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SUP 10C Annex 1 What functions apply to what type of firm

Part One: Introduction

SUP 10C Annex 1 1.1R

1This annex sets out which FCA controlled function applies to which type of SMCR firm.

SUP 10C Annex 1 1.2G

1If an FCA controlled function is not included in a table for a particular class of firm, that FCA controlled function does not apply to any firm in that class.

SUP 10C Annex 1 1.3G
  1. (1)

    1If one of the tables in this annex shows that an FCA controlled function applies to a type of firm, that function does not necessarily apply to every firm in that class.

  2. (2)

    That may be because of limitations in the description of the function itself. For example, the partner function only applies to partnerships.

  3. (3)

    Another reason would be if the rules defining the FCA controlled function refer to a rule elsewhere in the FCA Handbook and the latter only applies to certain types of firm. For example, SYSC 1 Annex 1 (Detailed application of SYSC) cuts back the application of some of the FCA required functions.2

  4. (4)

    The exclusions in SUP 10C.1 are also relevant.

SUP 10C Annex 1 1.4R

1In the tables in this annex:

  1. (1)

    ✔ means that the FCA controlled function applies; and

  2. (2)

    × means that the FCA controlled function does not apply.

1Part Two: General exclusions2

SUP 10C Annex 1 2.1R
  1. (1)

    2This chapter, except in respect of the FCA required functions, does not apply to an authorised professional firm that is an FCA-authorised person in respect of its non-mainstream regulated activities, subject to (2).

  2. (2)

    Where the authorised professional firm has appointed FCA-approved persons to perform the FCA governing functions with equivalent responsibilities for the firm’s non-mainstream regulated activities and other regulated activities, for the firm’s non-mainstream regulated activities this chapter applies with respect to the FCA governing functions and the FCA required functions only.

1Part Three: Functions applying to banking sector firms

SUP 10C Annex 1 3.1R
  1. (1)

    1The table in SUP 10C Annex 1 3.2R sets out which FCA controlled function applies to which type of SMCR banking firm.

  2. (2)

    SMCR firms in (1) are divided into the following categories for the purposes in (1):

    1. (a)

      a UK SMCR banking firm;

    2. (b)

      an EEA SMCR banking firm; and

    3. (c)

      a third-country SMCR banking firm.

SUP 10C Annex 1 3.2R

1Table: Controlled functions applying to banking firms

(1)

Brief description of function

(2)

Function number

(3)

UK firm

(4)

EEA firm

(5)

Third-country firm

Governing functions

Executive director function

SMF 3

×

Chair of the nomination committee function

SMF 13

×

×

Partner function

SMF 27

×

×

Required functions

Compliance oversight function

SMF 16

×

Money laundering reporting function

SMF 17

Other overall responsibility function

SMF 18

×

×

Other local responsibility function

SMF 22

×

×

Other high-level management functions

EEA branch senior manager function

SMF 21

×

×

Note: The categories of firm in the column headings of this table are to be interpreted in accordance with the classification of firms in SUP 10C Annex 1 3.1R. Therefore:

(1) column three (UK firm) refers to SUP 10C Annex 1 3.1R(2)(a);

(2) column four (EEA firm) refers to SUP 10C Annex 1 3.1R(2)(b); and

(3) column five (Third-country firm) refers to SUP 10C Annex 1 3.1R(2)(c).

1Part Four: Functions applying to insurance sector firms

SUP 10C Annex 1 4.1R
  1. (1)

    1The table in SUP 10C Annex 1 4.2R sets out which FCA controlled function applies to which type of SMCR insurance firm.

  2. (2)

    SMCR firms in (1) are divided into the following categories for the purposes in (1):

    1. (a)

      a Solvency II firm not within any other paragraph of this rule;

    2. (b)

      a Solvency II firm within paragraph (c) of the Glossary definition of Solvency II firm (EEA branch);

    3. (c)

      a Solvency II firm within paragraph (b) of the Glossary definition of Solvency II firm (third country branch);

    4. (d)

      a small non-directive insurer;

    5. (e)

      a firm in SYSC 23 Annex 1 5.2R (firms in run-off); and

    6. (f)

      an insurance special purpose vehicle.

  3. (3)

    An insurance special purpose vehicle only falls into paragraph (2)(f). Subject to that, a firm in (2)(e) does not fall into any other paragraph.

SUP 10C Annex 1 4.2G
SUP 10C Annex 1 4.3R

1Table: Controlled functions applying to insurance sector firms

(1)

Brief description of function

(2)

Function number

(3)

Solvency II and large NDF

(4)

EEA branches

(5)

Third country branches

(6)

Small NDF and other

(7)

ISPV

Governing functions

Executive director function

SMF 3

×

Chair of the nomination committee function

SMF 13

×

×

×

×

Chair of the with-profits committee function

SMF 15

×

×

×

Partner function

SMF 27

×

×

×

Required functions

Compliance oversight function

SMF 16

×

Money laundering reporting function

SMF 17

×

Other overall responsibility function

SMF 18

×

×

×

×

Other local responsibility function

SMF 22

×

×

×

×

Conduct risk oversight (Lloyd’s) function

See Note 2

SMF 23b

×

×

×

×

Other high-level management functions

EEA branch senior manager function

SMF 21

×

×

×

×

Note 1: The categories of firm in the column headings of this table are to be interpreted in accordance with the classification of firms at SUP 10C Annex 1 4.1R. Therefore:

(a) column three (Solvency II and large NDF) refers to SUP 10C Annex 1 4.1R(2)(a);

(b) column four (EEA branches) refers to SUP 10C Annex 1 4.1R(2)(b);

(c) column five (Third country branches) refers to SUP 10C Annex 1 4.1R(2)(c);

(d) column six (Small NDF and other) refers to SUP 10C Annex 1 4.1R(2)(d) and (e); and

(e) column seven (ISPV) refers to SUP 10C Annex 1 4.1R(2)(f).

Note 2: The conduct risk oversight (Lloyd’s) function only applies to the Society.

2Part Five: Functions applying to core firms2

SUP 10C Annex 1 5.1R
  1. (1)

    2The table in SUP 10C Annex 1 5.2R sets out which FCA controlled function applies to which type of core SMCR firm.

  2. (2)

    2Firms in (1) are divided into the following categories for the purposes of this rule:

    1. (a)

      a UK SMCR firm not falling into (d);

    2. (b)

      an EEA SMCR firm;

    3. (c)

      an overseas SMCR firm not falling into (b); and

    4. (d)

      a UK SMCR firm falling into SYSC 23 Annex 1 6.4R (a firm exempt under MiFID whose only permission is bidding in emissions auctions).

SUP 10C Annex 1 5.2R

2Table: Controlled functions applying to core SMCR firms

(1)

Brief description of function

(2)

Function number

(3)

UK firm

(4)

EEA firm

(5)

Other overseas firm

(6)

Emission auction bidder

Governing functions

Chief executive function

SMF 1

×

×

Executive director function

SMF 3

×

Chair of the governing body function

SMF 9

×

×

Head of third country branch function

SMF 19

×

×

×

Partner function

SMF 27

×

×

Required functions

Compliance oversight function

SMF 16

×

×

Money laundering reporting function

SMF 17

Other high-level management functions

EEA branch senior manager function

SMF 21

×

×

×

Note: The categories of firm in the column headings of this table are to be interpreted in accordance with the classification of firms at SUP 10C Annex 1 5.1R. Therefore:

(a) column three (UK firm) refers to SUP 10C Annex 1 5.1R(2)(a);

(b) column four (EEA firm) refers to SUP 10C Annex 1 5.1R(2)(b);

(c) column five (Other overseas firm) refers to SUP 10C Annex 1 5.1R(2)(c); and

(d) column six (Emission auction bidders) refers to SUP 10C Annex 1 5.1R(2)(d).

2Part Six: Functions applying to enhanced scope firms

SUP 10C Annex 1 6.1R
SUP 10C Annex 1 6.2R
SUP 10C Annex 1 7.1R

2Limited scope SMCR firms are divided into the following categories for the purposes of SUP 10C Annex 1:

  1. (1)

    a firm falling within the table in SYSC 23 Annex 1 6.4R that does not come within (2) to (4) or (8) to (9);

  2. (2)

    a firm falling within row (5) of the table in SYSC 23 Annex 1 6.4R (distribution of non-investment insurance contracts);

  3. (3)

    a firm falling within SYSC 23 Annex 1 6.7R (credit firms with limited permission) except for one falling within (4);

  4. (4)

    a firm falling within SYSC 23 Annex 1 6.7R that is an appointed representative;

  5. (5)

    a sole trader who does not come within (1) to (4), (8) or (9);

  6. (6)

    an authorised professional firm that does not come within (1) to (4), (8) or (9);

  7. (7)

    a firm in the table in SUP 10C Annex 1 7.10R;

  8. (8)

    a firm that comes within SYSC 23 Annex 1 6.11R (claims management) that is a Class 1 firm as defined in CMCOB 7.2.5R(1);

  9. (9)

    a firm that comes within SYSC 23 Annex 1 6.11R (claims management) that is not a Class 1 firm as defined in CMCOB 7.2.5R(1).

SUP 10C Annex 1 7.2R

2A firm in SUP 10C Annex 1 7.1R(7) does not fall into any other paragraph of SUP 10C Annex 1 7.1R.

SUP 10C Annex 1 7.3R
  1. (1)

    2The table in SUP 10C Annex 1 7.4R sets out which FCA controlled functions apply to a limited scope SMCR firm covered by SUP 10C Annex 1 7.1R(1), (2), (3), (4), (8) or (9).

  2. (2)

    Parts 1.2 and 2 of that table apply to EEA SMCR firms.

  3. (3)

    Parts 1.1 and 2 of that table apply to other limited scope SMCR firms in (1).

SUP 10C Annex 1 7.4R

2Table: Controlled functions applying to limited scope SMCR firms except sole traders and authorised professional firms

Part 1.1 (UK and non-EEA firms)

(1)

Brief description of function

(2)

Function number

(3)

General

(4) Insurance distribution firms

(5)

Credit firms

(6)

Consumer credit appointed representatives

Governing functions

The governing functions that apply to core SMCR firms

Various

×

×

×

Required functions

Compliance oversight function

SMF 16

×

Note (4)

×

×

Money laundering reporting function

SMF 17

×

×

Limited scope function

SMF 29

Part 1.2 (EEA firms)

(1)

Brief description of function

(2)

Function number

(3)

General

(4) Insurance distribution firms

(5)

Credit firms

(6)

Consumer credit appointed representatives

Required functions

Money laundering reporting function

SMF 17

×

Note (3)

Part 2 (Claims management firms)

(1)

Brief description of function

(2)

Function number

(3)

Class 1 claims management firms

(4)

Other claims management firms

Required functions

Compliance oversight function

SMF 16

×

Limited scope function

SMF 29

Notes to the table

Note (1): The categories of firm in the column headings of this table are to be interpreted in accordance with the classification of firms at SUP 10C Annex 1 7.1R. Therefore:

(1) column three of Parts 1.1 and 1.2 of the table (General) refers to SUP 10C Annex 1 7.1R(1);

(2) column four of Parts 1.1 and 1.2 of the table (Insurance distribution firms) refers to SUP 10C Annex 1 7.1R(2);

(3) column five of Parts 1.1 and 1.2 of the table (Credit firms) refers to SUP 10C Annex 1 7.1R(3);

(4) column six of Parts 1.1 and 1.2 of the table (Consumer credit appointed representatives) refers to SUP 10C Annex 1 7.1R(4);

(4) column three of Part 2 of the table (Class 1 claims management firms) refers to SUP 10C Annex 1 7.1R(8); and

(5) column four of Part 2 of the table (Other Claims management firms) refers to SUP 10C Annex 1 7.1R(9).

Note (2): SUP 10C Annex 1 7.3R sets out which part of the table applies to which firm.

Note (3): Not applicable to these firms because SUP 10C Annex 1 7.2R means that the table does not apply to firms in this category.

Note (4): However, this function does apply to a firm that is also a Class 1 firm as defined in CMCOB 7.2.5R(1) (Classification of firms for prudential resources purposes).

SUP 10C Annex 1 7.5R
  1. (1)

    2This rule applies to a firm in SUP 10C Annex 1 7.1R(4) (an appointed representative that has a limited permission).

  2. (2)

    The required functions apply in relation to the carrying on of the regulated activity for which it has limited permission.

  3. (3)

    The governing functions apply 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.

  4. (4)

    If the appointed representative meets the conditions in SUP 10A.1.16R(2), only one of the governing functions applies under (3), as appropriate, to an individual within that appointed representative who will be required to be an FCA-approved person.

SUP 10C Annex 1 7.6G

2The customer function also applies to a firm in SUP 10C Annex 1 7.1R(4) under SUP 10A (FCA Approved Persons in Appointed Representatives).

SUP 10C Annex 1 7.7R
  1. (1)

    2The table in SUP 10C Annex 1 7.8R sets out which FCA controlled functions apply to a limited scope SMCR firm that is covered by SUP 10C Annex 1 7.1R(5) or (6) (a sole trader or an authorised professional firm).

  2. (2)

    Firms in (1) are divided into the following categories for the purposes of this rule:

    1. (a)

      a UK SMCR firm;

    2. (b)

      an EEA SMCR firm; and

    3. (c)

      an overseas SMCR firm not falling into (b).

SUP 10C Annex 1 7.8R

2Table: Controlled functions applying to limited scope SMCR firms that are sole traders or authorised professional firms

(1)

Brief description of function

(2)

Function number

(3)

UK firm

(4)

EEA firm

(5)

Other overseas firm

Governing functions

Chief executive function

SMF 1

×

×

Executive director function

SMF 3

×

Chair of the governing body function

SMF 9

×

×

Head of third country branch function

SMF 19

×

×

Partner function

SMF 27

×

×

Required functions

Compliance oversight function

SMF 16

×

Money laundering reporting function

SMF 17

Limited scope function

SMF 29

×

Other high-level management functions

EEA branch senior manager function

SMF 21

×

×

Note: The categories of firm in the column headings of this table are to be interpreted in accordance with the classification of firms at SUP 10C Annex 1 7.2R. Therefore:

(a) column three (UK firm) refers to SUP 10C Annex 1 7.7R(2)(a);

(b) column four (EEA firm) refers to SUP 10C Annex 1 7.7R(2)(b); and

(c) column five (Other overseas firm) refers to SUP 10C Annex 1 7.7R(2)(c).

SUP 10C Annex 1 7.9R

2None of the FCA controlled functions apply to a limited scope SMCR firm in the table in SYSC 23 Annex 1 7.10R.

SUP 10C Annex 1 7.10R

2Table: Limited scope SMCR firms to which no controlled functions apply

Function

Comments

A firm in SYSC 23 Annex 1 6.8R (not-for-profit debt advice body)

A firm in SYSC 23 Annex 1 6.10R (internally managed AIF)

An EEA SMCR firm falling within SYSC 23 Annex 1 6.7R (credit firm with limited permission)

A firm is only excluded if it is an appointed representative

SUP 10C Annex 1 7.11G
  1. (1)

    2As explained in SUP 10C Annex 1 1.3G, the full range of FCA controlled functions that are applied to a class of firm by this Annex may not apply to every firm in that class.

  2. (2)

    For example, in the case of a limited scope SMCR firm that is a sole trader:

    1. (a)

      In practice it is unlikely that the governing functions will apply to a sole trader (see SUP 10C.4A.2G).

    2. (b)

      The money laundering reporting function does not apply to a sole trader with no employees (see SYSC 6.3.9R).

  3. (3)

    Another example is a firm falling within row (5) of the table in SYSC 23 Annex 1 6.4R (distribution of non-investment insurance contracts). SYSC 1 Annex 1 2.11R means that the money laundering reporting function does not apply to many or most such firms.