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SYSC 4.5 Management responsibilities maps for UK relevant authorised persons1

Application

SYSC 4.5.1R

This section applies to UK relevant authorised persons2.

SYSC 4.5.2R

There is no territorial limitation on the application of this section.

SYSC 4.5.3R

This section is not limited to regulated activities or other specific types of activities.

General rule

SYSC 4.5.4R

A firm must, at all times, have a comprehensive and up-to-date document (the management responsibilities map) that describes its management and governance arrangements, including:

  1. (1)

    details of the reporting lines and the lines of responsibility; and

  2. (2)

    reasonable details about:

    1. (a)

      the persons who are part of those arrangements; and

    2. (b)

      their responsibilities.

  3. (See further requirements in SYSC 4.5.7R.)

SYSC 4.5.5R

The firm's management responsibilities map must show clearly how any responsibilities covered by a firm's management responsibilities map are shared or divided between different persons.

SYSC 4.5.6G
  1. (1)

    One purpose of the management responsibilities map is to help the firm and the FCA satisfy themselves that the firm has a clear organisational structure (as required by SYSC).

  2. (2)

    It also helps the FCA to identify who it needs to speak to about particular issues and who is accountable if something goes wrong.

Specific requirements

SYSC 4.5.7R

A management responsibilities map must include:

  1. (1)
    1. (a)

      the names of all the firm's:

      1. (i)

        approved persons (including PRA approved persons);

      2. (ii)

        members of its governing body and (if different) management body who are not approved persons;

      3. (iii)

        senior management; and

      4. (iv)

        senior personnel; and

    2. (b)

      details of the responsibilities which they hold;

  2. (2)

    all responsibilities described in any current statement of responsibilities;

  3. (3)

    details of the management and governance arrangements relating to:

    1. (a)

      the FCA-prescribed senior management responsibilities; and

    2. (b)

      the PRA-prescribed senior management responsibilities;

      including the identity of the persons to whom those functions are allocated;

  4. (4)

    the reasons why (if it has done any of these things) the firm:

    1. (a)

      allocates responsibility for an FCA-prescribed senior management responsibility to more than one person jointly; or

    2. (b)

      divides responsibility for an FCA-prescribed senior management responsibility between different persons;

  5. (5)

    details about the functions allocated under SYSC 4.7.8R (Allocation of overall responsibility for a firm's activities, business areas and management functions), including:

    1. (a)

      what those activities, business areas and management functions are;

    2. (b)

      the management and governance arrangements relating to them;

    3. (c)

      details about whether and how they are shared or divided up;

    4. (d)

      the reasons why (if it has done this) the firm allocates responsibility for any such function to more than one person jointly; and

    5. (e)

      the identity of the persons to whom those functions are allocated;

  6. (6)

    matters reserved to the governing body (including the terms of reference of its committees) and, if different, the management body;

  7. (7)

    details of how the firm's management and governance arrangements fit together with:

    1. (a)

      its group; and

    2. (b)

      any other person in (8);

  8. (8)

    details of the extent to which the firm's management and governance arrangements are provided by, or shared with, other members of its group or others;

  9. (9)

    details of the reporting lines and the lines of responsibility (if any) between the firm and those who carry out functions in relation to them and:

    1. (a)

      other members of its group or other third parties;

    2. (b)

      persons acting as employees or officers of, or otherwise acting for, anyone in (a); or

    3. (c)

      committees or other bodies of anyone in (a);

  10. (10)

    reasonable information about the persons described or identified in the management responsibilities map, including:

    1. (a)

      whether they are employees of the firm and, if not, by whom they are employed;

    2. (b)

      if they are certification employees of the firm; and

    3. (c)

      the responsibilities they have in relation to other group members or any other person in (8); and

  11. (11)

    details of how (1) to (10) fit together and fit into the firm's management and governance arrangements as a whole.

SYSC 4.5.8R

SYSC 4.5.7R(1) does not require the firm to include the names of approved persons under SUP 10A.1.16BR (Appointed representatives).

Guidance about what should be in a management responsibilities map

SYSC 4.5.9G
  1. (1)

    The management responsibilities map should be consistent with the statements of responsibilities.

  2. (2)

    The statements of responsibilities and the management responsibilities map should all be prepared in a way that makes it simple to see how the responsibilities allocated in a particular statement of responsibilities fit into the overall system of management and governance of the firm.

SYSC 4.5.10G

The management responsibilities map should include functions that are:

  1. (1)

    included in a PRA controlled function under SUP 10C.9 (Minimising overlap with the PRA approved persons regime); or

  2. (2)

    excluded from the other overall responsibility function under SUP 10C.7.1R(2) (Exclusion for approved person with approval to perform other designated senior management functions).

SYSC 4.5.11G

A firm's management responsibilities map should demonstrate that there are no gaps in the allocation of responsibilities among its management.

SYSC 4.5.12G
  1. (1)

    This provision gives guidance on specific aspects of SYSC 4.5.5R and SYSC 4.5.7R.

  2. (2)

    A firm need only include summary details of the persons in SYSC 4.5.7R(1).

  3. (3)

    A firm's SMF managers and members of its governing body may overlap with its senior management and senior personnel. If so, the firm does not have to give the same details twice.

  4. (4)

    A firm should include details of individuals in addition to those in SYSC 4.5.7R(1), (3) and (5) if they are needed to make the management responsibilities map clear. For example, it may be necessary to include these details if the same individual has responsibilities in a number of different areas of the firm.

  5. (5)

    A firm should only include summary details about statements of responsibilities under SYSC 4.5.7R(2). There is no need to duplicate the statements of responsibilities. The main aim of including material about statements of responsibilities in the management responsibilities map is to show how the material:

    1. (a)

      fits into the firm's overall governance structure; and

    2. (b)

      for each statement of responsibilities, fits with the others.

  6. (6)

    The executive director function and the other overall responsibility function are defined generally and generically and can be performed by several people. Therefore, there is no need to explain why several people perform one of the functions.

  7. (7)

    A management responsibilities map should include a checklist confirming that all FCA-prescribed senior management responsibilities have been allocated or, if some have not been allocated, the reason why.

  8. (8)

    If:

    1. (a)

      any designated senior management function is performed by; or

    2. (b)

      any FCA-prescribed senior management responsibility is allocated to;

  9. more than one person, a firm's management responsibilities map should give details of how the performance or discharge of the responsibilities is to be carried out by those persons.

  10. (9)

    The material in SUP 10C.11.31G and SUP 10C.11.32G (recording sharing and splitting of responsibilities in statements of responsibilities) also applies to a management responsibilities map.

Small firms

SYSC 4.5.13G
  1. (1)

    The FCA expects that the management responsibilities map of a small and non-complex firm is likely to be simple and short. It may be no more than a single sheet of paper.

  2. (2)

    A firm is likely to be small and non-complex for these purposes if:

    1. (a)

      it is:

      1. (i)

        a small CRR firm as defined in the part of the PRA's rulebook called “Allocation of responsibilities”; or

      2. (ii)

        a credit union that meets the size requirements for small CRR firms under the PRA's requirements in (a)(i);

    2. (b)

      it conducts a limited number of simple business lines; and

    3. (c)

      it does not rely on group governance arrangements.

Single document

SYSC 4.5.14R

A management responsibilities map must be a single document.

SYSC 4.5.15G
  1. (1)

    The requirement for a management responsibilities map to be a single document does not mean that it has to be a single sheet of paper or must be capable of being reproduced as one.

  2. (2)

    A management responsibilities map may be made up of a folder with several files or items in it.

  3. (3)

    However, a firm that creates a management responsibilities map in this way should ensure that its approach is compatible with it being a single document. In particular:

    1. (a)

      there should be a single item that identifies every item making up the management responsibilities map and shows where each item can be found;

    2. (b)

      for example, this could be a contents list of the items making up the management responsibilities map with electronic links to each of them;

    3. (c)

      the management responsibilities map should be complete by itself and should not refer to documents not forming part of it;

    4. (d)

      every item in the management responsibilities map should only contain material about the matters required by this section;

    5. (e)

      for example, if there is relevant material in the firm's report and accounts, the folder should only contain the relevant parts or a link to those parts.

  4. (4)

    The folder and its contents should be easily identifiable as the firm's management responsibilities map.

  5. (5)

    Although a management responsibilities map can be large and complex, SYSC 4.5.13G explains that, for small non-complex firms, it may be small and simple.

Purpose of SYSC 4 Annex 1G (The main business activities and functions of a relevant authorised person)

SYSC 4.5.16G
  1. (1)

    This provision explains the purpose of SYSC 4 Annex 1G.

  2. (2)

    A firm may use it as a checklist to see whether its management responsibilities map covers all its business activities.

  3. (3)

    A firm may wish to prepare its management responsibilities map using the same split of activities.

  4. (4)

    If a firm uses SYSC 4 Annex 1G to help it prepare its management responsibilities map, it should bear in mind that it is not comprehensive (see SYSC 4.5.20G).

  5. (5)

    As mentioned in SYSC 4.7.37G, a firm may also use it as a checklist when allocating responsibilities under SYSC 4.7.8R (Allocation of overall responsibility for a firm’s activities, business areas and management functions).

SYSC 4.5.17G

There is no direct link between SYSC 4 Annex 1G and the senior management regime for relevant authorised persons.Contents of SYSC 4 Annex 1G (The main business activities and functions of a relevant authorised person)

SYSC 4.5.18G

SYSC 4 Annex 1G sets out the main business activities and functions that the FCA thinks are likely to be relevant to most firms, although the FCA does not require firms to organise themselves in this way.

SYSC 4.5.19G

Most or all of these activities and functions will normally apply to a complex firm. Many of them may not apply to a non-complex firm.

SYSC 4.5.20G
  1. (1)

    SYSC 4 Annex 1G is not comprehensive. While it is intended to cover most front-line business activities of a relevant authorised person, it does not cover all internal oversight and monitoring functions.

  2. (2)

    For example, it does not cover compliance or internal audit or the firm's governing body or its committees.

Records

SYSC 4.5.21G

A firm should consider past versions of its management responsibilities map as an important part of its records and as an important resource for the FCA in supervising the firm.

SYSC 4.5.22G

Past versions of a firm's management responsibilities map form part of its records under SYSC 9.1 (General rules on record-keeping).