13.19 R RP

A firm notifying the FCA of its withdrawal of 1an application for approval must notify the FCA using Form B (SUP 10C Annex 4R)3.

SUP 10A.13.20 G RP

Under section 61(5) of the Act (Determination of applications), the firm may withdraw an application only if it also has the consent of the candidate and the person by whom the candidate is or would have been employed, if this is not the firm making the application.

SUP 10A.14 Changes to an FCA-approved person's details

Moving within a firm

SUP 10A.14.1 G RP

An FCA-approved person's job may change from time to time as a result, for instance, of a change in personal job responsibilities or a firm'sregulated activities. Where the changes will involve the person performing one or more FCA controlled functions different from those for which approval has already been granted, then an application must be made to the FCA for approval for the person to perform those FCA controlled functions. The firm must take reasonable care to ensure that an individual does not begin performing an FCA controlled function until the FCA has granted FCA-approved person status to that individual in respect of that FCA controlled function. 5

SUP 10A.14.2 G RP

If:7

  1. (1)

    a firm is applying for approval for someone to perform a controlled function under this chapter; and 7

  2. (2)

    that person is also ceasing to perform FCA controlled functions or a PRA controlled function in relation to the same firm or in relation to a firm in the same group;7

the firm should generally use Form E. Further details can be found in SUP 10A.14.4D.7

5 5 5 5
SUP 10A.14.3 G RP

If a person is to perform an FCA controlled function under this chapter in relation to7 a firm for which they5 already perform an5FCA controlled function as an approved person (whether under this chapter or SUP 10C (FCA senior managers regime for approved persons in SMCR firms))7 but they are5 not at the same time ceasing to perform an FCA controlled function or PRA controlled function for the firm or a firm in the same group5, a firm should use Form A. See SUP 10A.13.3D and SUP 10A.13.3AD for further5 details.

SUP 10A.14.3A G

7See SUP 10A.14.23G for circumstances in which a firm should use Form D rather than Form A or E.

SUP 10A.14.4 D RP
  1. (1)

    A firm must use Form E where an approved person is both permanently8 ceasing to perform one or more controlled functions and needs to be approved in relation to one or more FCA controlled functions in relation to7 the same firm or in relation to a firm in the same7group.

  2. (2)

    A firm must not use Form E if: 2

    1. (a)

      the approved person has never before been approved to perform for any firm:2

      1. (i)

        an FCA controlled function that is2 a significant-influence function; or2

      2. (ii)

        an FCA-designated senior management function; or2

      3. (iii)

        a PRA controlled function;2

    2. (b)

      the approved person2 has not been subject to a current approved person approval from the FCA or PRA to perform:2

      1. (i)

        an FCA controlled function that is2 a significant-influence function; or

      2. (ii)

        an FCA-designated senior management function; or2

      3. (iii)

        a PRA controlled function;2

      in relation to any firm for more than six months; or2

    3. (c)

      any of the following apply (where applicable):2

      1. (i)

        a notification referred to in SUP 10C.10.9D(4)(b) or (c) (notification obligations under the Act applying to SMCR firms5) has been made or should be made; or2

      2. (ii)

        any of the circumstances in SUP 10A.14.10R (Qualified Form C) apply;2

      in relation to any:2

      1. (iii)

        controlled functions which that person is ceasing to perform (as referred to in (1)); or2

      2. (iv)

        5controlled function that they are continuing to perform in relation to7 that firm or to7 a firm in the same group.2

  3. (3)

    A firm must not use Form E if a notification has been made or should be made under:2

    1. (a)

      SUP 10A.14.17R (Changes in fitness to be notified under Form D);2

    2. (b)

      SUP 10C.14.18R (the corresponding requirement for SMCR firms5); or2

    3. (c)

      3the corresponding PRA requirements to (a).3

      22

    (whichever is applicable)2 in relation to any controlled functions that that person is ceasing to perform (as referred to in (1)) or any controlled function that he is continuing to perform in relation to that firm or a firm in the same group.

SUP 10A.14.4A G

[deleted]6

  1. (4)

    [deleted]5

SUP 10A.14.4AA G

[deleted]6

SUP 10A.14.4AB G
  1. (1)

    8A firm should only use a Form E when the candidate is ceasing to perform a controlled function in a way that means that the candidate will cease to be approved for that controlled function.

  2. (2)

    See SUP 10A.14.8AG to SUP 10A.14.8DG for the difference between temporarily ceasing to perform a controlled function (which means that approval for the performance of that controlled function continues) and permanently ceasing to perform a controlled function (which means that approval for the performance of that controlled function lapses).

  3. (3)

    (1) and (2) are the reason that SUP 10A.14.4D refers to permanently ceasing to perform a controlled function.

SUP 10A.14.4B D

4[deleted]6

5

5

5
SUP 10A.14.4C G

4 5[deleted]6

5 5 5 5 5
SUP 10A.14.5 G

SUP 10A.16.1 D explains how applications should be submitted.

Moving between firms

SUP 10A.14.6 G RP

If it is proposed that an FCA-approved person will no longer be performing an FCA controlled function under an arrangement entered into by the appointed representative of one principal7, but will be performing the same or a different FCA controlled function under an arrangement entered into by the appointed representative of a new principal7, the new principal7 will be required to make a fresh application for the performance of the FCA controlled function by that person. This applies even if the new principal is in the same group as the old principal or the appointed representative is the same.7

SUP 10A.14.7 G RP

[deleted]5

Ceasing to perform an FCA controlled function

SUP 10A.14.8 R RP
  1. (1)

    A firm must submit to the FCA a completed Form C (SUP 10C Annex 5R)5 no later than ten4 business days after an FCA-approved person permanently8 ceases to perform an FCA controlled function.2

  2. (2)

    If:2

    1. (a)

      the firm is also making an application for approval for that approved person to perform a controlled function in relation to7 the same firm or to a firm in the same7group; and2

    2. (b)

      ceasing to perform the FCA controlled function in (1) has triggered a requirement to make that application for approval:2

      1. (i)

        to the FCA using Form E (rather than a Form A) under SUP 10A or SUP 10C; or2

      2. (ii)

        to the PRA using the PRA’s Form E in accordance with the corresponding PRA requirements;2

      it must make the notification under (1) using that Form E.2

SUP 10A.14.8A G

8Permanently ceasing to perform an FCA controlled function means that that person no longer has approval to perform that function. Permanent cessation does not mean that that person cannot return to perform that function, rather that if they do, they will need fresh approval.

SUP 10A.14.8B G

8Examples of when an FCA-approved person will have permanently ceased to perform an FCA controlled function include moving within a firm (see SUP 10A.14.1G to SUP 10A.14.5G), moving between firms (see SUP 10A.14.6G), resignation, dismissal, retirement, and death.

SUP 10A.14.8C G

8In cases of temporary absence (for example sick leave or parental leave) where the firm is keeping the same role open for an FCA-approved person, approval to perform the relevant FCA controlled function will continue and therefore the firm will not be required to submit a Form C. See SUP 10A.14.8HG for guidance on interim appointments.

SUP 10A.14.8D G

8As a result, an FCA-approved person who returns to perform the same FCA controlled function following such a temporary absence will not need fresh approval.

SUP 10A.14.8E R
  1. (1)

    8If an FCA-approved person has been absent for more than 12 weeks, the firm must notify the FCA on Form D (SUP 10C Annex 6R) within seven business days of the end of the 12-week period.

  2. (2)

    The firm must also notify the FCA on Form D (SUP 10C Annex 6R) within seven business days of the FCA-approved persons return.

SUP 10A.14.8F G

8Where a firm is aware that an FCA-approved person will be absent for more than 12 weeks that firm can notify the FCA prior to the end of the 12-week period.

SUP 10A.14.8G G

8The duty to notify in SUP 10A.14.17R continues to apply during a temporary absence.

SUP 10A.14.8H G
  1. (1)

    8Where an FCA-approved person is temporarily absent (see SUP 10A.14.8CG) a firm may decide to appoint another person to perform that FCA-controlled function during the interim period.

  2. (2)

    Unless SUP 10A.5.6R (The 12-week rule) applies, the firm will be required to make a fresh application for the performance of the FCA-controlled function by a person who has been appointed for the interim period (see SUP 10A.13 (Application for approval and withdrawing an application for approval) for details).

  3. (3)

    The firm will be required to notify the FCA under SUP 10A.14.8R when the person who was appointed for the interim period gives up the role on the return of the person who was temporarily absent.

SUP 10A.14.9 G

SUP 10A.16.2 R explains how notifications should be submitted.

SUP 10A.14.9A G

[deleted]6

SUP 10A.14.10 R RP
  1. (1)

    A firm must notify the FCA as soon as practicable after it becomes aware, or has information which reasonably suggests, that it will submit a qualified Form C in respect of an FCA-approved person.

  2. (2)

    Form C is qualified if the information it contains:

    1. (a)

      relates to the fact that the firm or the appointed representative7 has dismissed, or suspended, the FCA-approved person from its employment; or

    2. (b)

      relates to the resignation by the FCA-approved person while under investigation by the firm, the appointed representative,7 the FCA or any other regulatory body; or

    3. (c)

      otherwise reasonably suggests that it may affect the FCA's assessment of the FCA-approved person's fitness and propriety.

SUP 10A.14.11 G RP

Notification under SUP 10A.14.10 R may be made by telephone, email or fax and should be made, where possible, within one business day of the firm becoming aware of the information. If the firm does not submit Form C, it should inform the FCA in due course of the reason. This could be done using Form D, if appropriate.

SUP 10A.14.12 G RP

A firm is responsible for notifying the FCA if any FCA-approved person has permanently8 ceased to perform an FCA controlled function under an arrangement entered into by its appointed representative or former appointed representative or where any such FCA-approved person is temporarily absent8.

SUP 10A.14.13 G RP

A firm can submit Form C or Form E 6to the FCA in advance of the cessation date. When a person ceases the arrangement under which they perform4 an FCA controlled function, they4 will automatically cease to be an FCA-approved person in relation to that FCA controlled function. A person can only be an FCA-approved person in relation to a specific FCA controlled function. Therefore, a person is not an FCA-approved person during any period between ceasing to perform one FCA controlled function (when they are4 performing no other FCA controlled function) and being approved in respect of another FCA controlled function.

4
SUP 10A.14.14 G RP

Sending forms promptly will help to ensure that any fresh application can be processed within the standard response times.

Changes to an approved person's personal details

SUP 10A.14.15 R RP

If an FCA-approved person's title, name or national insurance number changes, the authorised approved person employer7 must notify the FCA on Form D (SUP 10C Annex 6R)5 of that change within seven business days of the firm becoming aware of the matter.

SUP 10A.14.16 G RP

The duty to notify in SUP 10A.14.15 R does not apply to changes to an FCA-approved person's private address.

SUP 10A.14.17 R RP

If a firm becomes aware of information which would reasonably be material to the assessment of an FCA-approved person's, or a FCA candidate's, fitness and propriety (see FIT), it must inform the FCA on Form D, or (if it is more practical to do so and with the prior agreement of the FCA) by e-mail or fax, as soon as practicable.

SUP 10A.14.18 G RP

SUP 10A.16.2 R applies to the submission of Form D.

SUP 10A.14.19 G RP

Failing to disclose relevant information to the FCA may be a criminal offence under section 398 of the Act.

SUP 10A.14.20 R RP

The duty to notify in SUP 10A.14.17 R extends to any circumstances that would normally be declared when giving the information required for section 5 of Form A or matters considered in FIT 2.

SUP 10A.14.21 G RP
  1. (1)

    If, in relation to a firm which has completed the relevant Form A (SUP 10C Annex 3D7), any of the details relating to arrangements and FCA controlled functions are to change, the firm must notify the FCA on Form D (SUP 10C Annex 6R5).

  2. (2)

    The notification under (1) must be made as soon as reasonably practicable after the firm becomes aware of the proposed change.

  3. (3)

    This also applies in relation to an FCA controlled function for which an application was made using Form E.

  4. (4)

    This rule also applies to a firm in respect of an approved person, to whom the grandfathering arrangements relating to the coming into force of the Act applied as if the firm had completed the relevant Form A for that person.

SUP 10A.14.22 G RP

SUP 10A.16.2 R also applies to the submission of Form D under SUP 10A.14.21 G.

SUP 10A.14.23 G RP

An example of where a firm should use Form D is when an individual who is appointed by one appointed representative becomes employed by another appointed representative but continues to perform the customer function for the firm. The firm should notify the FCA by completing Section 1.07 of Form D.

SUP 10A.14.24 R

[deleted]2

SUP 10A.14.25 G

[deleted]2

SUP 10A.14.26 R

[deleted]2

2

SUP 10A.15 References and accurate information

References

SUP 10A.15.1 G RP
  1. (1)

    1SYSC 22 (Regulatory references) says that if1 a firm (A):

    1. (a)

      is considering appointing a person (P)1 to perform any1controlled function or certain other functions1;

    2. (b)

      requests1 a reference from a firm (B) that is P’s1 current or former employer1; and

    3. (c)

      indicates to B the purpose of the request;

    B should1, as soon as reasonably practicable, give a reference to A1.

  2. (2)

    SYSC 22.8.3R and SYSC 22.8.4R (Appointed representatives) say that this applies to B’s appointed representatives as well as to B.4

    331
  3. (3)

    [deleted]3

    1
SUP 10A.15.2 G

[deleted]1

SUP 10A.15.3 G

[deleted]1

SUP 10A.15.3A G

[deleted]1

2

The need for complete and accurate information

SUP 10A.15.4 G RP

The obligations to supply information to1 the FCA under either SUP 10A.14.8R or SUP 10A.14.10R1 apply notwithstanding any agreement (for example a 'COT 3' Agreement settled by the Advisory, Conciliation and Arbitration Service (ACAS)) or any other arrangements entered into by a firm or its appointed representative4 and an employee upon termination of the employee's employment. A firm should not (and should ensure that its appointed representatives do not)4 enter into any such arrangements or agreements that could conflict with its obligations under this section.

SUP 10A.15.5 G RP

Failing to disclose relevant information to the FCA may be a criminal offence under section 398 of the Act.

SUP 10A.16 How to apply for approval and give notifications

SUP 10A.16.1 D RP
  1. (1)

    This direction applies to an application under Form A or Form E.

  2. (2)

    An5 application 4must be made by submitting the Form in accordance with the requirements in SUP 10C.15 (Forms and other documents and how to submit them to the FCA) about the submission of those Forms6.

    11322
  3. (2A)

    [deleted]5

    1
  4. (3)

    [deleted]4

  5. (4)

    [deleted]6

  6. (5)

    [deleted]6

    4
SUP 10A.16.2 R RP
  1. (1)

    This rule applies to a notification under Form B,6 Form C or Form D.

  2. (2)

    A notification must be made in accordance with the requirements in SUP 10C.15 (Forms and other documents and how to submit them to the FCA) about the submission of those Forms6.

    4
  3. (3)

    [deleted]6

    4
SUP 10A.16.2A R

[deleted]6

4
SUP 10A.16.3 G RP

[deleted]6

SUP 10A.16.4 G

[deleted]6

SUP 10A.17 Further questions [deleted]

[deleted]1

SUP 10A Annex 1 Frequently asked questions [deleted]

[deleted]6

SUP 10A Annex 2 Approved persons regime: summary of forms and their use for applications for approval to perform an FCA-controlled function [deleted]

[deleted]3

SUP 10A Annex 3 [Not used]

[Not used]

SUP 10A Annex 4 Form A: Application to perform controlled functions under the approved person regime [deleted]

[deleted]10

SUP 10A Annex 5 Form B: Notice to withdraw an application to perform controlled functions (including senior management functions) [deleted]211

2

SUP 10A Annex 6 Form C: Notice of ceasing to perform controlled functions (including senior management functions) [deleted]11

3

SUP 10A Annex 7 Form D: Notification of changes in personal information or application details and conduct breaches/disciplinary action related to conduct [deleted]22

5

SUP 10A Annex 8 Form E: Internal transfer of an approved person [deleted]10

[deleted]10

SUP 10A Annex 9 Form G: The Retail Investment Adviser Complaints Alerts Form

SUP 10A Annex 9 R

[deleted]1

2

SUP 10A Annex 10 1MiFID Article 4 APER Information Form [deleted]

SUP 10A Annex 10 D

[deleted]2