Use of Skilled Persons

1.1

This Part applies to all firms.

1.2

In this Part, the following definition shall apply:

relevant requirement

has the meaning specified in section 204A(2) of FSMA.

2.1

A firm must, including where applicable in complying with the Fundamental Rules, give the PRA information about the cost of the skilled person’s report. This includes both an initial estimate of the cost as well as the cost of the completed report.

3.1

When a firm appoints a skilled person the firm must, in a contract with the skilled person:

1. (1) require and permit the skilled person during and after the course of their appointment:
1. (a) to cooperate with the PRA in the discharge of its functions under relevant legislation in relation to the firm; and
2. (b) to communicate to the PRA information on, or the skilled person’s opinion on, matters of which they have, or had, become aware in their capacity as skilled person reporting on the firm in the following circumstances:
1. (i) the skilled person reasonably believes, as regards the firm concerned:
1. (A) that there is or has been, or may be or may have been, a contravention of any relevant requirement that applies to the firm concerned; and
2. (B) that the contravention may be of material significance to the PRA in determining whether to exercise, in relation to the firm concerned, any functions conferred on the PRA by or under relevant legislation; or
2. (ii) the skilled person reasonably believes that the information on, or their opinion on, those matters may be of material significance to the PRA in determining whether the firm concerned satisfies and will continue to satisfy the threshold conditions; or
3. (iii) the skilled person reasonably believes that firm is not, may not be or may cease to be a going concern;
2. (2) require the skilled person to prepare a report or collect or update information, as notified to the firm by the PRA, within the time specified by the PRA; and
3. (3) waive any contractual or other duty of confidentiality owed by the skilled person to the firm which might limit the provision of information or opinion by that skilled person to the PRA in accordance with (1) or (2).

3.2

A firm must ensure that the contract it makes with the skilled person under 3.1 requires and permits the skilled person to provide the following to the PRA if requested to do so:

1. (1) interim reports;
2. (2) source data, documents and working papers;
3. (3) copies of any draft reports given to the firm; and
4. (4) specific information about the planning and progress of the work to be undertaken (which may include project plans, progress reports including percentage of work completed, details of time spent, costs to date, and details of any significant findings and conclusions).

3.3

A firm must ensure that the contract required by 3.1:

1. (1) is governed by the laws of a part of the UK;
2. (2) expressly:
1. (a) provides that the PRA has a right to enforce the provisions included in the contract under 3.1, 3.2 and 3.3(2)(b)-(d);
2. (b) provides that, in proceedings brought by the PRA for the enforcement of those provisions, the skilled person is not to have available by way of defence, set-off or counterclaim any matter that is not relevant to those provisions;
3. (c) (if the contract includes an arbitration agreement) provides that the PRA is not, in exercising the right in (a), to be treated as a party to, or bound by, the arbitration agreement; and
4. (d) provides that the provisions included in the contract under 3.1, 3.2 and 3.3(2)(a)-(c) are irrevocable and may not be varied or rescinded without the PRA’s consent; and
3. (3) is not varied or rescinded in such a way as to extinguish or alter the provisions referred to in (2)(d).

3.4

A firm must give the PRA a copy of the draft contract required by 3.1 before it is made with the skilled person.

4.1

When a firm appoints a skilled person, a firm must, including where applicable in complying with the Fundamental Rules, take reasonable steps to ensure that a skilled person delivers a report or collects or updates information in accordance with the terms of the skilled person’s appointment.