SUP 10C.8 The other local responsibility function (SMF22)1

Application

SUP 10C.8.-2R

4This section:

  1. (1)

    applies to an overseas SMCR firm to which SYSC 26 (Senior managers and certification regime: Overall and local responsibility) applies; and

  2. (2)

    does not apply to an EEA SMCR firm.

SUP 10C.8.-1G

4The other local responsibility function only applies to one of the following types of overseas SMCR firm:

  1. (1)

    an SMCR banking firm; and

  2. (2)

    a Solvency II firm (including a large non-directive insurer) but excluding certain firms in run-off;

but does not apply to any EEA SMCR firm.

Other local responsibility function (SMF22)

SUP 10C.8.1RRP

2A person performs the other local responsibility function in relation to a branch maintained in the United Kingdom by an overseas SMCR firm4 if that person:

  1. (1)

    is performing:

    1. (a)

      a function allocated to that person under SYSC 26.3.1R (Main rules)4 in relation to the firm; or

    2. (b)

      FCA-prescribed senior management responsibility (z)4 in the table in SYSC 24.2.6R4 (functions in relation to CASS) allocated to that person under SYSC 24.2 (Allocation of FCA-prescribed senior management responsibilities: Main allocation rules)4; and

  2. (2)

    does not have an approval to perform any other designated senior management function in relation to the branch.

SUP 10C.8.2 GRP

The table in SUP 10C.8.3G gives:

  1. (1)

    examples of how SUP 10C.8.1R(2) works; and

  2. (2)

    other examples of how the other local responsibility function works.

SUP 10C.8.3GRP

Table: Examples of how the other local responsibility function applies

Example

Comments

(1) ‘A’ is allocated local responsibility for one of a branch’s main business lines. A is also appointed to perform a PRA-designated senior management function for the same branch.

A only needs approval to perform the PRA-designated senior management function.

(2) ‘A’ is outside the branch’s management structure and A’s responsibilities for the branch are limited to setting overall strategy for the branch. A does not have responsibility for implementing that strategy.

A is not performing the other local responsibility function. The reason for this is explained in SYSC 26.8.3G4. SUP 10C.8.1R(2) is irrelevant to this example.

4

(3) A small branch undertakes two business lines (wholesale lending and corporate investments). ‘A’ is head of wholesale lending and is also an executive director of the branch. ‘B’ is head of corporate investments and does not sit on the branch management committee but reports to it on corporate investments. The branch allocates local responsibility for these functions to A and B. Neither A nor B performs any other FCA-designated senior management function or PRA-designated senior management function4.

A only needs approval to perform the executive director function4. B needs approval to perform the other local responsibility function.

3

(4) A branch does not have a Head of Internal Audit. ‘P’ is allocated local responsibility for internal audit in relation to that branch.

P needs approval to perform the other local responsibility function. However, if P has already been approved to perform another FCA-designated senior management function or PRA-designated senior management function for that firm4, then P will not be performing the other local responsibility function.

(5) ‘A’ is appointed to perform the executive director function4. The same branch also allocates local responsibility for some branch functions to A.

3

A only needs approval to perform the executive director function4.

3

(6) ‘A’ is approved to perform the other local responsibility function. Later, A is appointed to perform the executive director function4 for the same firm.

3

A requires approval for the other local responsibility function when A is first appointed. When A is later approved to perform the executive director function4, A stops performing the other local responsibility function. The firm should use Form E to apply for approval for A to perform the executive director function and to notify the FCA that A is no longer performing the other local responsibility function.4

33

(7) ‘A’ is appointed to perform:

(a) the compliance oversight function for one firm (Firm X) in a group (which may or may not be an SMCR firm to which the other local responsibility function applies4); and

(b) a function coming within the scope of the other local responsibility function for the United Kingdom branch of4 another firm (which is an overseas SMCR firm to which the other local responsibility function applies4) in the same group (Firm Y).

A needs approval to perform the compliance oversight function for Firm X and the other local responsibility function for Firm Y.

(8) ‘A’ is appointed to take on some functions that come within the other local responsibility function. Later, A is appointed as chief risk officer. A is a type of firm for which being chief risk officer is a PRA designated senior management function.4

On A’s first appointment, A will need to be approved to perform the other local responsibility function.

On being approved as chief risk officer, A stops performing the other local responsibility function4.

(9) ‘A’ is appointed as an executive director. A then resigns and takes up a job with the same firm coming within the other local responsibility function4.

On A’s first appointment, A will need to be approved to perform the executive director function4. A will need to get approval to perform the other local responsibility function before A takes up their new responsibilities4.

3

Note: Local responsibility is explained in SYSC 26 (Senior managers and certification regime: Overall and local responsibility).4

SUP 10C.8.4RRP

[deleted] [Editor’s note: The text of this provision has been moved to SUP 10C.8A.2R]4

SUP 10C.8.5GRP

[deleted] [Editor’s note: The text of this provision has been moved to SUP 10C.8A.3G]4

SUP 10C.8.6GRP

[deleted] [Editor’s note: The text of this provision has been moved to SUP 10C.8A.4G]4

SUP 10C.8.7GRP

[deleted] [Editor’s note: The text of this provision has been moved to SUP 10C.5A.3G]4

4

Temporary absences

SUP 10C.8.8R

4A person does not perform the other local responsibility function in relation to a firm by performing a function allocated to that person under SYSC 26.4.6R (Exclusion where the 12-week rule applies) in relation to the firm.