Certification

1.1

Unless otherwise stated, this Part applies to every firm that is:

1. (1) a CRR firm; or
2. (2) a credit union; or
3. (3) a third country CRR firm in relation to:
1. (a) the activities of its establishment in the UK; or
2. (b) if it does not have an establishment in the UK, its activities in the UK.

1.1A

This Part does not apply to a SRO firm.

1.2

In this Part, the following definitions shall apply:

employee

in relation to a firm, includes any person within the description set out in section 63E(9) of FSMA.

significant risk taker

means

1. (1) an employee of a CRR firm whose professional activities have a material impact on the firm’s risk profile, including any employee who falls within Remuneration 3.1(1);
2. (2) any employee of a credit union who:
1. (a) is a member of the governing body;
2. (b) is a member of the senior management;
3. (c) is responsible and accountable to the management body for the activities of the independent risk management function, compliance function or internal audit function;
4. (d) heads a function responsible for legal affairs, finance including taxation and budgeting, human resources, remuneration policy, information technology or economic analysis; or
3. (3) any employee of a third country CRR firm who would fall within (1) if it had applied in relation to him or her.

1.3

This Part does not apply to a function performed by:

1. (1) a person acting as an insolvency practitioner within the meaning of section 388 of the Insolvency Act 1986;
2. (2) a person acting as a nominee in relation to a voluntary arrangement under Part I (Company Voluntary Arrangements) of the Insolvency Act 1986;
3. (3) a person acting as an insolvency practitioner within the meaning of Article 3 of the Insolvency (Northern Ireland) Order 1989;
4. (4) a person acting as a nominee in relation to a voluntary arrangement under Part II (Company Voluntary Arrangements) of the Insolvency (Northern Ireland) Order 1989;
5. (5) a PRA approved person;
6. (5A) a person in relation to whom a notice under section 59ZZA has been given to an authorised person:
7. (6) a person who performs an FCA controlled function;
8. (7) a non-executive director in relation to their non-executive director function;
9. (8) a person acting as a resolution administrator appointed by the Bank of England in accordance with section 62B of the Banking Act 2009;
10. (9) a person appointed by the Bank of England as a director or a senior manager to a bank, building society, stabilisation vehicle or a banking group company for any purpose in connection with the exercise of a stabilisation option, or a stabilisation power; or
11. (10) a person appointed by the Treasury as a director or a senior manager to a bank, building society or to a banking group company for any purpose in connection with the exercise of the temporary public ownership stabilisation option, throughout the period of two years beginning with the date of that appointment.

2.1

A firm must take reasonable care to ensure that none of its employees performs a certification function under an arrangement entered into by the firm in relation to the carrying on by the firm of a regulated activity, unless the employee has a valid certificate issued by the firm.

2.2

For the purposes of this Part, any function that is performed by a significant risk taker for a firm is a certification function to the extent that the function requires the significant risk taker to be involved in one or more aspects of the firm’s affairs, so far as relating to a regulated activity carried on by the firm.

2.3

However, a significant risk taker does not perform a certification function for a firm under 2.2 if the significant risk taker is performing any controlled function for that firm.

2.4

To the extent that:

1. (1) a firm appoints a person to perform a function which, but for this rule, would be a certification function;
2. (2) the appointment solely is to provide cover for a certification employee whose absence is reasonably unforeseen; and
3. (3) the appointment is for less than four weeks;

such a person does not perform a certification function.