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SUP 10C.1 1Application


SUP 10C.1.1RRP

This chapter applies to every SMCR firm5.

SUP 10C.1.2GRP

This chapter is also relevant to FCA-approved SMF managers of an SMCR firm5.

SUP 10C.1.2AG

5SUP 10C Annex 1 (What functions apply to what type of firm) sets out:

  1. (1)

    how this chapter applies to different types of SMCR firm; and

  2. (2)

    the SMCR firms to which this chapter does not apply.

Overseas firms: UK services

SUP 10C.1.3RRP

2This chapter does not apply to an overseas SMCR firm5 other than in relation to an establishment maintained by it or its appointed representative in the United Kingdom.

EEA firms: general application

SUP 10C.1.4RRP

2This chapter does not apply to an EEA SMCR firm5 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 under:

  1. (1)

    the Single Market Directives;

  2. (2)

    the Treaty;

  3. (3)

    the auction regulation;4

  4. (4)

    the benchmarks regulation.4

SUP 10C.1.5GRP
  1. (1)

    2SUP 10C.1.4R reflects the provisions of section 59(8) of the Act and, where relevant, the Treaty.

  2. (2)

    It preserves the principle of Home State prudential regulation.

  3. (3)

    For an EEA SMCR firm5, the effect is to reserve to the Home State regulator the assessment of fitness and propriety of a person performing a function in the exercise of an EEA right. A member of the governing body, or the notified3 UK branch manager, of an EEA SMCR firm5, acting in that capacity, will not, therefore, have to be approved by the FCA under the Act.

  4. (3A)

    For example, persons in Solvency II firms which are incoming EEA firms are not expected to be carrying out FCA functions to the extent that the person will be regarded as effectively running the firm or responsible for a Solvency II Directive ‘key function’.5

  5. (4)

    Aside from (1) to (3A)5 an EEA SMCR firm5 should have:

    1. (a)

      considered the impact of the Host State rules with which it is required to comply when carrying on a passported activity or a Treaty activity through a branch in the United Kingdom;

    2. (b)

      been notified of those provisions under Part II of Schedule 3 to the Act in the course of satisfying the conditions for authorisation in the United Kingdom; and

    3. (c)

      considered, for example, the position of a branch manager based in the United Kingdom who may also be performing a function in relation to the carrying on of a regulated activity not covered by the EEA right of the firm. In so far as the function is within the description of an FCA controlled function, the firm will need to seek approval for that person to perform that FCA controlled function.

Overseas firms: general

  1. (1)

    2Generally, where an overseas manager of an overseas SMCR firm5 has responsibilities in relation to its branch in the United Kingdom that are strategic only, they will not need to be an FCA-approved SMF manager.

  2. (2)

    However, where an overseas manager is responsible for implementing that strategy for its branch in the United Kingdom, and has not delegated that responsibility to an SMF manager in the United Kingdom, they will potentially be performing an FCA controlled function if the detailed conditions in this chapter defining the relevant FCA controlled function are met.

UK firm with overseas branches or providing services on a cross-border basis

SUP 10C.1.6GRP

There are no territorial limitations to SUP 10C for:

  1. (1)

    overseas branches of UK firms; or

  2. (2)

    UK firms providing services into or out of the United Kingdom on a cross-border basis.

Appointed representatives

SUP 10C.1.7RRP

This chapter does not deal with an approved person who is approved under SUP 10A.1.16BR (Appointed representatives).

SUP 10C.1.8GRP
  1. (1)

    SUP 10A.1.15R to SUP 10A.1.16DG (Appointed representatives) deal with the approved persons regime for appointed representatives of SMCR firms5.

  2. (2)

    In general this chapter does not apply to appointed representatives of SMCR firms5. SUP 10A applies instead.

  3. (3)

    In theory, a person employed by an appointed representative of an SMCR firm5 could come within one of the controlled functions in this chapter. If so, that person will be performing a senior management function and this chapter would apply. However, the FCA thinks that such a situation should rarely arise unless the person is seconded to the firm5.

  4. (4)

    If a person is an approved person under this chapter and under SUP 10A for the same firm, this chapter applies to FCA-designated senior management functions under this chapter and SUP 10A applies to controlled functions under SUP 10A. It is unlikely that such a scenario would normally5 arise in practice.

Insolvency practitioners

SUP 10C.1.9RRP

This chapter does not apply to a function performed by a person acting as:

  1. (1)

    an insolvency practitioner within the meaning of section 388 of the Insolvency Act 1986;

  2. (2)

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

  3. (3)

    an insolvency practitioner within the meaning of article 3 of the Insolvency (Northern Ireland) Order 1989; or

  4. (4)

    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.

Swiss general insurers

SUP 10C.1.10R

5For Swiss general insurers, references in this chapter to parts of the PRA Rulebook for ‘Solvency II firms’ are to be read as references to the corresponding parts of the PRA Rulebook applying to large non-directive insurers.

SUP 10C.1.11G

5Swiss general insurers are in the large non-directive insurers sector of the PRA Rulebook and the PRA applies to them, in relation to their controlled functions, provisions equivalent to those applying to third country branches in the Solvency II firms sector of the PRA Rulebook. The FCA includes them as third country undertakings of Solvency II firms and so they must follow the requirements for Solvency II firms set out in this chapter.

Insurance and mortgage credit mediation

SUP 10C.1.12G

5See MIPRU 2.2 (Allocation of the responsibility for insurance distribution activity or MCD credit intermediation activity) for how the FCA’s senior managers regime for SMCR firms is adjusted for a firm carrying on insurance distribution activity or MCD credit intermediation activity.