Part

SUP Supervision manual

Chapter

Approved persons

Printed on: 15/05/2024

Rulebook at: 30/04/2011

SUP 10

Approved
persons

SUP 10.1

Application

  • 01/12/2004

General

SUP 10.1.1

handbook-rule
This chapter applies to every firm.
  • 21/06/2001

SUP 10.1.2

handbook-guidance
This chapter is also relevant to every approved person.
  • 21/06/2001

SUP 10.1.3

handbook-guidance
The rules in this chapter specify descriptions of controlled functions under section 59 of the Act (Approval for particular arrangements).
  • 01/11/2007

SUP 10.1.4

handbook-guidance
The directions in this chapter relate to the manner in which a firm must apply for the FSA's approval under section 59 of the Act and other procedures.
  • 21/06/2001

Overseas firms: UK services

SUP 10.1.6

handbook-rule
This chapter does not apply to an overseas firm in relation to regulated activities which are carried on in the United Kingdom other than from an establishment maintained by it or its appointed representative in the United Kingdom.
  • 21/06/2001

Overseas firms: UK establishments

SUP 10.1.7

handbook-rule
Only the following controlled functions apply to an overseas firm which maintains an establishment in the United Kingdom from which regulated activities are carried on:
(1) the director function where the person performing that function:
(a) has responsibility for the regulated activities of a UKbranch which are likely to enable him to exercise significant influence over that branch; or
(b) is someone whose decisions or actions are regularly taken into account by the governing body of that branch.
(2) the non-executive director function where the person performing that function:
(a) has responsibility for the regulated activities of a UKbranch which is likely to enable him to exercise significant influence over that branch; or
(b) is someone whose decisions or actions are regularly taken into account by the governing body of that branch.
(3) the chief executive function;
(4) the required functions;
(5) the systems and controls function;
(6) the significant management function in so far as the function relates to:
(a) designated investment business other than dealing in investments as principal, disregarding article 15 of the Regulated Activities Order; or
(b) processing confirmations, payments, settlements, insurance claims, client money and similar matters in so far as this relates to designated investment business; and
(7) the customer function.
  • 06/08/2009

Incoming EEA firms, incoming Treaty firms and UCITS qualifiers

SUP 10.1.9

handbook-rule
This chapter does not apply to:
(1) an incoming EEA firm; or
(2) an incoming Treaty firm; or
(3) a UCITS qualifier;
if and in so far as the question of whether a person is fit and proper to perform a particular function in relation to that firm is reserved, under any of the Single Market Directives, the Treaty or the UCITS Directive to an authority in a country or territory outside the United Kingdom.
  • 21/06/2001

SUP 10.1.10

handbook-guidance
SUP 10.1.9 R reflects the provisions of section 59(8) of the Act and, in relation to an incoming Treaty firm and a UCITS qualifier, the Treaty and the UCITS Directive. It preserves the principle of Home State prudential regulation. In relation to an incoming EEA firm exercising an EEA right, or an incoming Treaty firm exercising a Treaty right, the effect is to reserve to the Home State regulator the assessment of the fitness and propriety of a person performing a function in the exercise of that right. A member of the governing body, or the notified UKbranchmanager, of an incoming EEA firm, acting in that capacity, will not therefore have to be approved by the FSA under the Act.
  • 21/06/2001

SUP 10.1.11

handbook-guidance
But an incoming EEA firm (other than an EEA pure reinsurer), or incoming Treaty firm, will have had to consider the impact of the Host State rules with which it is required to comply when carrying on a passported activity or Treaty activity through a branch in the United Kingdom. An incoming EEA firm (other than an EEA pure reinsurer) will have been notified of those provisions under Part II of Schedule 3 to the Act in the course of satisfying the conditions for authorisation in the United Kingdom.
  • 06/03/2009

SUP 10.1.12

handbook-guidance
An incoming EEA firm will have to consider, for example, the position of a branch manager based in the United Kingdom who may also be performing a function in relation to the carrying on of a regulated activity not covered by the EEA right of the firm. In so far as the function is within the description of a controlled function, the firm will need to seek approval for that person to perform that controlled function.
  • 21/06/2001

Incoming EEA firms: passported activities from a branch

SUP 10.1.13

handbook-rule
Only the following controlled functions apply to an incoming EEA firm with respect to its passported activities carried on from a branch in the United Kingdom:
(1) [deleted]
(2) [deleted]
(3) the money laundering reporting function;
(4) the significant management function in so far as the function relates to:
(a) designated investment business other than dealing in investments as principal, disregarding article 15 of the Regulated Activities Order; or
(b) processing confirmations, payments, settlements, insurance claims, client money and similar matters in so far as this relates to designated investment business; and
(5) [deleted]
(6) the customer function other than where this relates to the function in SUP 10.10.7A R (4).
  • 06/08/2008

SUP 10.1.13D

handbook-rule
If an incoming EEA firm is an EEA pure reinsurer then SUP 10.1.13 R does not apply.
  • 06/03/2009

Incoming EEA firms etc with top-up permission activities from a UK branch

SUP 10.1.14

handbook-rule
In relation to the activities of a firm for which it has a top-up permission, only the following controlled functions apply:
(1) the required functions, other than the apportionment and oversight function and the compliance oversight function;
(2) the significant management function in so far as it relates to:
(a) designated investment business other than dealing in investments as principal, disregarding article 15 of the Regulated Activities Order; or
(b) processing confirmations, payments, settlements, insurance claims, client money and similar matters in so far as this relates to designated investment business; and
(3) [deleted]
(4) the customer function.
  • 06/08/2008

Appointed representatives

SUP 10.1.16

handbook-rule
The descriptions of the following controlled functions apply to an appointed representative of a firm, except an introducer appointed representative, as they apply to a firm:
(1) the governing functions, subject to SUP 10.1.16A R and except for a tied agent of an EEA MiFID investment firm; and
(2) the customer function other than in relation to acting in the capacity of an investment manager (see SUP 10.10.7A R (6)).
  • 01/11/2007

SUP 10.1.16A

handbook-rule
(1) SUP 10.1.16 R is modified in relation to an appointed representative meeting the conditions in (2) so that only one of the following governing functions:
(a) director function; or
(b) chief executive function; or
(c) partner function; or
(d) director of unincorporated association function;

applies, as appropriate, to an individual within that appointed representative who will be required to be an approved person.
(2) The conditions are that:
(a) the scope of appointment of the appointed representative includes insurance mediation activity in relation to non-investment insurance contracts but no other regulated activity, and
(b) the principal purpose of the appointed representative is to carry on activities other than regulated activities.
  • 21/06/2001

Members of a profession

SUP 10.1.18

handbook-rule
(1) This chapter, except in respect of the required functions, does not apply to an authorised professional firm respect of its non-mainstream regulated activities, subject to (2).
(2) Where the authorised professional firm has appointed approved persons to perform the governing functions with equivalent responsibilities for the firm's non-mainstream regulated activities and other regulated activities, for the firm's non-mainstream regulated activities this chapter applies with respect to the governing functions and the required functions (other than the apportionment and oversight function) only.
  • 01/04/2009

Oil market participants, service companies, energy market participants, subsidiaries of local authorities or registered social landlords and insurance intermediaries.

SUP 10.1.21

handbook-rule
The descriptions of significant influence functions, other than the required functions, and if the firm is a MiFID investment firm, the governing functions, do not extend to activities carried on by a firm whose principal purpose is to carry on activities other than regulated activities and which is:
(1) an oil market participant; or
(2) a service company; or
(3) an energy market participant; or
(4) a wholly owned subsidiary of:
(a) a local authority; or
(b) a registered social landlord; or
(5) a firm with permission to carry on insurance mediation activity in relation to non-investment insurance contracts but no other regulated activity.
  • 01/11/2007

SUP 10.1.22

handbook-guidance
It will be a matter of fact in each case whether, having regard to all the circumstances, including in particular where the balance of the business lies, a firm's principal purpose is to carry on activities other than regulated activities. If a firm wishes to rely on SUP 10.1.21 R, it should be in a position to demonstrate that its principal purpose is to carry on activities other than regulated activities.
  • 20/09/2001

Committees of the Society of Lloyd's

SUP 10.1.23

handbook-rule
(1) For the purpose of SUP 10.6.4 R (the director function), "director" includes an executive member of a committee to which the Council of the Society of Lloyd's directly delegates authority to carry out the Society's regulatory functions.
(2) For the purpose of SUP 10.6.8 R (the non-executive director function), "non-executive director" includes a non-executive member of a committee to which the Council of the Society of Lloyd's directly delegates authority to carry out the Society's regulatory functions.
  • 21/06/2001

Insolvency practitioners

SUP 10.1.26

handbook-rule
This chapter does not apply to a function performed by:
(1) a person acting as an insolvency practitioner within the meaning of section 388 of the Insolvency Act 1986; or
(2) a person acting as a nominee in relation to a voluntary arrangement under Parts I (Company Voluntary Arrangements) and VIII (Individual Voluntary Arrangements) of the Insolvency Act 1986; or
(3) a person acting as an insolvency practitioner within the meaning of Article 3 of the Insolvency (Northern Ireland) Order 1989; or
(4) a person acting as a nominee in relation to a voluntary arrangement under Parts II (Company Voluntary Arrangements) and VIII (Individual Voluntary Arrangements) of the Insolvency (Northern Ireland) Order 1989.
  • 21/06/2001

SUP 10.2

Purpose

  • 01/12/2004

SUP 10.2.1

handbook-guidance
The immediate purpose of SUP 10.3 to SUP 10.10 is to specify, under section 59 of the Act, descriptions of the 16 controlled functions which are listed in SUP 10.4.5 R. The underlying purpose is to establish, and mark the boundaries of, the "approved persons regime".
  • 06/02/2008

SUP 10.3

Provisions related to the act

  • 01/12/2004

Arrangements and regulated activities

SUP 10.3.1

handbook-rule
A function is a controlled function only to the extent that it is performed under an arrangement entered into by:
(1) a firm; or
(2) a contractor of the firm;
in relation to the carrying on by the firm of a regulated activity.
  • 21/06/2001

SUP 10.3.2

handbook-guidance
Sections 59(1) and (2) of the Act provide that approval is necessary in respect of a controlled function which is performed under an arrangement entered into by a firm, or its contractor (typically an appointed representative), in relation to a regulated activity.
  • 21/06/2001

SUP 10.3.3

handbook-guidance
Arrangement is defined in section 59(10) of the Act as any kind of arrangement for the performance of a function which is entered into by a firm or any of its contractors with another person and includes the appointment of a person to an office, his becoming a partner, or his employment (whether under a contract of service or otherwise). For the provisions in this chapter relating to outsourcing, see SUP 10.12.3 G and SUP 10.12.4 G.
  • 01/12/2002

SUP 10.3.4

handbook-guidance
If, however, a firm is a member of a group, and the arrangements for the performance of a controlled function of the firm are made by, say, the holding company, the person performing the function will only require approval if there is an arrangement (under section 59(1)) or a contract (under section 59(2)) between the firm and holding company permitting this. This need not be a written contract but could arise, for example, by conduct, custom and practice.
  • 21/06/2001

SUP 10.3.5

handbook-guidance
The arrangement must be "in relation to" the carrying on of a regulated activity. Regulated activities are defined in the Glossary by reference to the Regulated Activities Order. This order prescribes the activities which are regulated activities for the purposes of the Act.
  • 21/06/2001

SUP 10.4

Specification of functions

  • 01/12/2004

SUP 10.4.1

handbook-rule
Each of the functions described in SUP 10.4.5 R (the table of controlled functions) is a controlled function.
  • 01/12/2002

SUP 10.4.3

handbook-guidance
The fact that a person may be approved for one purpose does not have the effect of bringing all his activities within that controlled function.
  • 01/12/2002

SUP 10.4.5

handbook-rule

Controlled functions

  • 06/08/2009

SUP 10.5

Significant influence functions

  • 01/12/2004

What are the significant influence functions?

SUP 10.5.1

handbook-guidance
  • 01/11/2007

The first condition

SUP 10.5.2

handbook-rule
Each significant influence function is one which is likely to result in the person responsible for its performance exercising a significant influence on the conduct of a firm's affairs, so far as relating to a regulated activity of the firm.
  • 21/06/2001

SUP 10.5.3

handbook-guidance
SUP 10.5.2 R gives effect to section 59(5) of the Act (where this provision is referred to as the first condition).
  • 21/06/2001

SUP 10.5.4

handbook-guidance
Whether a controlled function is likely to result in the person responsible for its performance exercising significant influence on the conduct of the firm's affairs is a question of fact in each case. The FSA has identified the significant influence functions as satisfying this condition.
  • 01/11/2007

Periods of less than 12 weeks

SUP 10.5.5

handbook-rule
If:
(1) a firm appoints an individual to perform a function which, but for this rule, would be a significant influence function;
(2) the appointment is to provide cover for an approved person whose absence is:
(a) temporary; or
(b) reasonably unforeseen; and
(3) the appointment is for less than 12 weeks in a consecutive 12 month period;
the description of the relevant significant influence function does not relate to those activities of that individual.
  • 21/06/2001

SUP 10.5.6

handbook-guidance
SUP 10.5.5 R enables cover to be given for, say, holidays and emergencies and avoids the need for the precautionary approval of, for example, a deputy. However, as soon as it becomes apparent that a person will be performing a controlled function for more than 12 weeks, the firm should apply for approval.
  • 21/06/2001

SUP 10.6

Governing functions

  • 01/12/2004

Introduction

SUP 10.6.1

handbook-guidance
Every firm will have one or more persons responsible for directing its affairs. These persons will be performing the governing functions and will be required to be approved persons unless the application provisions in SUP 10.1, or the particular description of a controlled function, provide otherwise. For example, each director of a company incorporated under the Companies Acts will perform the governing function in relation to that company.
  • 21/06/2001

SUP 10.6.1A

handbook-guidance
A sole trader does not fall within the description of the governing functions.
  • 01/02/2007

What the governing functions include

SUP 10.6.2

handbook-rule
Each of the governing functions (other than the non-executive director function and the function described in SUP 10.6.4 R (2)) includes where apportioned under SYSC 2.1.1 R or SYSC 4.3.1 R and SYSC 4.4.3 R:
(1) the systems and controls function; and
(2) the significant management function.
  • 06/08/2009

SUP 10.6.3

handbook-guidance
The effect of SUP 10.6.2 R is that a person who is approved to perform a governing function (other than the non-executive function and the function described in SUP 10.6.4 R (2)) will not have to be specifically approved to perform the systems and controls function or the significant management function. A person who is approved to perform a governing function will have to be additionally approved before he can perform any of the required functions or the customer function.
  • 06/08/2009

SUP 10.6.3A

handbook-guidance
A firm carrying on insurance mediation activity, other than a sole trader, must allocate to a director or senior manager the responsibility for the firm'sinsurance mediation activity (MIPRU 2.2.1 R). MIPRU 2.2.2 R (1) provides that the firm may allocate this responsibility to one or more of the persons performing a governing function (other than the non-executive director function).
  • 06/01/2008

SUP 10.6.3B

handbook-guidance
Where a person performing a governing function is also responsible for the firm's insurance mediation activity, the words "(insurance mediation)" will be inserted after the relevant controlled function (see MIPRU 2.2.5 G ).
  • 01/11/2007

Director function (CF1)

SUP 10.6.4

handbook-rule
If a firm is a body corporate (other than a limited liability partnership), the director function is the function of acting in the capacity of either a:
(1) director (other than non-executive director) of that firm; or
(2) a person:
(a) who is a director, partner, officer, member (if the parent undertaking or holding company is a limited liability partnership), senior manager, or employee (other than a non-executive director) of a parent undertaking or holding company (except where that parent undertaking or holding companyhas a Part IV permission or is regulated by an EEA regulator); and
(b) whose decisions or actions are regularly taken into account by the governing body of the firm.
  • 06/10/2009

SUP 10.6.5

Examples of where SUP 10.6.4 R (2) would apply include (but are not limited to):
(1) a chairman of an audit committee of a parent undertaking or holding company of a UK firm where that audit committee is working for that UK firm (that is, functioning as the audit committee for the group); or
(2) a director (other than a non-executive director) of a parent undertaking or holding company of a UK firm exercising significant influence by way of his involvement in taking decisions for that UK firm; or
(3) an individual (such as a senior manager) of a parent undertaking or holding company of a UK firm who is responsible for and/or has significant influence in setting the objectives for and the remuneration of executive directors of that UK firm; or
(4) an individual who is a director (other than a non-executive director) or a senior manager of a parent undertaking or holding company of a UK firm who is accustomed to influencing the operations of that UK firm, and acts in a manner in which it can reasonably be expected that an executive director or senior manager of that UK firm would act; or
(5) an individual of an overseas firm which maintains an establishment in the United Kingdom from which regulated activities are carried on where that individual has responsibilities for those regulated activities which are likely to enable him to exercise significant influence over the UK branch.
  • 06/08/2009

SUP 10.6.7

handbook-guidance
A director can be a body corporate and may accordingly require approval as an approved person in the same way as a natural person may require approval.
  • 21/06/2001

Non-executive director function (CF2)

SUP 10.6.8

handbook-rule
(1) If a firm is a body corporate, the non-executive director function is the function of acting in the capacity ofeither a:
(a) non-executive director of that firm ; or
(b) non-executive director of a parent undertaking or holding company (except where that parent undertaking or holding companyhas a Part IV permission or is regulated by an EEA regulator) whose decisions, or actions are regularly taken into account by the governing body of the firm.
(2) If a firm is a long-term insurer, the non-executive director function is also the function of acting in the capacity of an individual (other than an individual performing the director function or the non-executive director function under (1)) who, as a member of a committee having the purpose of a with-profits committee, has responsibility in relation to governance arrangements for with-profits business under COBS 20.3 (Principles and Practices of Financial Management).
  • 06/10/2009

SUP 10.6.9

handbook-guidance
Examples of where SUP 10.6.8 R (1)(b) would apply include (but are not limited to):
(1) an individual who is a non-executive director of a parent undertaking or holding company who takes an active role in the running of the business of a UK firm, for example, as a member of a board or committee (on audit or remuneration) of that firm; or
(2) an individual who is a non-executive director of a parent undertaking or holding company having significant influence in setting and monitoring the business strategy of the UK firm; or
(3) an individual who is a non-executive director of a parent undertaking or holding company of a UK firm involved in carrying out responsibilities such as scrutinising the approach of executive management, performance, or standards of conduct of the UK firm; or
(4) an individual who is a non-executive director of a parent undertaking or holding company of a UK firm who is accustomed to influence the operations of the UK firm, and acts in a way in which it can reasonably be expected that a non-executive director of the UK firm would act; or
(5) an individual who is a non-executive director of an overseas firm which maintains a branch in the United Kingdom from which regulated activities are carried on where that individual has responsibilities for those regulated activities which are likely to enable him to exercise significant influence over the UKbranch.
  • 06/08/2009

Guidance on CF1 and CF2

SUP 10.6.10

(1) This paragraph explains the basis on which the director function and non-executive director function are applied to persons who have a position with the firm's parent undertaking or holding company under SUP 10.6.4 R (2) or SUP 10.6.8 R (1)(b) .
(2) The basic position is set out in SUP 10.3.4 G. As is the case with all controlled functions, SUP 10.6.4 R (2) and SUP 10.6.8 R (1)(b) are subject to the overriding provisions in SUP 10.3.1 R, which sets out the requirements of sections 59(1) and (2) of the Act. This means that unless the firm has an arrangement or a contract permitting the performance of these roles by the persons concerned, these persons will not be performing these controlled functions. Therefore, the FSA accepts that there will be cases in which a person performing these roles will not require approval.
(3) However the FSA expects that in general a person who performs these roles will perform the director function or the non-executive director function. This is because the FSA would expect that a firm that allows major decisions to be taken by a group decision-making body will do so on the basis of a formal delegation from the firm's governing body. This delegation will amount to an arrangement for the purposes of section 59 of the Act.
  • 06/08/2009

Chief executive function (CF3)

SUP 10.6.11

handbook-rule
The chief executive function is the function of acting in the capacity of a chief executive of a firm.
  • 21/06/2001

SUP 10.6.13

handbook-guidance
This function is having the responsibility, alone or jointly with one or more others, under the immediate authority of the governing body, for the conduct of the whole of the business (or relevant activities); or, in the case of a branch in the United Kingdom of an overseas firm, for all of the activities subject to the UK regulatory system.
  • 21/06/2001

SUP 10.6.14

handbook-guidance
For a branch in the United Kingdom of an overseas firm, the FSA would not normally expect the overseas chief executive of the firm as a whole to be approved for this function where there is a senior manager under him with specific responsibility for those activities of the branch which are subject to the UKregulatory system. In some circumstances, the person within the firm responsible for UK operations may, if the function is likely to enable him to exercise significant influence over the branch, also perform the chief executive function (see SUP 10.7.4 G).
  • 01/11/2007

SUP 10.6.15

handbook-guidance
A person performing the chief executive function may be a member of the governing body but need not be. If the chairman of the governing body is also the chief executive, he will be discharging this function. If the responsibility is divided between more than one person but not shared, there is no person exercising the chief executive function. But if that responsibility is discharged jointly by more than one person, each of those persons will be performing the chief executive function.
  • 21/06/2001

SUP 10.6.16

handbook-guidance
Note that a body corporate may be a chief executive. If so, it will need to be approved to perform the chief executive function.
  • 21/06/2001

Partner function (CF4)

SUP 10.6.17

handbook-rule
(1) If a firm is a partnership, the partner function is the function of acting in the capacity of a partner in that firm.
(2) If the principal purpose of the firm is to carry on one or more regulated activities, each partner performs the partner function.
(3) If the principal purpose of the firm is other than to carry on regulated activities:
(a) a partner performs the partner function to the extent only that he has responsibility for a regulated activity; and
(b) a partner in a firm will be taken to have responsibility for each regulated activity except where the partnership has apportioned responsibility to another partner or group of partners.
  • 21/06/2001

SUP 10.6.19

handbook-guidance
Any apportionment referred to in SUP 10.6.17 R (3)(b) will have taken place under SYSC 2.1.1 R or SYSC 4.3.1 R and SYSC 4.4.3 R. The FSA may ask to see details of the apportionment but will not require, as a matter of course, a copy of the material which records this (see SYSC 2.2).
  • 01/04/2009

SUP 10.6.20

handbook-guidance
The effect of SUP 10.1.18 R is that regulated activity in SUP 10.6.17 R (and elsewhere) is to be taken as not including an activity that is a non-mainstream exempt regulated activity. Therefore, a partner whose only regulated activities are incidental to his professional services, in a partnership whose principal purpose is to carry on other than regulated activities, need not be an approved person. What amounts to the principal purpose of the firm is a matter of fact in each case having regard to all the circumstances, including the activities of the firm as a whole. Any regulated activities which such a partner carries on are not within the description of the partner function.
  • 21/06/2001

SUP 10.6.21

handbook-rule
If a firm is a limited liability partnership, the partner function extends to the firm as if the firm were a partnership and a member of the firm were a partner.
  • 21/06/2001

SUP 10.6.23

handbook-rule
If a partnership is registered under the Limited Partnership Act 1907, the partnerfunction does not extend to any function performed by a limited partner.
  • 21/06/2001

Director of unincorporated association function (CF5)

SUP 10.6.24

handbook-rule
If a firm is an unincorporated association, the director of unincorporated association function is the function of acting in the capacity of a director of the unincorporated association.
  • 21/06/2001

Small friendly society function (CF6)

SUP 10.6.26

handbook-rule
(1) If a firm is a non-directive friendly society, the small friendly society function is the function of directing its affairs, either alone or jointly with others.
(2) If the principal purpose of the firm is to carry on regulated activities, each person with responsibility for directing its affairs performs the controlled function.
(3) If the principal purpose of the firm is other than to carry on regulated activities, a person performs the small friendly society function only to the extent that he has responsibility for a regulated activity.
  • 21/06/2001

SUP 10.6.28

handbook-rule
(1) Each person on the non-directive friendly society's governing body will be taken to have responsibility for its regulated activities, unless the firm has apportioned this responsibility to one particular individual to whom it is reasonable to give this responsibility.
(2) The individual need not be a member of the governing body.
  • 21/06/2001

SUP 10.6.29

handbook-guidance
(1) Typically a non-directive friendly Society will appoint a "committee of management" to direct its affairs. However, the governing arrangements may be informal and flexible. If this is the case, the FSA would expect the society to resolve to give responsibility for the carrying on of regulated activities to one individual who is appropriate in all the circumstances. That individual may, for example, have the title of chief executive or similar. The individual would have to be an approved person under SUP 10.6.26 R.
(2) Any apportionment of responsibilities will have taken place under SYSC 2.1.1 R. The FSA may ask to see details of the apportionment but will not require, as a matter of course, a copy of the material which records this (seeSYSC 2.2).
  • 21/06/2001

SUP 10.6.30

handbook-rule
(1) [deleted]
(2) [deleted]
  • 01/02/2007

SUP 10.7

Required functions

  • 01/12/2004

Apportionment and oversight function (CF8)

SUP 10.7.1

handbook-rule
The apportionment and oversight function is the function of acting in the capacity of a director or senior manager responsible for either or both of the apportionment function and the oversight function set out in SYSC 2.1.3 R or SYSC 4.4.5 R.
  • 01/04/2009

SUP 10.7.2A

handbook-guidance
In requiring someone to apportion responsibility, a common platform firm should not apply for that person or persons to be approved to perform the apportionment and oversight function (see SUP 10.7.1 R, SYSC 2.1.3 R and SYSC 1.1.3 R (5)).
  • 01/11/2007

SUP 10.7.3

handbook-guidance
The fact that there is a person performing the apportionment and oversight function, and who has responsibility for activities subject to regulation by the FSA, may have a bearing on whether a manager who is based overseas will be performing a controlled function. It is a factor to take into account when assessing the likely influence of the overseas manager.
  • 21/06/2001

SUP 10.7.4

handbook-guidance
Generally, in relation to a UK establishment of an overseas firm or a firm which is part of an overseas group, where an overseas manager's responsibilities in relation to the United Kingdom are strategic only, he will not need to be an approved person. However, where, in accordance with SYSC 3 or SYSC 4 to SYSC 10, he is responsible for implementing that strategy in the United Kingdom, and has not delegated that responsibility to a senior manager in the United Kingdom, he is likely to be performing a controlled function, such as, for example, the chief executive function.
  • 06/04/2011

SUP 10.7.4A

handbook-guidance
A firm carrying on insurance mediation activity, other than a sole trader, must allocate to a director or senior manager the responsibility for the firm's insurance mediation activity (MIPRU 2.2.1 R). MIPRU 2.2.2 R (2) provides that the firm may allocate this responsibility to the person performing the apportionment and oversight function.
  • 06/01/2008

SUP 10.7.4B

handbook-guidance
Where the person performing the apportionment and oversight function is also responsible for the firm's insurance mediation activity, the words "(insurance mediation)" will be inserted after this controlled function (see MIPRU 2.2.5 G ).
  • 01/11/2007

EEA investment business oversight function (CF9)

Compliance oversight function (CF10)

SUP 10.7.8

handbook-rule
The compliance oversight function is the function of acting in the capacity of a director or senior manager who is allocated the function set out in SYSC 3.2.8 R or SYSC 6.1.4 R (2).
  • 01/11/2007

Money laundering reporting function (CF11)

SUP 10.7.13

handbook-rule
The money laundering reporting function is the function of acting in the capacity of the money laundering reporting officer of a firm.
  • 21/06/2001

SUP 10.7.13A

handbook-guidance
A firm's obligations in respect of its money laundering reporting officer are set out elsewhere in the Handbook (see SYSC 3.2.6I R and SYSC 6.3.9 R and for their scope, see the application provisions in SYSC 1 Annex 1).
  • 01/04/2009

Actuarial function (CF12) and with-profits actuary function (CF12A)

SUP 10.7.17

handbook-rule
The actuarial function is the function of acting in the capacity of an actuary appointed by a firm under SUP 4.3.1 R to perform the duties set out in SUP 4.3.13 R.
  • 31/12/2004

SUP 10.7.17A

handbook-rule
The with-profits actuary function is the function of acting in capacity of an actuary appointed by a firm under SUP 4.3.1 R to perform the duties set out in SUP 4.3.16A R.
  • 31/12/2004

Lloyd's actuary function (CF12B)

SUP 10.7.22

handbook-rule
The Lloyd's actuary function is the function of acting in the capacity of the actuary appointed under SUP 4.6.1 R to perform the duties set out in SUP 4.6.7 R.
  • 01/11/2007

SUP 10.8

Systems and control functions

  • 01/12/2004

Systems and controls function (CF28)

SUP 10.8.1

handbook-rule
The systems and controls function is the function of acting in the capacity of an employee of the firm with responsibility for reporting to the governing body of a firm, or the audit committee (or its equivalent) in relation to:
(1) its financial affairs;
(2) setting and controlling its risk exposure (see SYSC 3.2.10 G and SYSC 7.1.6 R);
(3) adherence to internal systems and controls, procedures and policies (see SYSC 3.2.16 G and SYSC 6.2).
  • 01/11/2007

SUP 10.8.2A

handbook-guidance
Where an employee performs the systems and controls function the FSA would expect the firm to ensure that the employee had sufficient expertise and authority to perform that function effectively. A director or senior manager would meet this expectation.
  • 01/11/2007

SUP 10.9

Significant management functions

  • 01/12/2004

Application

SUP 10.9.1

handbook-rule
SUP 10.9 applies only to a firm which:
(1) under SYSC 2.1.1 R or SYSC 4.1.1 R, apportions a significant responsibility, within the description of the significant management function, to a senior manager of a significant business unit; or
(2) undertakes proprietary trading.
  • 20/01/2011

SUP 10.9.2

handbook-guidance
The FSA anticipates that there will be only a few firms needing to seek approval for an individual to perform the significant management function set out in SUP 10.9.1 R (1). In most firms, those approved for the governing functions, required functions and, where appropriate, the systems and controls function, are likely to exercise all the significant influence at senior management level.
  • 06/08/2009

SUP 10.9.2A

handbook-guidance
A proprietary trader undertakes activities with the firm'smoney and has the ability to commit the firm. By virtue of this role, all proprietary traders have potential to be able to exercise significant influence on the firm for the purposes of section 59(4) and (5) of the Act. It is therefore the FSA's expectation that all firms will assess all their proprietary traders to ascertain the ones for whom approval is required.
  • 06/08/2009

SUP 10.9.3

handbook-guidance
The scale, nature and complexity of the firm's business may be such that a firm apportions under SUP 10.9.1 R (1) a significant responsibility to an individual who is not approved to perform the governing functions, required functions or, where appropriate, the systems and controls function. If so,v the firm should consider whether the functions of that individual fall within the significant management function. For the purposes of the description of the significant management functions, the following additional factors about the firm should be considered:
(1) the size and significance of the firm's business in the United Kingdom; for example, a firm carrying on designated investment business may have a large number of approved persons (for example, in excess of 100 individuals); or a firm carrying on general insurance business may have gross written premiums in excess of £100mn;
(2) the number of regulated activities carried on, or proposed to be carried on, by the firm and (if relevant) other members of the group;
(3) its group structure (if it is a member of a group);
(4) its management structure (for example matrix management); and
(5) the size and significance of its international operations, if any.
  • 06/08/2009

SUP 10.9.4

handbook-guidance
When considering whether a business unit is significant, the firm should take into account all relevant factors in the light of the firm's current circumstances and its plans for the future, including:
(1) the risk profile of the unit; or
(2) its use or commitment of a firm's capital; or
(3) its contribution to the profit and loss account; or
(4) the number of employees or approved persons in the unit; or
(5) the number of customers of the unit; or
(6) any other factor which makes the unit significant to the conduct of the firm's affairs so far as relating to the regulated activity.
  • 21/06/2001

SUP 10.9.5

handbook-guidance
The question may arise whether a manager who is based overseas will be performing the significant management function under SUP 10.9.10 R (1) and should therefore be an approved person. This is especially true where the firm operates matrix management. The fact there is a person performing the apportionment and oversight function, and who has responsibility for activities subject to regulation by the FSA, may have a bearing on this. It is a factor to take into account when assessing the likely influence of the overseas manager.
  • 06/08/2009

SUP 10.9.6

handbook-guidance
Generally, in relation to a branch of a firm, or a firm which is part of an overseas group, where an overseas manager is responsible for strategy, he will not need to be an approved person under SUP 10.9.10 R. However, where he is responsible for implementing that strategy in the United Kingdom, and has not delegated that responsibility to a senior manager in the United Kingdom, he is likely to be performing that controlled function.
  • 06/08/2009

SUP 10.9.7

handbook-guidance
See also SUP 10.7.3 G to SUP 10.7.4B G in relation to matrix management.
  • 01/11/2007

Significant management function (CF29)

SUP 10.9.10

handbook-rule
(1) The significant management function is the function of acting as a senior manager with significant responsibility for a significant business unit that:
(a) carries on designated investment business or other activities not falling within (b) to (d);
(b) effects contracts of insurance (other than contractually based investments);
(c) makes material decisions on the commitment of a firm's financial resources, its financial commitments, its assets acquisitions, its liability management and its overall cash and capital planning;
(d) processes confirmations, payments, settlements, insurance claims, client money and similar matters.
(1A) The significant management function also includes the function of acting as a proprietary trader.
(2) This controlled function does not include any of the activities described in any other controlled function.
  • 06/08/2009

SUP 10.9.10A

handbook-guidance
A senior managercarrying on the significant management function under SUP 10.9.10 R (1)with significant responsibility for a significant business unit that carries on activities other than designated investment business for the purposes of SUP 10.9.10 R (1)(a) could, for example, be the head of a unit carrying on the activities of: retail banking, personal lending, corporate lending, salvage or loan recovery, or proprietary trading, or a member of a committee (that is, a person who, together with others, has authority to commit the firm) making decisions in these functions.
  • 06/08/2009

SUP 10.9.10B

handbook-guidance
A proprietary trader also undertakes activities which may have a significant influence on the firm. Such activities may require approval for CF29 under SUP 10.9.10 R (1A).
  • 06/08/2009

SUP 10.9.13A

handbook-guidance
A firm carrying on insurance mediation activity, other than a sole trader, must allocate to a director or senior manager the responsibility for the firm's insurance mediation activity (MIPRU 2.2.1 R). MIPRU 2.2.2 R (3)) provides that the firm may allocate this responsibility to the person performing the significant management function.
  • 06/01/2008

SUP 10.9.13B

handbook-guidance
Where the person performing the significant management function is also responsible for the firm's insurance mediation activity, the words "(insurance mediation)" will be inserted after this controlled function (see MIPRU 2.2.5 G ).
  • 01/11/2007

SUP 10.10

Customer functions

  • 01/12/2004

SUP 10.10.1

handbook-rule
SUP 10.10 ( Customer function) applies with respect to activities carried on from an establishment maintained by the firm (or by its appointed representative) in the United Kingdom.
  • 01/11/2007

SUP 10.10.2

handbook-guidance
Without SUP 10.10.1 R the description of the customer function would extend to this function wherever it was performed. The effect of SUP 10.10.1 R is that the description islimited, in relation to regulated activities with an overseas element, in a manner which is broadly consistent with the scope of conduct of business regulation.
  • 01/11/2007

SUP 10.10.3

handbook-guidance
The customer functions has to do with giving advice on, dealing and arranging deals in and managing investments; it has no application to banking business such as deposit taking and lending, nor to general insurance business.
  • 01/11/2007

The customer conditions (the second and third conditions)

SUP 10.10.4

handbook-rule
The customer function is one which will involve the person performing it in dealing with clients , or dealing with property of clients , of a firm in a manner substantially connected with the carrying on of a regulated activity of the firm.
  • 01/11/2007

SUP 10.10.5

handbook-guidance
SUP 10.10.4 R gives effect to sub-sections (6) and (7) of section 59 of the Act (referred to in that section as the second and third conditions).
  • 01/11/2007

SUP 10.10.6

handbook-guidance
The FSA interprets the phrase "dealing with" as including having contact with customers and extending beyond "dealing" as used in the phrase "dealing in investments". "Dealing in" is used in Schedule 2 to the Act to describe in general terms the regulated activities which are specified in Part II of the Regulated Activities Order.
  • 21/06/2001

Customer function (CF 30)

SUP 10.10.7A

handbook-rule
The customer function is the function of:
(1) advising on investments other than a non-investment insurance contract (but not where this is advising on investments in the course of carrying on the activity of giving basic advice on a stakeholder product) and performing other functions related to this such as dealing and arranging;
(2) giving advice to clients solely in connection with corporate finance business and performing other functions related to this;
(3) giving advice or performing related activities in connection with pension transfers or opt-outs for retail clients;
(4) giving advice to a person to become, or continue or cease to be, a member of a particular Lloyd's syndicate;
(5) dealing, as principal or as agent, and arranging (bringing about) deals in investments other than a non-investment insurance contract with or for, or in connection with customers where the dealing or arranging deals is governed by COBS 11 (Dealing and managing);
(6) acting in the capacity of an investment manager and carrying on functions connected to this.
  • 01/11/2007

SUP 10.10.7B

handbook-rule
The customer function does not extend to an individual who is performing the functions in SUP 10.10.7A R (1) to (2) or SUP 10.10.7A R (5) to (6) and who is based overseas and who, in a 12 month period, spends no more than 30 days in the United Kingdom to the extent that he is appropriately supervised by a person approved for this function.
  • 01/11/2007

SUP 10.10.7C

handbook-guidance
The FSA would expect an individual from overseas to be accompanied on a visit to a customer. TC 2.1.9 R (2) provides that the firm will have to be satisfied that the individual has at least three years' up-to-date relevant experience obtained outside the United Kingdom. However, the remaining provisions of TC 2.1.9 R (2) are disapplied in these circumstances (except for an individual who gives advice to retail clients on packaged products or is a broker fund adviser). The effect of this is that such individuals need not attain the relevant regulatory module of an appropriate qualification (see TC 2.1.9 R (2)).
  • 01/01/2011

SUP 10.10.7D

handbook-guidance
The customer function in SUP 10.10.7A R (5) does not extend to the individual who, on the instructions of the customer, simply inputs the customer's instructions into an automatic execution system where no discretion is or may be exercised by the individual performing the activity. Nor does it extend to merely introducing a customer to a firm or distributing advertisements.
  • 01/11/2007

SUP 10.10.7E

handbook-guidance
An individual may advise on investments prior to being assessed as competent in accordance with the rules in the Senior Management Arrangements, Systems and Controls sourcebook (SYSC) and, where relevant, the Training and Competence sourcebook (TC). The firm shall record when that person subsequently becomes competent.
  • 01/11/2007

SUP 10.11

Procedures relating to approved persons

  • 01/12/2004

Forms

SUP 10.11.1

handbook-guidance
The forms listed in SUP 10.11.2 G are referred to in SUP 10.11 (Procedures relating to approved persons) to SUP 10.14 (Further questions).
  • 21/06/2001

SUP 10.11.2

handbook-guidance

Approved persons forms

  • 04/10/2010

SUP 10.11.3

handbook-guidance
A summary of the forms and their purposes is in SUP 10 Annex 2 G.
  • 04/10/2010

SUP 10.11.4

handbook-guidance
Unless the context otherwise requires, in SUP 10.11 (Procedures relating to approved persons) to SUP 10.14 (Further questions) where reference is made to a firm, this also includes an applicant for Part IV permission, and other persons seeking to carry on regulated activities as an authorised person.
  • 21/06/2001

SUP 10.11.5

handbook-guidance
Forms B, C, D and E can only be submitted in respect of an approved person by the firm that submitted an approved person's original application (that is, the relevant Form A).
  • 01/11/2007

SUP 10.11.6

handbook-guidance
Copies of Forms A, B, C, D and E may be obtained from the FSA website.Credit unions can obtain copies from the Individuals, Mutuals and Policy Departmentby email at iva@fsa.gov.uk or from the FSA's Firm Contact Centre. To contact the Individuals, Mutuals and Policy Department for general enquiries:
(1) telephone 020 7066 0019; or
(2) fax 020 7066 0017; or
(3) write to:
Individuals, Mutuals and Policy Department
The Financial Services Authority
25 The North Colonnade
Canary Wharf
LONDON E14 5HS; or
(4) e-mail iva@fsa.gov.uk
  • 04/10/2010

SUP 10.12

Application for approval and withdrawing an application for approval

  • 01/12/2004

When to apply for approval

SUP 10.12.1

handbook-guidance
In accordance with section 59 of the Act (Approval for particular arrangements), where a candidate will be performing one or more controlled functions, a firm must take reasonable care to ensure that the candidate does not perform these functions unless he has prior approval from the FSA.
  • 21/06/2001

How to apply for approval

SUP 10.12.2

handbook-directions
An application by a firm for the FSA's approval under section 59 of the Act (Approval for particular arrangements) must be made by completing Form A.
(1) An application by a firm other than a credit union must be made by submitting Form A online at www.fsa.gov.uk using the form specified on the FSA's ONA system.
(2) An application by a credit union must be made using the form in SUP 10 Annex 4D and must be submitted in the way set out in SUP 15.7.4 R to SUP 15.7.9 G (Form and method of notification).
(3) Where a firm is obliged to submit an application online under (1), if the FSA's information technology systems fail and online submission is unavailable for 24 hours or more, until such time as facilities for online submission are restored a firm must use the form in SUP 10 Annex 4 D and submit it in the way set out in SUP 15.7.4 R to SUP 15.7.9 G (Form and method of notification).

[Note: See SUP 10.13.5G for the circumstances in which a shortened Form A may be used.]
  • 04/10/2010

SUP 10.12.2A

handbook-guidance
(1) If the FSA's information technology systems fail and online submission is unavailable for 24 hours or more, the FSA will endeavour to publish a notice on its website confirming that online submission is unavailable and that the alternative methods of submission set out in SUP 10.12.2D (3) and SUP 15.7.4 R to SUP 15.7.9 G (Form and method of notification) should be used.
(2) Where SUP 10.12.2D (3)) applies to a firm, GEN 1.3.2 R (Emergency) does not apply.
  • 04/10/2010

Who should make the application?

SUP 10.12.3

handbook-guidance
(1) In accordance with section 60 of the Act (Applications for approval), applications must be submitted by, or on behalf of, the firm itself, not by:
(a) the candidate; or
(b) (where the candidate works for the firm'sparent undertaking or holding company) by the firm'sparent undertaking or holding company
(2) Usually this will be the firm that is employing the candidate to perform the controlled function. Where a firm has outsourced the performance of a controlled function, the details of the outsourcing determine where responsibility lies and whom the FSA anticipates will submit approved persons application forms. SUP 10.12.4 G describes some common situations. The firm which is outsourcing is referred to as "A" and the person to whom the performance of the controlled function has been outsourced, or which makes the arrangement for the controlled function to be performed, is referred to as "B". In each situation, A must take reasonable care to ensure that, in accordance with section 59(2) of the Act, no person performs a controlled function under an arrangement entered into by its contractor in relation to the carrying on by A of a regulated activity, without approval from the FSA. See also SYSC 3.2.4 G and SYSC 8.1.1 R, and for insurersSYSC 13.9.
  • 06/10/2009

SUP 10.12.4

handbook-guidance

Outsourcing arrangements

  • 01/01/2007

SUP 10.12.4A

handbook-guidance
Where the notification of an appointed representative (SUP 12.7.1 R) is linked to an application for approval (SUP 10.12 (Applications for approval and withdrawing an application for approval)), any delay in receiving the notification under SUP 12.7.1 R may delay the FSA's approval of the individuals employed by that appointed representative who will be performing controlled functions for the firm.
  • 01/12/2002

Processing an application

SUP 10.12.5

handbook-guidance
The Act allows the FSA three months from the time it receives a properly completed application to consider it and come to a decision. The FSA must either grant the application or, if it proposes not to grant an application, issue a warning notice (see DEPP 2 ). The FSA will deal with cases more quickly than this whenever circumstances allow and will try to meet the standard response times published on the website and in its Annual Report. However, if an application is incomplete when received, or the FSA has knowledge that, or reason to believe that, the information is incomplete, then the processing time will be longer than the published standard response times.
  • 28/08/2008

SUP 10.12.6

handbook-guidance
Application forms must always be completed fully and honestly. Further notes on how to complete the form are contained in each form. If forms are not completed fully and honestly, applications will be subject to investigation and the candidate's suitability to be approved to undertake a controlled function will be called into question.A person who provides information to the FSA that is false or misleading may commit a criminal offence, and could face prosecution under section 398 of the Act regardless of the status of their application.
  • 06/12/2009

SUP 10.12.7

handbook-guidance
If there is a delay in processing the application within the standard response time, the FSA will tell the firm making the application as soon as this becomes apparent.
  • 21/06/2001

SUP 10.12.8

handbook-guidance
Before making a decision to grant the application or give a warning notice, the FSA may ask the firm for more information about the candidate. If it does this, the three month period in which the FSA must determine a completed application:
(1) will stop on the day the FSA requests the information; and
(2) will start running again on the day on which the FSA finally receives all the requested information.
  • 21/06/2001

SUP 10.12.9

handbook-guidance
The FSA may grant an application only if it is satisfied that the candidate is a fit and proper person to perform the controlled function stated in the application form. Responsibility lies with the firm making the application to satisfy the FSA that the candidate is fit and proper to perform the controlled function applied for.
  • 21/06/2001

SUP 10.12.10

handbook-guidance
For further guidance on criteria for assessing whether a candidate is fit and proper, see FIT.
  • 21/06/2001

Decisions on applications

SUP 10.12.11

handbook-guidance
Whenever it grants an application, the FSA will confirm this in writing to all interested parties.
  • 21/06/2001

SUP 10.12.12

handbook-guidance
If the FSA proposes to refuse an application in relation to one or more controlled functions, it must follow the procedures for issuing warning and decision notices to all interested parties. The requirements relating to warning and decision notices are in DEPP 2.
  • 28/08/2007

Withdrawing an application for approval

SUP 10.12.13

handbook-rule
A firm applying to withdraw an application for approvalmust notify the FSA, using Form B, in the form set out in SUP 10 Annex 5 R.
  • 04/10/2010

SUP 10.12.14

handbook-guidance
Under section 61(5) of the Act (Determination of applications), the firm may withdraw an application only if it also has the consent of the candidate and the person by whom the candidate is or would have been employed, if this is not the firm making the application.
  • 21/06/2001

SUP 10.13

Changes to an approved person's details

  • 01/12/2004

Moving within a firm

SUP 10.13.1

handbook-guidance
An approved person's job may change from time to time as a result, for instance, of a change in personal job responsibilities or a firm's regulated activities. Where the changes will involve the person performing one or more different controlled functions from those for which approval has already been granted, then an application must be made to the FSA for approval for the person to perform those controlled functions. The firm must take reasonable care to ensure that an individual does not begin performing a controlled function until the FSA has granted approved person status to that individual in respect of that controlled function. This applies to individuals seeking approval in respect of a controlled function within the firm for which they already perform controlled functions. If the approved person is ceasing to perform controlled functions, as well as applying for approval in respect of additional controlled functions, then refer to SUP 10.13.3 D.
  • 21/06/2001

SUP 10.13.2

handbook-guidance
SUP 10.12.2 D applies where an individual is to perform further controlled functions for a firm for which he already performs a controlled function as an approved person (see SUP 10.12.2 D). It is not mandatory to complete all parts of the form. See the notes relevantto eachform for full details.
  • 04/10/2010

SUP 10.13.3

handbook-directions
A firm must use Form E where an approved person is both ceasing to perform one or more controlled functions and needs to be approved in relation to one or more new controlled functions within the same firm or group.
(1) A firm other than a credit union must submit Form E online at www.fsa.gov.uk using the form specified on the FSA's ONA system.
(2) A credit union must submit Form E using the form in SUP 10 Annex 8 G and in the way set out in SUP 15.7.4 R to SUP 15.7.9 G (Form and method of notification).
(3) Where a firm is obliged to submit an application online under (1), if the FSA's information technology systems fail and online submission is unavailable for 24 hours or more, until such time as facilities for online submission are restored, a firm must submit Form E using the form in SUP 10 Annex 8 G and in the way set out in SUP 15.7.4 R to SUP 15.7.9 G (Form and method of notification).

[Note: See SUP 10.13.21 G to SUP 10.13.22 G regarding notification in the event of online failure.]
  • 04/10/2010

Moving between firms

SUP 10.13.4

handbook-guidance
If it is proposed that an approved person will no longer be performing a controlled function under an arrangement entered into by one firm or one of its contractors, but will be performing the same or a different controlled function under an arrangement entered into by a new firm or one of its contractors (whether or not the new firm is in the same group as the old firm), the new firm will be required to make a fresh application for the performance of the controlled function by that person.
  • 21/06/2001

SUP 10.13.5

handbook-guidance
In certain circumstances, when the FSA already has the information it would usually require, a shortened version of the relevant Form A may be completed. See the notes relevant to each form for full details; see also SUP 10.12.2 D for the method of submission of this form.
  • 04/10/2010

Ceasing to perform a controlled function

SUP 10.13.6

handbook-rule
A firm must submit to the FSA a completed Form C, in the form set out in SUP 10 Annex 6R, no later than seven business days after an approved person ceases to perform a controlled function.
(1) A firm other than a credit union must submit Form C online at www.fsa.gov.uk using the FSA's ONA system.
(2) A credit union must submit Form C in the way set out in SUP 15.7.4 R to SUP 15.7.9 G (Form and method of notification).
(3) Where a firm is obliged to submit an application online under (1), if the FSA's information technology systems fail and online submission is unavailable for 24 hours or more, until such time as facilities for online submission are restored, a firm must submit Form C in the way set out in SUP 15.7.4 R to SUP 15.7.9 G (Form and method of notification).

[Note: See SUP 10.13.21 G to SUP 10.13.22 G regarding notification in the event of online failure.]
  • 04/10/2010

SUP 10.13.7

handbook-rule
(1) A firm must notify the FSA as soon as practicable after it becomes aware, or has information which reasonably suggests, that it will submit a qualified Form C in respect of an approved person.
(2) Form C is qualified if the information it contains:
(a) relates to the fact that the firm has dismissed, or suspended, the approved person from its employment; or
(b) relates to the resignation by the approved person while under investigation by the firm, the FSA or any other regulatory body; or
(c) otherwise reasonably suggests that it may affect the FSA's assessment of the approved person's fitness and propriety.
  • 01/12/2002

SUP 10.13.8

handbook-guidance
Notification under SUP 10.13.7 R may be made by telephone, fax or email and should be made, where possible, within one business day of the firm becoming aware of the information. If the firm does not submit Form C, it should inform the FSA in due course of the reason. This could be done using Form D, if appropriate.
  • 21/06/2001

SUP 10.13.9

handbook-guidance
A firm is responsible for notifying the FSA if any approved person has ceased to perform a controlled function under an arrangement entered into by its appointed representative or former appointed representative
  • 21/06/2001

SUP 10.13.10

handbook-guidance
A firm can submit Form C or Form E to the FSA in advance of the cessation date. When a person ceases the arrangement under which he performs a controlled function, he will automatically cease to be an approved person in relation to that controlled function. A person can only be an approved person in relation to a specific controlled function. Therefore, a person is not an approved person during any period between ceasing to perform one controlled function (when he is performing no other controlled function) and being approved in respect of another controlled function.
  • 21/06/2001

SUP 10.13.11

handbook-guidance
Sending forms promptly will help to ensure that any fresh application can be processed within the standard response times.
  • 21/06/2001

SUP 10.13.12

handbook-rule
(1) If a firm (A):
(a) is considering appointing a person to perform any of the controlled functions ;
(b) requests another firm (B), as a current orformer employer of that person, for a reference or other information in connection with that appointment; and
(c) indicates to B the purpose of the request;
B must, as soon as reasonably practicable, give to A all relevant information of which it is aware.
(2) When giving the information to A under (1), B must have regard to the purpose of the request and in particular to:
(a) any outstanding liabilities of that person from commission payments;
(b) any relevant outstanding or upheld complaint from an eligible complainant against that person;
(c) section 5 of the relevant Form A in SUP 10 Annex 4 (Application to perform controlled functions under approved persons regime);
(d) FIT 2 (Main assessment criteria); and
(e) if SUP 16.8.1 G (1) (Persistency reports from insurers) applies to B, the persistency of any life policies sold by that person.
  • 06/08/2009

SUP 10.13.12A

handbook-guidance
The requirement in SUP 10.13.12 R (1) for firm (B) to give to firm (A) all relevant information of which it is aware concerning a personfirm A is considering appointing to perform any of the controlled functions, also applies where firm A has outsourced the collection of that information to another (unregulated) third party, where firm B has been made aware that the unregulated third party is acting on behalf of firm A.
  • 06/08/2009

SUP 10.13.13

handbook-guidance
A firm supplying a reference in accordance with SUP 10.13.12 R owes a duty to its former employee and the recipient firm to exercise due skill and care in the preparation of the reference. The reference should be accurate and based on documented fact. The firm may give frank and honest views, but only after taking reasonable care both as to factual content, and as to the opinions expressed, and verifying the information upon which they are based.
  • 21/06/2001

Changes to an approved person's personal details

SUP 10.13.14

handbook-rule
If an approved person's title, name or national insurance number changes, the firm for which the person performs a controlled function must notify the FSA on Form D, in the form set out in SUP 10 Annex 7 R, of that change within seven business days of the firm becoming aware of the matter.
(1) A firm other than a credit union must submit Form D online at www.fsa.gov.uk using the FSA's ONA system.
(2) A credit union must submit Form D in the way set out in SUP 15.7.4 R to SUP 15.7.9 G (Form and method of notification).
(3) Where a firm is obliged to submit an application online under (1), if the FSA's information technology systems fail and online submission is unavailable for 24 hours or more, until such time as facilities for online submission are restored, a firm must submit Form D in the form set out in SUP 10 Annex 7 R and in the way set out in SUP 15.7.4 R to SUP 15.7.9 G (Form and method of notification).

[Note: See SUP 10.13.21 G to SUP 10.13.22 G regarding notification in the event of online failure.]
  • 04/10/2010

SUP 10.13.15

handbook-guidance
The duty to notify in SUP 10.13.14 R does not apply to changes to an approved person's private address.
  • 21/06/2001

SUP 10.13.16

handbook-rule
(1) If a firm becomes aware of information which would reasonably be material to the assessment of an approved person's, or a candidate's, fitness and propriety (see FIT), it must inform the FSA on Form D, or (if it is more practical to do so and with the prior agreement of the FSA) by fax or e-mail, as soon as practicable.
(2) SUP 10.13.14 R applies to the submission of Form D.
  • 04/10/2010

SUP 10.13.17

handbook-guidance
The duty to notify in SUP 10.13.16 R extends to any circumstances that would normally be declared when giving the information required for section 5 of Form A or matters considered in FIT 2.
  • 21/06/2001

SUP 10.13.18

handbook-rule
(1) If, in relation to a firm which has completed the relevant Form A (SUP 10 Annex 4 D), any of the details relating to arrangementsand controlled functions are to change, the firm must notify the FSA on Form D (SUP 10 Annex 7 R).
(2) The notification under (1) must be made as soon as reasonably practicable after the firm becomes aware of the proposed change.
(3) Paragraphs (1) and (2) also apply to a firm in respect of an approved person, to whom the grandfathering arrangements applied as if the firm had completed the relevant Form A for that person.
(4) SUP 10.13.14 R applies to the submission of Form D.
  • 04/10/2010

SUP 10.13.19

handbook-guidance
An example of where a firm should use Form D is when an individual who is appointed by one appointed representative becomes employed by another appointed representative but continues to perform the investment adviser function for the firm. The firm should notify the FSA by completing Section 1.07 of Form D.
  • 01/12/2002

SUP 10.13.20

handbook-guidance
The grandfathering arrangements applying to an approved person referred to in SUP 10.13.18 R are contained in Part VI (Approved persons) of the Financial Services and Markets Act (Transitional Provisions) (Authorised Persons etc.) Order 2001 (SI 2001/2636). Article 72 of that Order provides, in general terms, that, where a person was performing a function at the beginning of 1 December 2001 which became a controlled function under the Act, the continued performance of that function by that person was taken to be approved by the FSA. That person therefore became an approved person without the need for a Form A.
  • 01/12/2002

Submission in the event of failure of FSA information technology systems

SUP 10.13.21

handbook-guidance
If the FSA's information technology systems fail and online submission is unavailable for 24 hours or more, the FSA will endeavour to publish a notice on its website confirming that online submission is unavailable and that the alternative methods of submission set out in SUP 10.13.3D (3), SUP 10.13.6R (3) and SUP 10.13.14R (3) (as appropriate), and SUP 15.7.4 R to SUP 15.7.9 G (Form and method of notification) should be used.
  • 04/10/2010

SUP 10.13.22

handbook-guidance
Where SUP 10.13.3D (3), SUP 10.13.6R (3) or SUP 10.13.14R (3) applies to a firm, GEN 1.3.2 R (Emergency) does not apply.
  • 04/10/2010

SUP 10.14

Further questions

  • 01/12/2004

SUP 10.14.1

handbook-guidance
A list of frequently asked questions and answers is at SUP 10 Annex 1.
  • 21/06/2001

SUP 10.14.2

handbook-guidance
If the firm or its advisers have further questions, they should contact the FSA'sIndividuals, Mutuals and PolicyDepartment(see SUP 10.11.6 G).
  • 01/11/2007

SUP 10 Annex 1

Frequently asked questions

  • 01/12/2004

handbook-guidance
How does the customer function relate to the training and competence requirements?
  • 04/10/2010

SUP 10 Annex 2

Approved person regime: summary of forms and their use

  • 01/12/2004

Approved person regime: summary of forms and their use

handbook-guidance
  • 21/06/2001

SUP 10 Annex 4

Form A: Application to perform controlled functions under the approved person regime

  • 01/12/2004

handbook-directions
This annex consists only of one or more forms. Forms are to be found through the following address:

Supervision forms - Notes from direction in SUP 10.12
  • 06/05/2006

SUP 10 Annex 5

Form B: Notice to withdraw an application to perform controlled functions under the approved persons regime

  • 01/12/2004

handbook-rule
This annex consists only of one or more forms. Forms are to be found through the following address:

Supervision forms - SUP 10 Annex 5
  • 01/07/2004

SUP 10 Annex 6

Form C: Notice of ceasing to perform controlled functions

  • 01/12/2004

handbook-rule
This annex consists of only one or more forms. Forms can be completed online now by visiting: http://www.fsa.gov.uk/Pages/doing/index.shtml

The forms are also to be found through the following address: Supervision forms - SUP 10 Annex 6
  • 04/10/2010

SUP 10 Annex 7

Form D: Notification of changes in personal information or application details

  • 01/12/2004

handbook-rule
This annex consists of only one or more forms. Forms can be completed online now by visiting: http://www.fsa.gov.uk/Pages/doing/index.shtml

The forms are also to be found through the following address: Supervision forms - SUP 10 Annex 7
  • 04/10/2010

SUP 10 Annex 8

Form E: Internal transfer of an approved person

  • 01/12/2004

handbook-guidance
This annex consists only of one or more forms. Forms are to be found through the following address:

Supervision forms - SUP 10 Annex 8
  • 01/12/2002