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Status: Please note you should read all Brexit changes to the FCA Handbook and BTS alongside the main FCA transitional directions. Where these directions apply the 'standstill', firms have the choice between complying with the pre-IP completion day rules, or the post-IP completion day rules. To see a full list of Handbook modules affected, please see Annex B to the main FCA transitional directions.

You are viewing the version of the document as on 2021-01-01.

Status: In this content, we have included all amendments made by EU exit-related instruments up to end September 2020. There will be more amendments to be made later this year, further to the September QCP.

Article 3 Qualitative criteria

Staff shall be deemed to have a material impact on an institution's risk profile where any of the following qualitative criteria are met:

  1. (1)

    the staff member is a member of the management body in its management function;

  2. (2)

    the staff member is a member of the management body in its supervisory function;

  3. (3)

    the staff member is a member of the senior management;

  4. (4)

    the staff member is responsible and accountable to the management body for the activities of the independent risk management function, compliance function or internal audit function;

  5. (5)

    the staff member has overall responsibility for risk management within a business unit as defined in Article 142(1)(3) of Regulation (EU) No 575/2013 which has had internal capital distributed to it in accordance with Directive 2013/36/EU UK law which implemented Article 73 of Directive 2013/36/EU that represents at least 2 % of the internal capital of the institution (a "material business unit");

  6. (6)

    the staff member heads a material business unit;

  7. (7)

    the staff member has managerial responsibility in one of the functions referred to in point (4) or in a material business unit and reports directly to a staff member identified pursuant to point (4) or (5);

  8. (8)

    the staff member has managerial responsibility in a material business unit and reports directly to the staff member who heads that unit;

  9. (9)

    the staff member heads a function responsible for legal affairs, finance including taxation and budgeting, human resources, remuneration policy, information technology, or economic analysis;

  10. (10)

    the staff member is responsible for, or is a member of, a committee responsible for the management of a risk category provided for in Directive 2013/36/EU UK law which implemented Articles 79 to 87 of Directive 2013/36/EU other than credit risk and market risk;

  11. (11)

    with regard to credit risk exposures of a nominal amount per transaction which represents 0.5 % of the institution's Common Equity Tier 1 capital and is at least EUR 5 million, the staff member:

    1. (a)

      is responsible for initiating credit proposals, or structuring credit products, which can result in such credit risk exposures; or

    2. (b)

      has authority to take, approve or veto a decision on such credit risk exposures; or

    3. (c)

      is a member of a committee which has authority to take the decisions referred to in point (a) or (b);

  12. (12)

    in relation to an institution to which the derogation for small trading book business provided for in Article 94 of Regulation (EU) No 575/2013 does not apply, the staff member:

    1. (a)

      has authority to take, approve or veto a decision on transactions on the trading book which in aggregate meet one of the following thresholds:

      1. (i)

        where the standardised approach is used, an own funds requirement for market risks which represents 0.5 % or more of the institution's Common Equity Tier 1 capital; or

      2. (ii)

        where an internal model-based approach is approved for regulatory purposes, 5 % or more of the institution's internal value-at-risk limit for trading book exposures at a 99th percentile (one-tailed confidence interval); or

    2. (b)

      is a member of a committee which has authority to take decisions set out in point (a);

  13. (13)

    the staff member has managerial responsibility for a group of staff members who have individual authorities to commit the institution to transactions and either of the following conditions is met:

    1. (a)

      the sum of those authorities equals or exceeds a threshold set out in point 11(a), point 11(b) or point 12(a)(i);

    2. (b)

      where an internal model-based approach is approved for regulatory purposes those authorities amount to 5 % or more of the institution's internal value-at-risk limit for trading book exposures at a 99th percentile (one-tailed confidence interval). Where the institution does not calculate a value-at-risk at the level of that staff member the value-at-risk limits of staff under the management of this staff member shall be added up;

  14. (14)

    with regard to decisions to approve or veto the introduction of new products, the staff member:

    1. (a)

      has the authority to take such decisions; or

    2. (b)

      is a member of a committee which has authority to take such decisions;

  15. (15)

    the staff member has managerial responsibility for a staff member who meets one of the criteria set out in points (1) to (14).