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:
It preserves the principle of Home State prudential regulation.
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 notified3UKbranchmanager, of an EEA SMCR firm5, acting in that capacity, will not, therefore, have to be approved by the FCA under the Act.
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
considered, for example, the position of a branchmanager 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.
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.
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.
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.
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.
This chapter does not apply to a function performed by a person acting as:
an insolvency practitioner within the meaning of section 388 of the Insolvency Act 1986;
a nominee in relation to a voluntary arrangement under Parts I (Company Voluntary Arrangements) and VIII (Individual Voluntary Arrangements) of the Insolvency Act 1986;
an insolvency practitioner within the meaning of article 3 of the Insolvency (Northern Ireland) Order 1989; or
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.
5 Swiss 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.