Related provisions for APER 4.6.5

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To access the FCA Handbook Archive choose a date between 1 January 2001 and 31 December 2004 (From field only).

The following is a non-exhaustive list of examples of conduct that would be in breach of rule SC1.(1) Failing to take reasonable steps to apportion responsibilities for all areas of the business under the approved person's control.(2) Failing to take reasonable steps to apportion responsibilities clearly among those to whom responsibilities have been delegated, which includes establishing confusing or uncertain:(a) reporting lines; or(b) authorisation levels; or(c) job descriptions
A senior conduct rules staff member should have reasonable grounds for believing that the delegate has the competence, knowledge, skill and time to deal with the issue. For instance, if the compliance department only has sufficient resources to deal with day-to-day issues, it would be unreasonable to delegate to it the resolution of a complex or unusual issue without ensuring it had sufficient capacity to deal with the matter adequately.
Delegating the authority for dealing with an issue or a part of the business to an individual or individuals (whether in-house or outside contractors) without reasonable grounds for believing that the delegate has the necessary capacity, competence, knowledge, seniority or skill to deal with the issue or to take authority for dealing with part of the business indicates a failure to comply with rule SC3 in COCON 2.2.3R.
3Behaviour of the type referred to in APER 4.5.8 G4 includes, but is not limited to:(1) failing to review the competence, knowledge, skills and performance of staff to assess their suitability to fulfil their duties, despite evidence that their performance is unacceptable (see APER 4.5.14 G);(2) giving undue weight to financial performance when considering the suitability or continuing suitability of an individual for a particular role (see APER 4.5.14 G);(3) allowing managerial

1Schedule to the Recognition Requirements Regulations, paragraph 2A


The composition of the management body of a [UK RIE] must reflect an adequately broad range of experience.


The management body must possess adequate collective knowledge, skills and experience in order to understand the [UK RIE’s] activities and main risks.


Members of the management body must -


commit sufficient time to perform their functions on the management body;


act with honesty, integrity and independence of mind; and


effectively -


assess and challenge, where necessary, the decisions of the senior management; and


oversee and monitor decision making.


The management body must -


define and oversee the implementation of governance arrangements that ensure the effective and prudent management of the [UK RIE] in a manner which promotes the integrity of the market, which at least must include the -


the segregation of duties in the organisation; and


the prevention of conflicts of interest;


monitor and periodically assess the effectiveness of the [UK RIE’s] governance arrangements; and


take appropriate steps to address any deficiencies found as a result of the monitoring under paragraph (b).


A [UK RIE] must -


devote adequate human and financial resources to the induction and training of members of the management body;


ensure that the management body has access to the information and documents it requires to oversee and monitor management decision-making; and


notify the FCA of the identity of all the members of its management body.


A [UK RIE] and, if it has a nomination committee, its nomination committee must engage a broad set of qualities and competences when recruiting persons to the management body, and for that purpose have a policy promoting diversity on the management body.


The number of directorships a member of the management body can hold at the same time must take into account individual circumstances and the nature, scale and complexity of the [UK RIE’s] activities.

9When determining under section 66A(5)(d) of the Act whether or not an SMF manager has taken such steps as a person in their position could reasonably be expected to take to avoid the contravention of a relevant requirement by the firm occurring (or continuing), additional considerations to which the FCA would expect to have regard include, but are not limited to:(1) the role and responsibilities of the SMF manager (for example, such steps as an SMF manager in a non-executive
(1) The FCA3 will determine a figure which will be based on a percentage of an individual’s “relevant income”. “Relevant income” will be the gross amount of all benefits received by the individual from the employment in connection with which the breach occurred (the “relevant employment”), and for the period of the breach. In determining an individual’s relevant income, “benefits” includes, but is not limited to, salary, bonus, pension contributions, share options and share schemes;