SUP 4

Actuaries

SUP 4.1

31/12/2004

Application

SUP 4.1.1

01/04/2013

  • R
This chapter applies to:
(1) every firm within a category listed in column (1) of the table in SUP 4.1.3 R; and
(2) every actuary appointed under this chapter;
in accordance with column (2) of that table.

SUP 4.1.2

01/04/2013

  • G
This chapter applies to long-term insurers (including friendly societies) and other friendly societies and to the Society of Lloyd's and managing agents at Lloyd's. This chapter does not apply to actuaries advising the auditors of long-term insurers under IPRU(INS) 9.35(1A) or IPRU(FSOC) 5.11(2A), as they are not appointed to act on behalf of the firm.

SUP 4.1.3

01/04/2013

  • R

Applicable sections

(1) Category of firm (2) Applicable sections
(1) A long-term insurer, other than: SUP 4.1, SUP 4.2, SUP 4.3 and SUP 4.5
(a) a registered friendly society which is a non-directive friendly society;
(b) an incorporated friendly society that is a flat rate benefits business friendly society; and
(c) an incoming EEA firm
(2) A friendly society, other than a friendly society within (1). SUP 4.1, SUP 4.2, SUP 4.4 and SUP 4.5
(3) A Lloyd's managing agent, in respect of each syndicate it manages SUP 4.1, SUP 4.2, SUP 4.5, SUP 4.6
(4) The Society of Lloyd's SUP 4.1, SUP 4.2, SUP 4.5, SUP 4.6

SUP 4.2

31/12/2004

Purpose

SUP 4.2.1

01/04/2013

  • G
Section 340 of the Act gives the PRA power to make rules requiring an authorised person, or an authorised person falling into a specified class, to appoint an actuary . Section 340 further empowers the PRA to make rules governing the manner, timing and notification of such an appointment and, where an appointment is not made, for the PRA to make an appointment on the firm's behalf. The rule-making powers of the PRA and FCAunder section 340 of the Act also extend to an actuary's duties.

SUP 4.2.2

01/04/2013

  • G
This chapter defines the relationship between firms and their actuaries and clarifies the role which actuaries play in the appropriate regulator's monitoring of firms' compliance with the requirements and standards under the regulatory system. The chapter sets out rules and guidance on the appointment of actuaries , and the termination of their term of office, as well as setting out their respective rights and duties. The purpose of the chapter is to ensure that:
(1)  long-term insurers (other than certain friendly societies) have access to adequate actuarial advice, both in valuing their liabilities to policyholders and in exercising discretion affecting the interests of their with-profits policyholders; and
(2) other friendly societies carrying on insurance business (and which have traditionally relied upon actuarial expertise) employ or use an actuary of appropriate seniority and experience to evaluate the liabilities of that business; and
(3)  managing agents of Lloyd's syndicates employ or use an actuary of appropriate seniority and experience to evaluate the liabilities associated with insurance business carried on at Lloyd's.

SUP 4.2.3

01/04/2013

  • G
The functions described by SUP 4.2.2 G (1) are performed by one or more actuaries who are required to hold office continuously and must be approved persons . The principal duty of an actuary appointed to perform these functions is to advise the firm (see SUP 4.3.13 R to SUP 4.3.18 G for the rights and duties of such an actuary).

SUP 4.2.4

01/04/2013

  • G
The function described by SUP 4.2.2 G (2) is performed by an appropriate actuary who is appointed to prepare the triennial investigation and interim certificate or statement required by IPRU(FSOC) 5.2(1) (see SUP 4.4.6 R and SUP 4.5.12 G to SUP 4.5.14 G for the rights and duties of an appropriate actuary).

SUP 4.2.5

01/04/2013

  • G
Actuaries act as a valuable source of information to the appropriate regulator in carrying out its functions. For example, in determining whether a firm satisfies the threshold conditions, the appropriate regulator has regard to whether the firm has appointed an actuary with sufficient experience in the areas of business to be conducted by the firm.

SUP 4.2.6

01/04/2013

  • G
In making appointments under this chapter and in allocating duties to actuaries, firms are reminded of their obligation under SYSC 2.1.1 R to maintain a clear and appropriate apportionment of significant responsibilities so that it is clear who has which of those responsibilities and that the business and affairs of the firm can be adequately monitored and controlled by the directors, relevant senior managers and governing body of the firm.

SUP 4.3

31/12/2004

Appointment of actuaries

Appointment by firms

SUP 4.3.1

01/04/2013

  • R
A firm to which this section applies (see SUP 4.1) must:
(1) appoint one or more actuaries to perform:
(a) the actuarial function (see SUP 4.3.13 R) in respect of all classes of its long-term insurance business; and
(b) the with-profits actuary function (see SUP 4.3.16A R) in respect of all classes of its with-profits business (if any);
(2) notify the PRA , without delay, when it is aware that a vacancy in the office of any such actuary will arise or has arisen, giving the reason for the vacancy;
(3) appoint an actuary to fill any such vacancy that has arisen; and
(4) ensure a replacement actuary can take up office at the time the vacancy arises or as soon as is reasonably practicable after that.

SUP 4.3.2

01/04/2013

  • G
The provisions relating to the duties of an actuary appointed to perform these functions are set out in SUP 4.3.13 R to SUP 4.3.18 G. The functions performed by actuaries appointed by a firm under SUP 4.3.1 R are specified as controlled functions (CF 12, the actuarial function, and CF 12A, the with-profits actuary function) in SUP 10B ( PRA- Approved persons). As a result, an application must be made to the PRA under section 60 of the Act (Applications for approval) for approval by the PRA with the consent of the FCA of the person proposing to take up such an appointment. Section 61(3) of the Act (Determination of applications) gives the PRA three months to grant its approval or give a warning notice that it proposes to refuse the application. A firm should not appoint an actuary until the PRA with the consent of the FCA has approved the actuary. In order to comply with SUP 4.3.1 R, a firm should ensure it applies to the PRA as soon as practicable before the date when it needs the actuary to take office. The PRA will need time to consider the application before deciding whether to grant approval. See SUP 10B ( PRA- Approved persons).

Appointment by the PRA

SUP 4.3.3

01/04/2013

  • R
If a firm, which is required to appoint one or more actuaries under SUP 4.3.1 R, fails to do so within 28 days of a vacancy arising, the PRA may appoint one or more actuaries to perform any function corresponding to the actuarial function or the with-profits actuary function on the following terms:
(1) the actuary to be remunerated by the firm on the basis agreed between the actuary and the firm or, in the absence of agreement, on a reasonable basis; and
(2) the actuary to hold office until he resigns or the firm appoints another actuary.

SUP 4.3.4

01/04/2013

  • G
SUP 4.3.3 R allows but does not require the PRA to appoint an actuary if the firm has failed to do so within the 28 day period. When it considers whether to use this power, the PRA will take into account the likely delay until the firm can make an appointment and the urgency of any pending duties of the actuary.

SUP 4.3.5

01/04/2013

  • G
The PRA will not normally seek to appoint an actuary under SUP 4.3.3 R if a notification under SUP 10B ( PRA- Approved persons) has been received from the firm in relation to a proposed appointment of an actuary under SUP 4.3.1 R, and that application is still being considered.

SUP 4.3.6

01/04/2013

  • R
A firm must comply with and is bound by the terms on which an actuary has been appointed by the PRA under SUP 4.3.3 R.

SUP 4.3.7

01/04/2013

  • G
If the PRA appoints an actuary under SUP 4.3.3 R, he will not be an approved person (not being appointed under SUP 4.3.1 R). However, the firm is still under an obligation to appoint an actuary under SUP 4.3.1 R and will need to seek prior approval of that person (even if the individual it proposes to appoint is the person who has been appointed by the PRA under SUP 4.3.3 R).

Actuaries' qualifications

SUP 4.3.8

01/04/2013

  • G
The appropriate regulator is concerned to ensure that every actuary appointed by a firm under this section has the necessary skill and experience to provide the firm with appropriate actuarial advice. SUP 4.3.9 R to SUP 4.3.10 G set out the appropriate regulator's rules and guidance aimed at achieving this.

SUP 4.3.9

01/04/2013

  • R
Before a firm applies for approval of the person it proposes to appoint as an actuary under SUP 4.3.1 R, it must take reasonable steps to ensure that the actuary:
(1) has the required skill and experience to perform his functions under the regulatory system; and
(2) is a Fellow of the Institute of Actuaries or of the Faculty of Actuaries.

SUP 4.3.10

01/04/2013

  • G
To comply with SUP 4.3.9 R and Principle 3, before an actuary takes up his appointment the firm should ensure that the actuary:
(1) has skills and experience appropriate to the nature, scale and complexity of the firm's business and the requirements and standards under the regulatory system to which it is subject; and
(2) has adequate qualifications and experience, which includes holding an appropriate practising certificate under the rules of the Institute of Actuaries or the Faculty of Actuaries;
and seek confirmation of these from the actuary, or the actuary's current and previous employers, as appropriate.

Disqualified actuaries

SUP 4.3.11

01/04/2013

  • R
A firm must not appoint under SUP 4.3.1 R an actuary who is disqualified by the FCA under section 345 of the Act (Disciplinary measures: FCA) or the PRA under section 345A of the Act (Disciplinary measures: PRA) from acting as an actuary either for that firm or for a relevant class of firm.

SUP 4.3.12

01/04/2013

  • G
If it appears to the FCA or PRA that an actuary has failed to comply with a duty imposed on him under the Act, it have the power to and may disqualify him under section 345 or 345A respectively of the Act. A list of actuaries who are disqualified may be found on the FCA website ( http://www.fca.org.uk ).

SUP 4.3.12A

01/04/2013

  • R
A firm must take reasonable steps to ensure that an actuary who is to be, or has been, appointed under SUP 4.3.1 R:
(1) does not perform the function of chairman or chief executive of the firm, or does not, if he is to perform the with-profits actuary function, become a member of the firm's governing body; and
(2) does not perform any other function on behalf of the firm which could give rise to a significant conflict of interest.

SUP 4.3.12B

01/04/2013

  • G
Both the actuarial function and the with-profits actuary function may be performed by employees of the firm or by external consultants, and performing other functions on behalf of the firm will not necessarily give rise to a significant conflict of interest. However, being a director, or a senior manager responsible, say, for sales or marketing in a firm (or for finance in a proprietary firm), is likely to give rise to a significant conflict of interest for an actuary performing the with-profits actuary function. He nevertheless retains direct access to the firm's governing body under SUP 4.3.17 R (2).

The actuarial function

SUP 4.3.13

01/04/2013

  • R
An actuary appointed to perform the actuarial function must, in respect of those classes of the firm's long-term insurance business which are covered by his appointment:
(1) advise the firm's management, at the level of seniority that is reasonably appropriate, on the risks the firm runs in so far as they may have a material impact on the firm's ability to meet liabilities to policyholders in respect of long-term insurance contracts as they fall due and on the capital needed to support the business, including regulatory capital requirements;
(2) monitor those risks and inform the firm's management, at the level of seniority that is reasonably appropriate, if he has any material concerns or good reason to believe that the firm:
(a) is not meeting liabilities to policyholders under long-term insurance contracts as they fall due, or may not be doing so, or might not have done so, or might, in reasonably foreseeable circumstances, not do so;
(b) is, or may be, effecting new long-term insurance contracts on terms under which the resulting income earned is insufficient, under reasonable actuarial methods and assumptions, and taking into account the other financial resources that are available for the purpose, to enable the firm to meet its liabilities to policyholders as they fall due (including reasonable bonus expectations);
(c) does not, or may not, have sufficient financial resources to meet liabilities to policyholders as they fall due (including reasonable bonus expectations) and the capital needed to support the business, including regulatory capital requirements or, if the firm currently has sufficient resources, might, in reasonably foreseeable circumstances, not continue to have them;
(3) advise the firm's governing body on the methods and assumptions to be used for the investigations required by IPRU(INS) 9.4R or IPRU(FSOC) 5.1R and the calculation of the with-profits insurance capital component under INSPRU 1.3 as applicable;
(4) perform those investigations and calculations in (3), in accordance with the methods and assumptions determined by the firm'sgoverning body;
(5) report to the firm's governing body on the results of those investigations and calculations in (3); and
(6) in the case of a friendly society to which this section applies, perform the functions of the appropriate actuary under section 87 (Actuary's report as to margin of solvency) of the Friendly Societies Act 1992.

SUP 4.3.14

01/04/2013

  • G
IPRU(INS) 9.4R and IPRU(FSOC) 5.1R require firms to which this section applies to cause an investigation to be made at least yearly by the actuary or actuaries appointed to perform the actuarial function, and to report on the result of that investigation. INSPRU 1.3 requires realistic basis life firms to calculate the with-profits insurance component as part of their capital resources requirements.The firm is responsible for the methods and assumptions used to determine the liabilities attributable to its long-term insurance business. The obligation on friendly societies to obtain a report from the 'appropriate actuary' under section 87 of the Friendly Societies Act 1992 applies to a friendly society which is to receive a transfer of engagements under section 86 (transfer of engagements to or by a friendly society). The 'appropriate actuary' in this context is the actuary appointed to perform the actuarial function, rather than the appropriate actuary under SUP 4.4 (Appropriate actuaries).

SUP 4.3.15

01/04/2013

  • G
SUP 4.3.13 R is not intended to be exhaustive of the professional advice that a firm should take whether from an actuary appointed under this chapter or from any other actuary acting for the firm. Firms should consider what systems and controls are needed to ensure that they obtain appropriate professional advice on financial and risk analysis; for example:
(1) risk identification, quantification and monitoring;
(2) stress and scenario testing;
(3) ongoing financial conditions;
(4) financial projections for business planning;
(5) investment strategy and asset-liability matching;
(6) individual capital assessment;
(7) pricing of business, including unit pricing;
(8) variation of any charges for benefits or expenses;
(9) discretionary surrender charges; and
(10) adequacy of reinsurance protection.

The with-profits actuary function

SUP 4.3.16

01/04/2013

  • R
An actuary appointed to perform the with-profits actuary functions must:
(1) advise the firm's management, at the level of seniority that is reasonably appropriate, on key aspects of the discretion to be exercised affecting those classes of the with-profits business of the firm in respect of which he has been appointed;
(2) where the firm is a realistic basis life firm advise the firm's governing body as to whether the assumptions used to calculate the with-profits insurance component under INSPRU 1.3 are consistent with the firm's PPFM in respect of those classes of the firm's with-profits business;
(3) at least once a year, report to the firm's governing body on key aspects (including those aspects of the firm's application of its Principles and Practices of Financial Management on which the advice described in (1) has been given) of the discretion exercised in respect of the period covered by his report affecting those classes of with-profits business of the firm;
(4) request from the firm such information and explanations as he reasonably considers necessary to enable him properly to perform the duties in (1) to (3);
(5) advise the firm as to the data and systems that he reasonably considers necessary to be kept and maintained to provide the duties in (4); and
(6) in the case of a friendly society to which this section applies, perform the function of appropriate actuary under section 12 (Reinsurance) of the Friendly Societies Act 1992 or section 23A (Reinsurance) of the Friendly Societies Act 1974 as applicable, in respect of those classes of its with-profits business covered by his appointment.

SUP 4.4

01/12/2004

Appropriate actuaries

Appointment of an appropriate actuary

SUP 4.4.1

01/04/2013

  • R
A firm to which this section applies (see SUP 4.1) and required by IPRU(FSOC) 5.2(1) to ensure that an investigation is carried out must:
(1) appoint an actuary (the "appropriate actuary") to carry out the triennial investigation and prepare an abstract of the report as required by IPRU(FSOC) 5.2(2) and provide the interim certificate or statement as required by IPRU(FSOC) 5.2(3); and
(2) appoint a replacement for that actuary if he ceases to hold office before he has carried out the duty described in (1).

Appropriate actuaries' qualifications

SUP 4.4.2

01/04/2013

  • R
Before a friendly society appoints an appropriate actuary, it must take reasonable steps to ensure that the actuary is a Fellow of the Institute of Actuaries or of the Faculty of Actuaries.

SUP 4.4.3

19/06/2014

  • G
An appropriate actuary should have skills and experience appropriate to the nature, scale and complexity of the firm's business and the requirements and standards under the regulatory system to which it is subject. A firm should have regard to whether its proposed appropriate actuary has adequate qualifications and experience, and seek confirmation of this from the actuary, or the actuary's current and previous employers, as appropriate.

SUP 4.4.4

01/04/2013

  • R
A firm must not appoint as appropriate actuary an actuary who has been disqualified by the FCA under section 345 of the Act (Disciplinary measures: FCA) or the PRA under section 345A of the Act (Disciplinary measures: PRA) from acting as an actuary either for that firm or for a relevant class of firm.

SUP 4.4.5

01/04/2013

  • G
If it appears to the FCA or PRA that an appropriate actuary has failed to comply with a duty imposed on him under the Act, it may have the power to and may disqualify him under section 345 or 345A respectivelyof the Act. A list of actuaries who have been disqualified may be found on the FCA website ( http://www.fca.org.uk ).

Specific duties of the appropriate actuary

SUP 4.4.6

01/04/2013

  • R
An appropriate actuary must carry out the triennial investigation and prepare an abstract of the report as required by IPRU(FSOC) 5.2(2) and provide the interim certificate or statement as required by IPRU(FSOC) 5.2(3).

SUP 4.5

31/12/2004

Provisions applicable to all actuaries

Objectivity

SUP 4.5.1

01/04/2013

  • R
An actuary appointed under this chapter must be objective in performing his duties.

SUP 4.5.2

01/04/2013

  • G
Objectivity requires the actuary to perform his duties in such a manner that he can have an honest belief in his work and does not compromise the quality of his work or his judgment. An actuary should not allow himself to be placed in situations where he feels unable to make objective professional judgments.

SUP 4.5.3

01/04/2013

  • R
An actuary appointed under this chapter must take reasonable steps to satisfy himself that he is free from bias, or from any conflict of interest from which bias may reasonably be inferred. He must take appropriate action where this is not the case.

SUP 4.5.4

01/04/2013

  • G
The appropriate action may include asking the firm's governing body to re-assign temporarily some or all of his duties to another competent actuary. Where this is insufficient, the actuary should resign his office.

SUP 4.5.5

01/04/2013

  • G
If the actuary is an employee of the firm, the ordinary incentives of employment, including profit-related pay, share options or other financial interests in the firm or any associate, give rise to a conflict of interest only where they are disproportionate, or exceptional, relative to those of other employees of equivalent seniority.

SUP 4.5.6

01/04/2013

  • G
The guidance and professional conduct standards in current issue from the Institute of Actuaries and the Faculty of Actuaries are relevant to compliance with SUP 4.5.1 R and SUP 4.5.3 R.

Actuaries' statutory duty to report

SUP 4.5.7

01/04/2013

  • G
(1)  Actuaries appointed under this chapter made by the Treasury under sections 342(5) and 343(5) of the Act (Information given by auditor or actuary to a regulator). Section 343 and the regulations also apply to an actuary of an authorised person in his capacity as an actuary of a person with close links with the authorised person.
(2) These regulations oblige actuaries to report certain matters to the appropriate regulator. Sections 342(3) and 343(3) of the Act provide that an actuary does not contravene any duty by giving information or expressing an opinion to the appropriate regulator, if he is acting in good faith and he reasonably believes that the information or opinion is relevant to any functions of the appropriate regulator. These provisions continue to have effect after the end of the actuary's term of appointment.

SUP 4.5.7A

19/06/2014

  • G
In relation to Lloyd's, an effect of the insurance market direction set out in Lloyd's (Auditors and Actuaries) 2 of the PRA Rulebook is that sections 342(5) and 343(5) of the Act (Information given by auditor or actuary to a regulator) apply also to actuaries who are appointed to evaluate the long-term insurance business of a syndicate.

Termination of term of office

SUP 4.5.8

01/04/2013

  • G
SUP 4.5.9 R to SUP 4.5.11 G apply to a person who is or has been an actuary appointed under this chapter.

SUP 4.5.9

01/04/2013

  • R
An actuary appointed under this chapter must notify the appropriate regulator without delay if he:
(1) is removed from office by a firm; or
(2) resigns before his term of office expires; or
(3) is not reappointed by a firm.

SUP 4.5.10

01/04/2013

  • R
An actuary who has ceased to be appointed under this chapter, or who has been formally notified that he will cease to be so appointed, must notify the appropriate regulator without delay:
(1) of any matter connected with the cessation which he thinks ought to be drawn to the appropriate regulator's attention; or
(2) that there is no such matter.

SUP 4.5.11

01/04/2013

  • G
When an actuary appointed under SUP 4.3.1 R ceases to hold office, he ceases to perform a controlled function. A firm is therefore required under SUP 10B.12.10 R to tell the PRA within seven business days of its actuary ceasing to hold office and to complete a withdrawal form (Form C, SUP 10A Annex 6 R). Note also the requirement of SUP 10B.12.12 R in relation to qualified withdrawals.

Rights and duties

SUP 4.5.12

01/04/2013

  • G
Section 341 of the Act (Access to books etc.) provides that an actuary appointed under or as a result of the Act:
(1) has a right of access at all times to the firm's books, accounts and vouchers; and
(2) is entitled to require from the firm's officers such information and explanation as he reasonably considers necessary to perform his duties as actuary.

SUP 4.5.13

01/04/2013

  • R
When carrying out his duties, an actuary appointed under this chapter must pay due regard to generally accepted actuarial practice.

SUP 4.5.14

01/04/2013

  • G
The standards and guidance issued from time to time by the Institute of Actuariesandthe Faculty of Actuaries are important sources of generally accepted actuarial practice.

SUP 4.6

01/01/2005

Lloyd's

Appointment of the Lloyd's actuary and syndicate actuaries

SUP 4.6.1

01/04/2013

  • R
The Society must:
(1) appoint an actuary to perform the Lloyd's actuary function ;
(2) notify the PRA, without delay, when it is aware that a vacancy in the office of Lloyd's actuary will arise or has arisen, giving the reason for the vacancy;
(3) appoint an actuary to fill any vacancy in the office of Lloyd's actuary that has arisen; and
(4) ensure that the replacement actuary can take up office at the time the vacancy arises or as soon as reasonably practicable after that.

SUP 4.6.2

01/04/2013

  • G
The functions performed by the actuary appointed as the Lloyd's actuary under SUP 4.6.1 R are specified as controlled functions in SUP 10B ( PRA- Approved persons ). As a result, an application must be made to the PRA under section 60 of the Act (Applications for approval) for approval of the person proposing to take up such an appointment. Section 61(3) of the Act (Determination of applications) gives the PRA three months to grant its approval or give a warning notice that it proposes to refuse the application. An actuary should not be appointed until the PRA with the consent of the FCA has approved the actuary. In order to comply with SUP 4.6.1 R, the Society should ensure it applies to the PRA as soon as practicable before the date when it needs the actuary to take office. The PRA will need time to consider the application before deciding whether to grant approval.

Qualifications

SUP 4.6.3

01/04/2013

  • R
Before the Society applies for approval of its proposed appointment of the Lloyd's actuary under SUP 4.6.1 R, it must take reasonable steps to ensure that the actuary:
(1) has the required skill and experience to perform his functions under the regulatory system; and
(2) is a Fellow of the Institute of Actuaries or of the Faculty of Actuaries.

SUP 4.6.4

01/04/2013

  • G
To comply with SUP 4.6.3 R and Principle 3, before the Lloyd's actuary takes up his appointment the Society should ensure that the actuary:
(1) has skills and experience appropriate to the nature, scale and complexity of the Society's business and the requirements and standards under the regulatory system to which it is subject; and
(2) has adequate qualifications and experience, which includes holding an appropriate practising certificate under the rules of the Institute of Actuaries or the Faculty of Actuaries;

and seek confirmation of these from the actuary, or the actuary's current and previous employers, as appropriate.

Disqualified actuaries

SUP 4.6.5

01/04/2013

  • R
The Society must not appoint under SUP 4.6.1 R as Lloyd's actuary an actuary who is disqualified by the FCA under section 345 of the Act (Disciplinary measures: FCA) or the PRA under section 345A of the Act (Disciplinary measures: PRA) from acting:
(1) as an actuary for the Society; or
(2) as a syndicate actuary; or
(3) as an actuary for any other relevant class of firm.

SUP 4.6.6

01/04/2013

  • G
If it appears to the FCA or PRA that an actuary has failed to comply with a duty imposed on him under the Act, it may have the power to and may disqualify him under section 345 or 345A respectively of the Act. A list of actuaries who are disqualified may be found on the FCA website.

Conflicts of interest

SUP 4.6.7

01/04/2013

  • R
The Society must take reasonable steps to ensure that an actuary who is to be, or has been, appointed under SUP 4.6.1 R:
(1) does not perform the function of chairman or chief executive of the Society; and
(2) does not perform any other function on behalf of the Society which could give rise to a significant conflict of interest.

The Lloyd's actuary function

SUP 4.6.8

01/04/2013

  • R
An actuary who has been appointed to perform the Lloyd's actuary function must:
(1) prepare the statement required under IPRU(INS) 9.58 (1) to be annexed to the Lloyd's Return; and
(2) take reasonable steps to ensure that the general insurance businesstechnical provisions for each syndicate year have been reviewed by the syndicate actuary and that an appropriate opinion has been obtained under SUP 4.6.15 R; and
(3) where a syndicate actuary's opinion has not been provided, sets appropriate technical provisions and, within six months of the end of the financial year, submits a report to the PRA on the setting of those technical provisions.

Appointment of syndicate actuaries

SUP 4.6.9

01/04/2013

  • R
Each managing agent must, in respect of each syndicate it manages:
(1) appoint an actuary (the "syndicate actuary") to carry out the duties described in SUP 4.6.15 R or SUP 4.6.16 R; and
(2) appoint a replacement for that actuary if he ceases to hold office before he has carried out the duties described in SUP 4.6.15 R or SUP 4.6.16 R; and
(3) ensure that the replacement syndicate actuary can take up office at the time the vacancy arises or as soon as reasonably practicable after that.

SUP 4.6.10

01/04/2013

  • G
(1) The insurance market direction and guidance set out in SUP 3.1.4 G to SUP 3.1.15 G is relevant to actuaries appointed to report on the insurance business of members.
(2) References in SUP 4, as applied by SUP 4.1.3 R, to a firm include, where appropriate:
(a) a managing agent; and
(b) one or more member carrying on insurance business at Lloyd's policy through a syndicate;

and references to an actuary of a firm should be read accordingly.

Syndicate actuaries' qualifications

SUP 4.6.11

01/04/2013

  • R
Before a managing agent appoints a syndicate actuary, it must take reasonable steps to ensure that the syndicate actuary:
(1) has the required skill and experience to perform his duties; and
(2) is a fellow of an actuarial body or (except for a syndicate actuary of a long-term insurance business syndicate) is a fellow of the Casualty Actuarial Society who is a member of an actuarial body.

SUP 4.6.12

01/04/2013

  • G
To comply with SUP 4.6.11 R and Principle 3, before a syndicate actuary takes up his appointment a managing agent should ensure that the syndicate actuary:
(1) has skills and experience appropriate to the nature, scale and complexity of a syndicate's business and the requirements and standards under the regulatory system applicable to the activities of managing agents in relation to each syndicate which they manage; and
(2) has adequate qualifications and experience, which includes holding an appropriate practising certificate under the rules of the Institute of Actuaries or the Faculty of Actuaries;

and seeks confirmation of these from the syndicate actuary, or the syndicate actuary's current and previous employers, as appropriate.

Disqualified actuaries

SUP 4.6.13

01/04/2013

  • R
A managing agent must not appoint under SUP 4.6.9 R as syndicate actuary an actuary who is disqualified by the FCA under section 345 of the Act (Disciplinary measures: FCA) or the PRA under section 345A of the Act (Disciplinary measures: PRA) from acting:
(1) as a syndicate actuary; or
(2) as a Lloyd's actuary; or
(3) as an actuary for a relevant class of firm.

SUP 4.6.14

01/04/2013

  • G
If it appears to the FCA or PRA that an actuary has failed to comply with a duty imposed on him under the Act, it may have the power to and may disqualify him under section 345 or 345A respectively of the Act. A list of actuaries who are disqualified may be found on the FCA website.

Duties of syndicate actuaries

SUP 4.6.15

01/04/2013

  • R
The syndicate actuary of a long-term insurance business syndicate must:
(1) make an investigation at the end of each financial year into the financial condition of the business carried on through each syndicate year (other than a closed year);
(2) make an abstract of his report of the investigation; and
(3) prepare the certificate required under IPRU(INS) 9.58 (3) to be annexed to the Lloyd's Return.

SUP 4.6.16

01/04/2013

  • R
The syndicate actuary of a general insurance business syndicate must:
(1) review the technical provisions (both gross and net of reinsurance recoveries) of each syndicate year (other than a closed year); and
(2) provide his opinion confirming that the technical provisions for each syndicate year are no less prudent than his best estimate of the amounts required.

SUP 4.6.17

01/04/2013

  • R
If a managing agent becomes aware that the syndicate actuary of a general insurance business syndicate will or may be unable to produce an unqualified opinion under SUP 4.6.16 R, the managing agent must promptly inform the PRA that this is the case.

SUP 4.6.18

01/04/2013

  • R
In carrying out his duties a syndicate actuary must pay due regard to generally accepted actuarial best practice.

SUP 4.6.19

01/04/2013

  • G
The standards and guidance issued by the Institute of Actuaries and the Faculty of Actuaries are important sources of actuarial best practice.

SUP 10B

PRA Approved Persons

SUP 10B.1

01/04/2013

Application

General

SUP 10B.1.1

01/04/2013

  • R
This chapter applies to every PRA-authorised person.

SUP 10B.1.2

01/04/2013

  • G
This chapter is also relevant to every PRA-approved person.

SUP 10B.1.3

01/04/2013

  • G
The rules in this chapter specify descriptions of PRA controlled functions under section 59 of the Act (Approval for particular arrangements).

SUP 10B.1.4

01/04/2013

  • G
The directions in this chapter relate to the manner in which a firm must apply for the PRA's approval under section 59 of the Act and other procedures.

Overseas firms: UK services

SUP 10B.1.5

01/04/2013

  • R
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.

Overseas firms: UK establishments

SUP 10B.1.6

01/04/2013

  • R
Only the following PRA 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 UK branch 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 UK branch 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;

Incoming EEA firms and incoming Treaty firms

SUP 10B.1.7

01/04/2013

  • R
This chapter does not apply to:
(1) an incoming EEA firm; or
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 auction regulation, to an authority in a country or territory outside the United Kingdom.

SUP 10B.1.8

01/04/2013

  • G
SUP 10B.1.7 R reflects the provisions of section 59(8) of the Act and, in relation to an incoming Treaty firm the Treaty. 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 UKbranch manager, of an incoming EEA firm, acting in that capacity, will not therefore have to be approved by the PRA under the Act.

SUP 10B.1.9

01/04/2013

  • G
Notwithstanding SUP 10B.1.8 G, 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.

SUP 10B.1.10

01/04/2013

  • G
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 PRA controlled function, the firm will need to seek approval for that person to perform that PRA controlled function.

Incoming EEA firms: passported activities from a branch

SUP 10B.1.11

01/04/2013

  • R
None of the PRA controlled functions apply to an incoming EEA firm with respect to its passported activities carried on from a branch in the United Kingdom.

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

SUP 10B.1.12

01/04/2013

  • R
In relation to the activities of a firm for which it has a top-up permission, only the PRA required functions apply.

Committees of the Society of Lloyd's

SUP 10B.1.13

01/04/2013

  • R
For the purpose of SUP 10B.6.1 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.

SUP 10B.1.14

01/04/2013

  • R
For the purpose of SUP 10B.6.3 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.

Insolvency practitioners

SUP 10B.1.15

01/04/2013

  • R
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.

Appointed representatives

SUP 10B.1.16

01/04/2013

  • G
The PRA has no special rule relating to appointed representatives. Therefore, SUP 10B applies to an appointed representative of a firm in the same way as it does to any other contractor of the firm (see SUP 10B.3.1 R). In practice in SUP 10B the main application to appointed representatives of a firm will be to people seconded by the appointed representative to the firm.

SUP 10B.2

01/04/2013

Purpose

SUP 10B.2.1

01/04/2013

  • G
The immediate purpose of SUP 10B.3 to SUP 10B.9 is to specify, under section 59 of the Act, descriptions of the PRA controlled functions which are listed in SUP 10B.4.3 R. The underlying purpose is to establish, and mark the boundaries of, the PRA's "approved persons regime".

SUP 10B.3

01/04/2013

Basic rules for all PRA controlled functions

The need for an arrangement

SUP 10B.3.1

01/04/2013

  • R
A function is a PRA 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.

SUP 10B.3.2

01/04/2013

  • G
Sections 59(1) and (2) of the Act provide that approval is necessary in respect of a PRA 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.

SUP 10B.3.3

01/04/2013

  • G
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 10B.11.6 G and SUP 10B.11.7 G.

SUP 10B.3.4

01/04/2013

  • G
If, however, a firm is a member of a group, and the arrangements for the performance of a PRA 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.

SUP 10B.3.5

01/04/2013

  • G
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.

Significant-influence functions

SUP 10B.3.6

01/04/2013

  • R
Each PRA controlled function is one which comes within the definition of a significant-influence function.

SUP 10B.3.7

01/04/2013

  • G
Section 59(6) of the Act says that the PRA may specify a description of function as a PRA controlled function only if, in relation to the carrying on of a regulated activity by a firm, it is satisfied that the function is a significant-influence function.

SUP 10B.3.8

01/04/2013

  • G
Section 59(7B) of the Act says that a significant-influence function, in relation to the carrying on of a regulated activity by a firm, means a function that is likely to enable the person responsible for its performance to exercise a significant influence on the conduct of the firm's affairs, so far as relating to the activity.

SUP 10B.3.9

01/04/2013

  • G
SUP 10B.3.6 R gives effect to sections 59(6) and 59(7B) of the Act.

SUP 10B.3.10

01/04/2013

  • G
Whether a 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 PRA has identified the PRA controlled functions as satisfying this condition.

Actions for damages

SUP 10B.3.11

01/04/2013

  • R
A contravention of the rules in SUP 10B (other than SUP 10B.1 to SUP 10B.9) gives rise to a right of action by a private person under section 138D of the Act (and each of those rules is specified under section 138D(1) of the Act as a provision giving rise to such a right of action).

SUP 10B.4

01/04/2013

Specification of functions

SUP 10B.4.1

01/04/2013

  • R
Each of the functions described in SUP 10B.4.3 R (the table of PRA controlled functions) is a PRA controlled function.

SUP 10B.4.2

01/04/2013

  • G
The fact that a person may be approved for one purpose does not have the effect of bringing all his activities within that PRA controlled function.

SUP 10B.5

01/04/2013

Temporary vacancies

SUP 10B.5.1

01/04/2013

  • R
If:
(1) a firm appoints an individual to perform a function which, but for this rule, would be a PRA controlled 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 PRA controlled function does not relate to those activities of that individual.

SUP 10B.5.2

01/04/2013

  • G
SUP 10B.5.1 R enables cover to be given for 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 PRA controlled function for more than 12 weeks, the firm should apply for approval.

SUP 10B.6

01/04/2013

PRA governing functions

Director function (CF1)

SUP 10B.6.1

01/04/2013

  • R
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 a director (other than non-executive director) of that firm.

SUP 10B.6.2

01/04/2013

  • R
(1) If a firm is a body corporate (other than a limited liability partnership), the director function is also the function of acting in the capacity of 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 of a parent undertaking or holding company of the firm; and
(b) whose decisions or actions are regularly taken into account by the governing body of the firm.
(2) (1) does not apply if that parent undertaking or holding company has a Part 4A permission or is regulated by an EEA regulator.
(3) (1) does not apply to the function falling into SUP 10B.6.4 R (non-executive director of the parent undertaking or holding company).

Non-executive director function

SUP 10B.6.3

01/04/2013

  • R
If a firm is a body corporate, the non-executive director function is the function of acting in the capacity of a non-executive director of that firm.

SUP 10B.6.4

01/04/2013

  • R
(1) If a firm is a body corporate, the non-executive director function is also the function of acting in the capacity of a person:
(b) whose decisions or actions are regularly taken into account by the governing body of the firm.
(2) However, (1) does not apply if that parent undertaking or holding company has a Part 4A permission or is regulated by an EEA regulator.

SUP 10B.6.5

01/04/2013

  • R
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 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). This does not apply to an individual performing the director function.

SUP 10B.6.6

01/04/2013

  • G
A firm should notify the PRA if a person moves between certain roles making up the non-executive director function (SUP 10B.12.6 R).

Chief executive function (CF3)

SUP 10B.6.7

01/04/2013

  • R
The chief executive function is the function of acting in the capacity of a chief executive of a firm.

SUP 10B.6.8

01/04/2013

  • G
This function is having the responsibility, alone or jointly with one or more others, under the immediate authority of the governing body:
(1) for the conduct of the whole of the business (or relevant activities); or
(2) in the case of a branch in the United Kingdom of an overseas firm, for the conduct of all of the activities subject to the UKregulatory system.

SUP 10B.6.9

01/04/2013

  • G
For a branch in the United Kingdom of an overseas firm, the PRA 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 UK regulatory 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.

SUP 10B.6.10

01/04/2013

  • G
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.

SUP 10B.6.11

01/04/2013

  • G
Note that a body corporate may be a chief executive. If so, it will need to be approved to perform the chief executive function.

Partner function (CF4)

SUP 10B.6.12

01/04/2013

  • R
If a firm is a partnership, the partner function is the function of acting in the capacity of a partner in that firm.

SUP 10B.6.13

01/04/2013

  • R
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.

SUP 10B.6.14

01/04/2013

  • R
If a partnership is registered under the Limited Partnership Act 1907, the partner function does not extend to any function performed by a limited partner.

Director of unincorporated association function (CF5)

SUP 10B.6.15

01/04/2013

  • R
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.

Small friendly society function (CF6)

SUP 10B.6.16

01/04/2013

  • R
(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 PRA 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.

SUP 10B.6.17

01/04/2013

  • R
(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.

SUP 10B.6.18

01/04/2013

  • G
Future version
01/01/2016
(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 PRA 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 a PRA-approved person under SUP 10B.6.16 R.
(2) The PRA expects that any apportionment of responsibilities will have taken place under SYSC 2.1.1 R. The PRA 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).

Insurance mediation

SUP 10B.6.19

03/08/2015

  • G

[deleted]

SUP 10B.6.20

03/08/2015

  • G

[deleted]

SUP 10B.7

01/04/2013

Other functions included in the governing functions

Systems and controls function

SUP 10B.7.1

01/04/2013

  • R
Future version
01/01/2016
Each of the PRA governing functions includes, where apportioned under SYSC 2.1.1 R, SYSC 4.3.1 R or SYSC 4.4.3 R, the systems and controls function. This does not apply to the non-executive director function or the function described in SUP 10B.6.2 R.

SUP 10B.7.2

01/04/2013

  • G
The effect of SUP 10B.7.1 R is that a person who is approved to perform a PRA governing function (other than the non-executive director function or the function described in SUP 10B.6.2 R) will not have to be specifically approved to perform the systems and controls function. A person who is approved to perform a PRA governing function will have to be additionally approved before he can perform any of the PRA required functions.

The FCA's apportionment and oversight function (CF8)

SUP 10B.7.3

01/04/2013

  • R
If:
(1) a person has been approved to perform a PRA governing function in relation to a firm and that approval is still in force;
(2) that person is also performing a function that falls within the apportionment and oversight function in relation to that firm (or would do so except for SUP 10A.11.11 R (FCA rule disapplying the apportionment and oversight function in relation to a person approved by the PRA to perform a governing function)); and
(3) that person is not the subject of a current FCA approved person approval for the apportionment and oversight function in relation to that firm;
that PRA governing function includes the apportionment and oversight function (or, if there is more than one such PRA governing function, each them does).

SUP 10B.7.4

01/04/2013

  • R
If in relation to a firm:
(1)  SUP 10B.7.3 R has applied to a PRA-approved person;
(2) that person has ceased to perform any PRA governing function (ignoring the expansion of that function by SUP 10B.7.3 R); and
(3) that person is still performing what would otherwise be the apportionment and oversight function;
SUP 10B.7.3 R continues to apply for three months after that PRA-approved person would otherwise have ceased to perform the PRA controlled function or, if sooner, until the FCA has approved the performance by that person of the apportionment and oversight function in relation to the firm.

SUP 10B.7.5

01/04/2013

  • G
An example of the way SUP 10B.7.4 R works is this. Say that a person (A) is appointed as director and the person who performs the apportionment and oversight function. A will be performing the director function but will not be performing the apportionment and oversight function. Say that later A gives up his role as director but remains as the person who performs apportionment and oversight function. If SUP 10B.7.4 R (and the corresponding parts of the FCA's Handbook) did not apply the result would be that A would cease to perform a PRA controlled function but would start performing the apportionment and oversight function before A had a chance to apply to the FCA for approval. The combined effect of SUP 10B.7.4 R and SUP 10A.11 of the FCA's Handbook is that the firm has three months to secure approval by the FCA for A's performance of the apportionment and oversight function and during that interim period A keeps his status as a PRA-approved person.

SUP 10B.7.6

01/04/2013

  • G
Further details of how SUP 10B.7.3 R and SUP 10B.7.4 R work can be found in SUP 10A.11 of the FCA's Handbook.

SUP 10B.8

01/04/2013

PRA required functions

Actuarial function (CF12)

SUP 10B.8.1

01/04/2013

  • R
Future version
01/01/2016
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.

With-profits actuary function (CF12A)

SUP 10B.8.2

01/04/2013

  • R
Future version
01/01/2016
The with-profits actuary 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 4.3.16A R.

Lloyd's actuary function (CF12B)

SUP 10B.8.3

01/04/2013

  • R
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.

SUP 10B.9

01/04/2013

Systems and controls function

Systems and controls function (CF28)

SUP 10B.9.1

02/04/2015

  • R
Future version
01/01/2016
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, SYSC 7.1.6 R and, for CRR firms, Risk Control 2.5 of the PRA Rulebook); and
(3) adherence to internal systems and controls, procedures and policies (see SYSC 3.2.16 G, SYSC 6.2 and, for CRR firms, Compliance and Internal Audit 3.1 of the PRA Rulebook).

SUP 10B.9.2

01/04/2013

  • R
The systems and controls function does not apply in relation to bidding in emissions auctions carried on by a firm that is exempt from MiFID under article 2(1)(i).

SUP 10B.9.3

01/04/2013

  • G
Where an employee performs the systems and controls function the PRA 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.

SUP 10B.10

01/04/2013

Procedures relating to PRA-approved persons

Forms

SUP 10B.10.1

01/04/2013

  • G
The forms listed in SUP SUP 10B.10.2 G are referred to in SUP 10B.11 (Application for approval and withdrawing an application for approval) to SUP 10B.14 (How to apply for approval and give notifications).

SUP 10B.10.2

01/04/2013

  • G
Table PRA-approved persons forms
Form Purpose Handbook requirement
the relevant Form A The relevant online form on the FCA's and PRA's ONA system or the form in SUP 10B Annex 4D (See Note) Application to perform controlled functions under the approved persons regime SUP 10B.11.4 D
Form B SUP 10B Annex 5R Notice to withdraw an application to perform controlled functions under the approved persons regime SUP 10B.11.20 R
Form C SUP 10B Annex 6R Notice of ceasing to perform controlled functions SUP 10B.12.10 R
Form D SUP 10B Annex 7R Notification of changes in personal information or application details SUP 10B.12.16 R
Form E The relevant online form on the FCA's and PRA's ONA system or the form in SUP 10B Annex 8D (See Note) Internal transfer of an approved person SUP 10B.12.4 D
Note: The form in the SUP annex shown is to be used by credit unions, and by other firms only in the event of a failure of the information technology systems used by the PRA. See the relevant "Handbook requirement".

SUP 10B.10.3

01/04/2013

  • G
A summary of the forms and their purposes is in SUP 10B Annex 2G.

SUP 10B.10.4

01/04/2013

  • G
Unless the context otherwise requires, in SUP 10B.10 (Procedures relating to PRA-approved person) to SUP 10B.14 (How to apply for approval and give notifications) where reference is made to a firm, this also includes an applicant for Part 4A permission, and other persons seeking to carry on regulated activities as an authorised person.

SUP 10B.10.5

01/04/2013

  • G
Forms B, C, D and E can only be submitted in respect of a PRA-approved person by the firm that submitted a PRA-approved person's original application (the relevant Form A).

SUP 10B.10.6

01/04/2013

  • G
Copies of Forms A, B, C, D and E may be obtained from the PRA's website. Credit unions can obtain copies by email at PRA-ApprovedPersons@bankofengland.co.uk. To contact the PRA for general approved persons enquiries please contact PRA Firm Enquiries:
(1) telephone: +44 (0) 20 3461 7000; or
(2) write to:
PRA Firm Enquiries
Prudential Regulation Authority
20 Moorgate
London EC2R 6DA; or
(3) e-mail: PRA-ApprovedPersons@bankofengland.co.uk.

SUP 10B.11

01/04/2013

Application for approval and withdrawing an application for approval

When to apply for approval

SUP 10B.11.1

01/04/2013

  • G
In accordance with section 59 of the Act (Approval for particular arrangements), where a candidate will be performing one or more PRA 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 PRA with the consent of the FCA.

SUP 10B.11.2

01/04/2013

  • G
Under section 59B of the Act (Role of FCA in relation to PRA decisions) the FCA may arrange with the PRA that in agreed kinds of cases there is no need for the consent of the FCA. There are currently no such arrangements in place.

Failure to apply for approval

SUP 10B.11.3

01/04/2013

  • G
If a person performs a PRA controlled function without approval it is not only the firm that is accountable. Under section 63A of the Act (Power to impose penalties) if the PRA is satisfied that:
(1) a person ("P") has at any time performed a PRA controlled function without approval; and
(2) at that time P knew, or could reasonably be expected to have known, that P was performing a PRA controlled function without approval;
it may impose a penalty on P of such amount as it considers appropriate.

How to apply for approval

SUP 10B.11.4

01/04/2013

  • D
An application by a firm for the PRA's approval under section 59 of the Act (Approval for particular arrangements) must be made by completing Form A (except where SUP 10B.12.4 D requires a Form E).

SUP 10B.11.5

01/04/2013

  • G
SUP 10B.14.1 D explains how applications should be submitted.

Who should make the application?

SUP 10B.11.6

02/04/2015

  • G
Future version
01/01/2016
(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 PRA candidate; or
(2) Usually this will be the firm that is employing the PRA candidate to perform the PRA controlled function. Where a firm has outsourced the performance of a PRA controlled function, the details of the outsourcing determine where responsibility lies and whom the PRA anticipates will submit PRA-approved persons application forms. SUP 10B.11.7 G describes some common situations. The firm which is outsourcing is referred to as "A" and the person to whom the performance of the PRA controlled function has been outsourced, or which makes the arrangement for the PRA 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 PRA controlled function under an arrangement entered into by its contract or in relation to the carrying on by A of a regulated activity, without approval from the PRA. See also SYSC 3.2.4 G and SYSC 8.1.1 R, and, for CRR firms, Outsourcing 2.1 of the PRA Rulebookand SYSC 13.9 for insurers.

SUP 10B.11.7

19/06/2014

  • G
Future version
01/01/2016
Outsourcing arrangements
Outsourcing arrangements Submitting form
Firm A to Firm B The PRA will consider A to have taken reasonable care if it enters into a contract with B under which B is responsible for ensuring that the relevant PRA controlled functions are performed by PRA-approved persons, and that it is reasonable for A to rely on this Firm B submits PRA-approved persons forms on behalf of Firm A
Outsourcing by A to B (both being a member of the same United Kingdom group and each having its registered office in the United Kingdom) See SUP 10B.3.4 G If a firm is a member of a group which includes more than one firm, any one undertaking in the group may notify the PRA on behalf of all firms in the group to which the notification applies. In this way, that undertaking may satisfy the obligation of all relevant firms in the group to notify the PRA. Nevertheless, the obligation to make the notification remains the responsibility of the individual firm itself.
(i) A to B, where B is a non-authorised person not part of the same group as A
(ii) A to B, where A is a branch of an overseas firm in the United Kingdom, and B is an overseas undertaking of the same group
(iii) A to B, where A is a UK authorised subsidiary of an overseas firm, and B is an overseas undertaking of the same group
Responsibility for (as opposed to the performance of) any activity outsourced to B will remain with A. See SYSC 3.2.4 G and SYSC 8 A ensures that an individual approved under one of the PRA controlled functions has responsibility for the outsourced arrangement and A submits a form in relation to that individual

SUP 10B.11.7A

02/04/2015

  • G
The reference to "SYSC 8" in in the table above must be read as "SYSC 8 or, in the case of a CRR firm, the Outsourcing Part of the PRA Rulebook".

Processing an application

SUP 10B.11.8

01/04/2013

  • G
The Act sets out the time that the PRA has to consider an application and come to a decision.

SUP 10B.11.9

01/04/2013

  • G
In any case where the application for approval is made by a person applying for permission under Part 4A of the Act the PRA has until the end of whichever of the following periods ends last:
(1) the period within which an application for that permission must be determined; and
(2) the period of three months from the time it receives a properly completed application.

SUP 10B.11.10

01/04/2013

  • G
In any other case it is the period of three months from the time it receives a properly completed application.

SUP 10B.11.11

01/04/2013

  • G
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 PRA candidate's suitability to be approved to undertake a PRA controlled function will be called into question. A person who provides information to the PRA 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.

SUP 10B.11.12

01/04/2013

  • G
The PRA will as soon as practicable notify the FCA of the receipt of an application to the PRA. There is no need for the firm to copy the application to the FCA.

SUP 10B.11.13

01/04/2013

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

SUP 10B.11.14

01/04/2013

  • G
The FCA may also ask the firm for more information about the PRA candidate. If it does this, the period in which the PRA must determine a completed application is extended in the same way as it is if the PRA asks for the information.

SUP 10B.11.15

01/04/2013

  • G
The PRA may only grant an application (and the FCA may only give its consent) if it is satisfied that the PRA candidate is a fit and proper person to perform the PRA controlled function stated in the application form. Responsibility lies with the firm making the application to satisfy the PRA and the FCA that the PRA candidate is fit and proper to perform the PRA controlled function applied for.

SUP 10B.11.16

01/04/2013

  • G
For further guidance on criteria for assessing whether a PRA candidate is fit and proper, see FIT.

Decisions on applications

SUP 10B.11.17

01/04/2013

  • G
The PRA must either grant the application or, if it proposes not to grant an application, issue a warning notice.

SUP 10B.11.18

01/04/2013

  • G
Whenever it grants an application, the PRA will confirm this in writing to all interested parties.

SUP 10B.11.19

01/04/2013

  • G
If the PRA proposes to refuse an application in relation to one or more PRA controlled functions, it must follow the procedures for issuing warning and decision notices.

Withdrawing an application for approval

SUP 10B.11.20

01/04/2013

  • R
A firm applying to withdraw an application for approval must notify the PRA, using Form B, in the form set out in SUP 10B Annex 5R.

SUP 10B.11.21

01/04/2013

  • G
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 PRA candidate and the person by whom the PRA candidate is or would have been employed, if this is not the firm making the application.

SUP 10B.11.22

01/04/2013

  • G
The PRA will as soon as practicable notify the FCA of the receipt of a notice of withdrawal. There is no need for the firm to copy the notice to the FCA.

SUP 10B.12

01/04/2013

Changes to a PRA-approved person's details

Moving within a firm

SUP 10B.12.1

01/04/2013

  • G
A PRA-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 PRA controlled functions different from those for which approval has already been granted, then an application must be made to the PRA for approval for the person to perform those PRA controlled functions. The firm must take reasonable care to ensure that an individual does not begin performing a PRA controlled function until the PRA has granted approved person status to that individual in respect of that PRA controlled function. Similarly, a firm must get the PRA's approval if a person is to start performing a PRA controlled function in relation to that firm when he already has the FCA's approval to perform an FCA controlled function in relation to that firm.

SUP 10B.12.2

01/04/2013

  • G
If an FCA-approved person or a PRA-approved person is ceasing to perform FCA controlled functions or PRA controlled functions, as well as applying for approval in respect of PRA controlled functions, SUP 10B.12.4 D generally applies. Further details can be found in SUP 10B Annex 2G.

SUP 10B.12.3

01/04/2013

  • G
If a person is to perform a PRA controlled function for a firm for which he already performs a PRA controlled function or FCA controlled function as an approved person but he is not at the same time ceasing to perform an FCA controlled function or PRA controlled function, a firm should use Form A rather than Form E. It is not mandatory to complete all parts of the form. See the notes relevant to each form for full details.

SUP 10B.12.4

01/04/2013

  • D
(1) 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 PRA controlled functions within the same firm or group.
(2) A firm must not use Form E if the approved person has never before been approved to perform a significant influence function for any firm or has not been the subject of a current approved person approval from the FCA or PRA to perform a significant influence function in relation to any firm for more than six months.
(3) A firm must not use Form E if a notification has been made or should be made under SUP 10B.12.18 R (Changes in fitness to be notified under Form D) or SUP 10A.14.17 R (the equivalent FCA rule) in relation to any controlled functions that, that person is ceasing to perform (as referred to in (1)) or any controlled function that he is continuing to perform in relation to that firm or a firm in the same group.

SUP 10B.12.5

01/04/2013

  • G
SUP 10B.14.1 D explains how applications should be submitted.

SUP 10B.12.6

01/04/2013

  • R
If a person is performing the non-executive director function in relation to a firm, the firm must notify the PRA as soon as possible if that person begins to perform or ceases to perform any of the following functions:
(1) the function of acting in the capacity of the chairman of the governing body of the firm; or
(2) the function of acting as a non-executive director who has been appointed by the non-executive directors to act as the senior independent director of that firm; or
(3) the function of acting in the capacity of the chairman of the governing body risk committee of the firm (if there is such a committee). For these purposes, the governing body risk committee means the committee described in SYSC 21.1.5 G; or
(4) the function of acting in the capacity of the chairman of the audit committee of the governing body of the firm (if there is such a committee); or
(5) the function of acting in the capacity of the chairman of the remuneration committee of the governing body of the firm (if there is such a committee).
Any such notification must be e-mailed to the PRA'sapproved persons mailbox at PRA-ApprovedPersons@bankofengland.co.uk

SUP 10B.12.7

01/04/2013

  • G
So for example if a non-executive director moves from being chair of the audit committee to chair of the risk committee or adds the role of chair of the audit committee to his existing role as chair of the risk committee he does not require approval from the PRA. However, the firm should notify the PRA of that change as soon as possible. If a person stops performing the non-executive director function altogether, SUP 10B.12.4 D or SUP 10B.12.10 R apply instead.

Moving between firms

SUP 10B.12.8

01/04/2013

  • G
If it is proposed that a PRA-approved person will no longer be performing a PRA controlled function under an arrangement entered into by one firm or one of its contractors, but will be performing the same or a different PRA 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 PRA controlled function by that person.

SUP 10B.12.9

01/04/2013

  • G
In certain circumstances, when the PRA 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.

Ceasing to perform a PRA controlled function

SUP 10B.12.10

01/04/2013

  • R
A firm must submit to the PRA a completed Form C, in the form set out in SUP 10B Annex 6R no later than seven business days after a PRA-approved person ceases to perform a PRA controlled function. This does not apply if the firm has already notified the PRA of the proposal to do that using Form E in accordance with this chapter or has notified the FCA of the proposal to do using the FCA's Form E in accordance with SUP 10A of the FCA's Handbook.

SUP 10B.12.11

01/04/2013

  • G
SUP 10B.14.1 D explains how notifications should be submitted.

SUP 10B.12.12

01/04/2013

  • R
(1) A firm must notify the PRA 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 a PRA-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 PRA-approved person from its employment; or
(b) relates to the resignation by the PRA-approved person while under investigation by the firm, the PRA or any other regulatory body; or
(c) otherwise reasonably suggests that it may affect the PRA's assessment of the PRA-approved person's fitness and propriety.

SUP 10B.12.13

01/04/2013

  • G
Notification under SUP 10B.12.12 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 PRA in due course of the reason. This could be done using Form D, if appropriate.

SUP 10B.12.14

01/04/2013

  • G
A firm is responsible for notifying the PRA if any PRA-approved person has ceased to perform a PRA controlled function under an arrangement entered into by its appointed representative or former appointed representative.

SUP 10B.12.15

01/04/2013

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

Changes to a PRA-approved person's personal details

SUP 10B.12.16

01/04/2013

  • R
If a PRA-approved person's title, name or national insurance number changes, the firm for which the person performs a PRA controlled function must notify the PRA on Form D, in the form set out in SUP 10B Annex 7R, of that change within seven business days of the firm becoming aware of the matter.

SUP 10B.12.17

01/04/2013

  • G
The duty to notify in SUP 10B.12.16 R does not apply to changes to a PRA-approved person's private address.

SUP 10B.12.18

01/04/2013

  • R
If a firm becomes aware of information which would reasonably be material to the assessment of a PRA-approved person's, or a PRA candidate's, fitness and propriety (see FIT), it must inform the PRA on Form D, or (if it is more practical to do so and with the prior agreement of the PRA) by fax or e-mail, as soon as practicable.

SUP 10B.12.19

01/04/2013

  • G
SUP 10B.14.2 R applies to the submission of Form D.

SUP 10B.12.20

01/04/2013

  • G
Failing to disclose relevant information to the PRA may be a criminal offence under section 398 of the Act.

SUP 10B.12.21

01/04/2013

  • G
The duty to notify in SUP 10B.12.18 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.

SUP 10B.12.22

01/04/2013

  • R
(1) If, in relation to a firm which has completed the relevant Form A (SUP 10B Annex 4D), any of the details relating to arrangements and PRA controlled functions are to change, the firm must notify the PRA on Form D (SUP 10B Annex 7R).
(2) The notification under (1) must be made as soon as reasonably practicable after the firm becomes aware of the proposed change.
(3) This also applies in relation to a PRA controlled function for which an application was made using Form E.
(4) This rule also applies to a firm in respect of an approved person, to whom the grandfathering arrangements relating to the coming into force of the Act applied as if the firm had completed the relevant Form A for that person.

SUP 10B.13

01/04/2013

References and accurate information

References

SUP 10B.13.1

01/04/2013

  • R
(1) If a firm (A):
(a) is considering appointing a person to perform any PRA controlled function;
(b) requests another firm (B), as a current or former 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 10B 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 and data reports on stakeholder pensions) applies to B, the persistency of any life policies sold by that person.

SUP 10B.13.2

01/04/2013

  • G
The requirement in SUP 10B.13.1R (1) for firm (B) to give to firm (A) all relevant information of which it is aware concerning a person firm A is considering appointing to perform any of the PRA 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.

SUP 10B.13.3

01/04/2013

  • G
A firm supplying a reference in accordance with SUP 10B.13.1 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.

The need for complete and accurate information

SUP 10B.13.4

01/04/2013

  • G
The obligations to supply information to:
(1) the PRA under either SUP 10B.12.10 R or SUP 10B.12.12 R; or
(2) another firm under SUP 10B.13.1 R;
apply notwithstanding any agreement (for example a 'COT 3' Agreement settled by the Advisory, Conciliation and Arbitration Service (ACAS)) or any other arrangements entered into by a firm and an employee upon termination of the employee's employment. A firm should not enter into any such arrangements or agreements that could conflict with its obligations under this section.

SUP 10B.13.5

01/04/2013

  • G
Failing to disclose relevant information to the PRA may be a criminal offence under section 398 of the Act.

SUP 10B.14

01/04/2013

How to apply for approval and give notifications

SUP 10B.14.1

19/06/2014

  • D
(1) This direction applies to an application under Form A or Form E.
(2) An application by a firm other than a credit union must be made by submitting the Form online at http://fshandbook.info/FS/html/PRA/SUP/10B/14 using the form specified on the FCA's and PRA's ONA system.
(3) An application by a credit union must be made using the form in SUP 10B Annex 4D or SUP 10B Annex 8D and must be submitted in the way set out in Notifications 7 (Form and method of notification) of the PRA Rulebook.
(4) Where a firm is obliged to submit an application online under (2), if the information technology systems used by the PRA 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 10B Annex 4D or SUP 10B Annex 8D and submit it in the way set out in Notifications 7 (Form and method of notification) of the PRA Rulebook.

SUP 10B.14.2

01/04/2013

  • R
(1) This rule applies to a notification under Form C or Form D.
(2) A notification must be made in accordance with SUP 10B.14.1 D except that the annexes to SUP 10B in which the forms are to be found are SUP 10B Annex 6R or SUP 10B Annex 7R rather than the Annexes mentioned in SUP 10B.14.1 D.

SUP 10B.14.3

19/06/2014

  • G
If the information technology systems used by the PRA fail and online submission is unavailable for 24 hours or more, the FCA and PRA will endeavour to publish a notice on their websites confirming that online submission is unavailable and that the alternative methods of submission set out in SUP 10B.14.1D (4) andNotifications 7 (Form and method of notification) of the PRA Rulebook. should be used.

SUP 10B.14.4

02/04/2015

  • G
Where SUP 10B.14.1D (4) or the equivalent situation under SUP 10B.14.2 R applies to a firm, General Provisions 2.2 of the PRA Rulebook does not apply.

SUP 10B Annex 1

01/04/2013

[Not used]

01/04/2013

  • R
 

SUP 10B Annex 2

01/04/2013

Approved person regime: summary of forms and their use for applications for approval to perform a PRA-controlled function

01/04/2013

  • G
Function Form Submission
person about to perform a PRA controlled function if he has never been approved by the FCA or PRA before. A Submitted by the firm making the application before activities requiring approval commence.
Candidate is to perform a PRA controlled function and either has current approval to perform an FCA significant-influence function or a PRA controlled function or has had such an approval within the previous six months. Shortened Form
A
if conditions met
Submitted by the firm making the application before activities requiring approval commence.
Candidate ceased to be an approved person more than six months ago. A Submitted by the firm making the application before activities requiring approval commence.
Candidate is seeking to perform a significant-influence function for the first time or ceased to have approval from the FCA or PRA to perform such a function more than six months ago. A Submitted by the firm making the application before activities requiring approval commence.
Firm applying for an outstanding application to perform a PRA controlled function to be withdrawn. B Submitted by the firm: signed by all interested parties.
Person ceasing to perform a PRA controlled function. C (unless it should be notified under Form E) Submitted by the firm within seven business days of approved person ceasing to perform controlled function(s).
If a PRA-approved person's title, name or national insurance number changes, or there is information which may be material to the continuing assessment of an approved person's fitness and propriety. D Submitted by firm within seven business days of the firm becoming aware of the matter.
Person remaining with the same firm but changing PRA controlled functions. E Submitted by firm to the PRA before changes take place.
Person remaining with the same firm but giving up an FCA significant-influence function and taking up a PRA controlled function. E Submitted by firm to the PRA before changes take place.
Person remaining with the same firm in the circumstances described in SUP 10B.7.4 R (giving up a PRA controlled function triggering need for FCA approval). E Submitted by firm to the FCA in hard copy in advance of giving up the PRA governing function.
Person remaining with the same firm but giving up a PRA controlled function and taking up an FCA significant-influence function. E Submitted by firm to the FCA before changes take place (see the FCA's Handbook).
Person being appointed to a PRA governing function role who is about to start a function that would otherwise have come within the apportionment and oversight function. A or E as appropriate The form should mention that the person is to perform what would otherwise have been the apportionment and oversight function. See SUP 10A.11.10 G (table in the FCA's Handbook of examples of how the need for dual FCA and PRA approval in relation to PRA-authorised persons is reduced).
Person moving from one PRA governing function role to another while continuing to perform a function that would otherwise have come within the apportionment and oversight function. See previous row See previous row.

SUP 10B Annex 3

01/04/2013

[Not used]

01/04/2013

[Not used]

SUP 10B Annex 4

01/04/2013

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

01/04/2013

  • D
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 10B.12

SUP 10B Annex 5

01/04/2013

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

01/04/2013

  • D
This annex consists only of one or more forms. Forms are to be found through the following address: Supervision forms - SUP 10B Annex 5

SUP 10B Annex 6

01/04/2013

Form C: Notice of ceasing to perform controlled functions

01/04/2013

  • R
This annex consists of only one or more forms. Forms can be completed online now by visiting: http://www.fca.org.uk/firms/about-authorisation

The forms are also to be found through the following address: Supervision forms - SUP 10B Annex 6

SUP 10B Annex 7

01/04/2013

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

01/04/2013

  • R
This annex consists of only one or more forms. Forms can be completed online now by visiting: http://www.fca.org.uk/firms/about-authorisation

The forms are also to be found through the following address: Supervision forms - SUP 10B Annex 7

SUP 10B Annex 8

01/04/2013

Form E: Internal transfer of an approved person

01/04/2013

  • G
This annex consists only of one or more forms. Forms are to be found through the following address: Supervision forms - SUP 10B Annex 8

SUP 10B

PRA Approved Persons

SUP 10B.1

01/04/2013

Application

General

SUP 10B.1.1

01/04/2013

  • R
This chapter applies to every PRA-authorised person.

SUP 10B.1.2

01/04/2013

  • G
This chapter is also relevant to every PRA-approved person.

SUP 10B.1.3

01/04/2013

  • G
The rules in this chapter specify descriptions of PRA controlled functions under section 59 of the Act (Approval for particular arrangements).

SUP 10B.1.4

01/04/2013

  • G
The directions in this chapter relate to the manner in which a firm must apply for the PRA's approval under section 59 of the Act and other procedures.

Overseas firms: UK services

SUP 10B.1.5

01/04/2013

  • R
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.

Overseas firms: UK establishments

SUP 10B.1.6

01/04/2013

  • R
Only the following PRA 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 UK branch 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 UK branch 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;

Incoming EEA firms and incoming Treaty firms

SUP 10B.1.7

01/04/2013

  • R
This chapter does not apply to:
(1) an incoming EEA firm; or
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 auction regulation, to an authority in a country or territory outside the United Kingdom.

SUP 10B.1.8

01/04/2013

  • G
SUP 10B.1.7 R reflects the provisions of section 59(8) of the Act and, in relation to an incoming Treaty firm the Treaty. 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 UKbranch manager, of an incoming EEA firm, acting in that capacity, will not therefore have to be approved by the PRA under the Act.

SUP 10B.1.9

01/04/2013

  • G
Notwithstanding SUP 10B.1.8 G, 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.

SUP 10B.1.10

01/04/2013

  • G
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 PRA controlled function, the firm will need to seek approval for that person to perform that PRA controlled function.

Incoming EEA firms: passported activities from a branch

SUP 10B.1.11

01/04/2013

  • R
None of the PRA controlled functions apply to an incoming EEA firm with respect to its passported activities carried on from a branch in the United Kingdom.

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

SUP 10B.1.12

01/04/2013

  • R
In relation to the activities of a firm for which it has a top-up permission, only the PRA required functions apply.

Committees of the Society of Lloyd's

SUP 10B.1.13

01/04/2013

  • R
For the purpose of SUP 10B.6.1 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.

SUP 10B.1.14

01/04/2013

  • R
For the purpose of SUP 10B.6.3 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.

Insolvency practitioners

SUP 10B.1.15

01/04/2013

  • R
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.

Appointed representatives

SUP 10B.1.16

01/04/2013

  • G
The PRA has no special rule relating to appointed representatives. Therefore, SUP 10B applies to an appointed representative of a firm in the same way as it does to any other contractor of the firm (see SUP 10B.3.1 R). In practice in SUP 10B the main application to appointed representatives of a firm will be to people seconded by the appointed representative to the firm.

SUP 10B.2

01/04/2013

Purpose

SUP 10B.2.1

01/04/2013

  • G
The immediate purpose of SUP 10B.3 to SUP 10B.9 is to specify, under section 59 of the Act, descriptions of the PRA controlled functions which are listed in SUP 10B.4.3 R. The underlying purpose is to establish, and mark the boundaries of, the PRA's "approved persons regime".

SUP 10B.3

01/04/2013

Basic rules for all PRA controlled functions

The need for an arrangement

SUP 10B.3.1

01/04/2013

  • R
A function is a PRA 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.

SUP 10B.3.2

01/04/2013

  • G
Sections 59(1) and (2) of the Act provide that approval is necessary in respect of a PRA 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.

SUP 10B.3.3

01/04/2013

  • G
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 10B.11.6 G and SUP 10B.11.7 G.

SUP 10B.3.4

01/04/2013

  • G
If, however, a firm is a member of a group, and the arrangements for the performance of a PRA 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.

SUP 10B.3.5

01/04/2013

  • G
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.

Significant-influence functions

SUP 10B.3.6

01/04/2013

  • R
Each PRA controlled function is one which comes within the definition of a significant-influence function.

SUP 10B.3.7

01/04/2013

  • G
Section 59(6) of the Act says that the PRA may specify a description of function as a PRA controlled function only if, in relation to the carrying on of a regulated activity by a firm, it is satisfied that the function is a significant-influence function.

SUP 10B.3.8

01/04/2013

  • G
Section 59(7B) of the Act says that a significant-influence function, in relation to the carrying on of a regulated activity by a firm, means a function that is likely to enable the person responsible for its performance to exercise a significant influence on the conduct of the firm's affairs, so far as relating to the activity.

SUP 10B.3.9

01/04/2013

  • G
SUP 10B.3.6 R gives effect to sections 59(6) and 59(7B) of the Act.

SUP 10B.3.10

01/04/2013

  • G
Whether a 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 PRA has identified the PRA controlled functions as satisfying this condition.

Actions for damages

SUP 10B.3.11

01/04/2013

  • R
A contravention of the rules in SUP 10B (other than SUP 10B.1 to SUP 10B.9) gives rise to a right of action by a private person under section 138D of the Act (and each of those rules is specified under section 138D(1) of the Act as a provision giving rise to such a right of action).

SUP 10B.4

01/04/2013

Specification of functions

SUP 10B.4.1

01/04/2013

  • R
Each of the functions described in SUP 10B.4.3 R (the table of PRA controlled functions) is a PRA controlled function.

SUP 10B.4.2

01/04/2013

  • G
The fact that a person may be approved for one purpose does not have the effect of bringing all his activities within that PRA controlled function.

SUP 10B.5

01/04/2013

Temporary vacancies

SUP 10B.5.1

01/04/2013

  • R
If:
(1) a firm appoints an individual to perform a function which, but for this rule, would be a PRA controlled 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 PRA controlled function does not relate to those activities of that individual.

SUP 10B.5.2

01/04/2013

  • G
SUP 10B.5.1 R enables cover to be given for 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 PRA controlled function for more than 12 weeks, the firm should apply for approval.

SUP 10B.6

01/04/2013

PRA governing functions

Director function (CF1)

SUP 10B.6.1

01/04/2013

  • R
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 a director (other than non-executive director) of that firm.

SUP 10B.6.2

01/04/2013

  • R
(1) If a firm is a body corporate (other than a limited liability partnership), the director function is also the function of acting in the capacity of 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 of a parent undertaking or holding company of the firm; and
(b) whose decisions or actions are regularly taken into account by the governing body of the firm.
(2) (1) does not apply if that parent undertaking or holding company has a Part 4A permission or is regulated by an EEA regulator.
(3) (1) does not apply to the function falling into SUP 10B.6.4 R (non-executive director of the parent undertaking or holding company).

Non-executive director function

SUP 10B.6.3

01/04/2013

  • R
If a firm is a body corporate, the non-executive director function is the function of acting in the capacity of a non-executive director of that firm.

SUP 10B.6.4

01/04/2013

  • R
(1) If a firm is a body corporate, the non-executive director function is also the function of acting in the capacity of a person:
(b) whose decisions or actions are regularly taken into account by the governing body of the firm.
(2) However, (1) does not apply if that parent undertaking or holding company has a Part 4A permission or is regulated by an EEA regulator.

SUP 10B.6.5

01/04/2013

  • R
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 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). This does not apply to an individual performing the director function.

SUP 10B.6.6

01/04/2013

  • G
A firm should notify the PRA if a person moves between certain roles making up the non-executive director function (SUP 10B.12.6 R).

Chief executive function (CF3)

SUP 10B.6.7

01/04/2013

  • R
The chief executive function is the function of acting in the capacity of a chief executive of a firm.

SUP 10B.6.8

01/04/2013

  • G
This function is having the responsibility, alone or jointly with one or more others, under the immediate authority of the governing body:
(1) for the conduct of the whole of the business (or relevant activities); or
(2) in the case of a branch in the United Kingdom of an overseas firm, for the conduct of all of the activities subject to the UKregulatory system.

SUP 10B.6.9

01/04/2013

  • G
For a branch in the United Kingdom of an overseas firm, the PRA 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 UK regulatory 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.

SUP 10B.6.10

01/04/2013

  • G
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.

SUP 10B.6.11

01/04/2013

  • G
Note that a body corporate may be a chief executive. If so, it will need to be approved to perform the chief executive function.

Partner function (CF4)

SUP 10B.6.12

01/04/2013

  • R
If a firm is a partnership, the partner function is the function of acting in the capacity of a partner in that firm.

SUP 10B.6.13

01/04/2013

  • R
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.

SUP 10B.6.14

01/04/2013

  • R
If a partnership is registered under the Limited Partnership Act 1907, the partner function does not extend to any function performed by a limited partner.

Director of unincorporated association function (CF5)

SUP 10B.6.15

01/04/2013

  • R
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.

Small friendly society function (CF6)

SUP 10B.6.16

01/04/2013

  • R
(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 PRA 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.

SUP 10B.6.17

01/04/2013

  • R
(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.

SUP 10B.6.18

01/04/2013

  • G
Future version
01/01/2016
(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 PRA 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 a PRA-approved person under SUP 10B.6.16 R.
(2) The PRA expects that any apportionment of responsibilities will have taken place under SYSC 2.1.1 R. The PRA 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).

Insurance mediation

SUP 10B.6.19

03/08/2015

  • G

[deleted]

SUP 10B.6.20

03/08/2015

  • G

[deleted]

SUP 10B.7

01/04/2013

Other functions included in the governing functions

Systems and controls function

SUP 10B.7.1

01/04/2013

  • R
Future version
01/01/2016
Each of the PRA governing functions includes, where apportioned under SYSC 2.1.1 R, SYSC 4.3.1 R or SYSC 4.4.3 R, the systems and controls function. This does not apply to the non-executive director function or the function described in SUP 10B.6.2 R.

SUP 10B.7.2

01/04/2013

  • G
The effect of SUP 10B.7.1 R is that a person who is approved to perform a PRA governing function (other than the non-executive director function or the function described in SUP 10B.6.2 R) will not have to be specifically approved to perform the systems and controls function. A person who is approved to perform a PRA governing function will have to be additionally approved before he can perform any of the PRA required functions.

The FCA's apportionment and oversight function (CF8)

SUP 10B.7.3

01/04/2013

  • R
If:
(1) a person has been approved to perform a PRA governing function in relation to a firm and that approval is still in force;
(2) that person is also performing a function that falls within the apportionment and oversight function in relation to that firm (or would do so except for SUP 10A.11.11 R (FCA rule disapplying the apportionment and oversight function in relation to a person approved by the PRA to perform a governing function)); and
(3) that person is not the subject of a current FCA approved person approval for the apportionment and oversight function in relation to that firm;
that PRA governing function includes the apportionment and oversight function (or, if there is more than one such PRA governing function, each them does).

SUP 10B.7.4

01/04/2013

  • R
If in relation to a firm:
(1)  SUP 10B.7.3 R has applied to a PRA-approved person;
(2) that person has ceased to perform any PRA governing function (ignoring the expansion of that function by SUP 10B.7.3 R); and
(3) that person is still performing what would otherwise be the apportionment and oversight function;
SUP 10B.7.3 R continues to apply for three months after that PRA-approved person would otherwise have ceased to perform the PRA controlled function or, if sooner, until the FCA has approved the performance by that person of the apportionment and oversight function in relation to the firm.

SUP 10B.7.5

01/04/2013

  • G
An example of the way SUP 10B.7.4 R works is this. Say that a person (A) is appointed as director and the person who performs the apportionment and oversight function. A will be performing the director function but will not be performing the apportionment and oversight function. Say that later A gives up his role as director but remains as the person who performs apportionment and oversight function. If SUP 10B.7.4 R (and the corresponding parts of the FCA's Handbook) did not apply the result would be that A would cease to perform a PRA controlled function but would start performing the apportionment and oversight function before A had a chance to apply to the FCA for approval. The combined effect of SUP 10B.7.4 R and SUP 10A.11 of the FCA's Handbook is that the firm has three months to secure approval by the FCA for A's performance of the apportionment and oversight function and during that interim period A keeps his status as a PRA-approved person.

SUP 10B.7.6

01/04/2013

  • G
Further details of how SUP 10B.7.3 R and SUP 10B.7.4 R work can be found in SUP 10A.11 of the FCA's Handbook.

SUP 10B.8

01/04/2013

PRA required functions

Actuarial function (CF12)

SUP 10B.8.1

01/04/2013

  • R
Future version
01/01/2016
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.

With-profits actuary function (CF12A)

SUP 10B.8.2

01/04/2013

  • R
Future version
01/01/2016
The with-profits actuary 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 4.3.16A R.

Lloyd's actuary function (CF12B)

SUP 10B.8.3

01/04/2013

  • R
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.

SUP 10B.9

01/04/2013

Systems and controls function

Systems and controls function (CF28)

SUP 10B.9.1

02/04/2015

  • R
Future version
01/01/2016
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, SYSC 7.1.6 R and, for CRR firms, Risk Control 2.5 of the PRA Rulebook); and
(3) adherence to internal systems and controls, procedures and policies (see SYSC 3.2.16 G, SYSC 6.2 and, for CRR firms, Compliance and Internal Audit 3.1 of the PRA Rulebook).

SUP 10B.9.2

01/04/2013

  • R
The systems and controls function does not apply in relation to bidding in emissions auctions carried on by a firm that is exempt from MiFID under article 2(1)(i).

SUP 10B.9.3

01/04/2013

  • G
Where an employee performs the systems and controls function the PRA 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.

SUP 10B.10

01/04/2013

Procedures relating to PRA-approved persons

Forms

SUP 10B.10.1

01/04/2013

  • G
The forms listed in SUP SUP 10B.10.2 G are referred to in SUP 10B.11 (Application for approval and withdrawing an application for approval) to SUP 10B.14 (How to apply for approval and give notifications).

SUP 10B.10.2

01/04/2013

  • G
Table PRA-approved persons forms
Form Purpose Handbook requirement
the relevant Form A The relevant online form on the FCA's and PRA's ONA system or the form in SUP 10B Annex 4D (See Note) Application to perform controlled functions under the approved persons regime SUP 10B.11.4 D
Form B SUP 10B Annex 5R Notice to withdraw an application to perform controlled functions under the approved persons regime SUP 10B.11.20 R
Form C SUP 10B Annex 6R Notice of ceasing to perform controlled functions SUP 10B.12.10 R
Form D SUP 10B Annex 7R Notification of changes in personal information or application details SUP 10B.12.16 R
Form E The relevant online form on the FCA's and PRA's ONA system or the form in SUP 10B Annex 8D (See Note) Internal transfer of an approved person SUP 10B.12.4 D
Note: The form in the SUP annex shown is to be used by credit unions, and by other firms only in the event of a failure of the information technology systems used by the PRA. See the relevant "Handbook requirement".

SUP 10B.10.3

01/04/2013

  • G
A summary of the forms and their purposes is in SUP 10B Annex 2G.

SUP 10B.10.4

01/04/2013

  • G
Unless the context otherwise requires, in SUP 10B.10 (Procedures relating to PRA-approved person) to SUP 10B.14 (How to apply for approval and give notifications) where reference is made to a firm, this also includes an applicant for Part 4A permission, and other persons seeking to carry on regulated activities as an authorised person.

SUP 10B.10.5

01/04/2013

  • G
Forms B, C, D and E can only be submitted in respect of a PRA-approved person by the firm that submitted a PRA-approved person's original application (the relevant Form A).

SUP 10B.10.6

01/04/2013

  • G
Copies of Forms A, B, C, D and E may be obtained from the PRA's website. Credit unions can obtain copies by email at PRA-ApprovedPersons@bankofengland.co.uk. To contact the PRA for general approved persons enquiries please contact PRA Firm Enquiries:
(1) telephone: +44 (0) 20 3461 7000; or
(2) write to:
PRA Firm Enquiries
Prudential Regulation Authority
20 Moorgate
London EC2R 6DA; or
(3) e-mail: PRA-ApprovedPersons@bankofengland.co.uk.

SUP 10B.11

01/04/2013

Application for approval and withdrawing an application for approval

When to apply for approval

SUP 10B.11.1

01/04/2013

  • G
In accordance with section 59 of the Act (Approval for particular arrangements), where a candidate will be performing one or more PRA 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 PRA with the consent of the FCA.

SUP 10B.11.2

01/04/2013

  • G
Under section 59B of the Act (Role of FCA in relation to PRA decisions) the FCA may arrange with the PRA that in agreed kinds of cases there is no need for the consent of the FCA. There are currently no such arrangements in place.

Failure to apply for approval

SUP 10B.11.3

01/04/2013

  • G
If a person performs a PRA controlled function without approval it is not only the firm that is accountable. Under section 63A of the Act (Power to impose penalties) if the PRA is satisfied that:
(1) a person ("P") has at any time performed a PRA controlled function without approval; and
(2) at that time P knew, or could reasonably be expected to have known, that P was performing a PRA controlled function without approval;
it may impose a penalty on P of such amount as it considers appropriate.

How to apply for approval

SUP 10B.11.4

01/04/2013

  • D
An application by a firm for the PRA's approval under section 59 of the Act (Approval for particular arrangements) must be made by completing Form A (except where SUP 10B.12.4 D requires a Form E).

SUP 10B.11.5

01/04/2013

  • G
SUP 10B.14.1 D explains how applications should be submitted.

Who should make the application?

SUP 10B.11.6

02/04/2015

  • G
Future version
01/01/2016
(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 PRA candidate; or
(2) Usually this will be the firm that is employing the PRA candidate to perform the PRA controlled function. Where a firm has outsourced the performance of a PRA controlled function, the details of the outsourcing determine where responsibility lies and whom the PRA anticipates will submit PRA-approved persons application forms. SUP 10B.11.7 G describes some common situations. The firm which is outsourcing is referred to as "A" and the person to whom the performance of the PRA controlled function has been outsourced, or which makes the arrangement for the PRA 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 PRA controlled function under an arrangement entered into by its contract or in relation to the carrying on by A of a regulated activity, without approval from the PRA. See also SYSC 3.2.4 G and SYSC 8.1.1 R, and, for CRR firms, Outsourcing 2.1 of the PRA Rulebookand SYSC 13.9 for insurers.

SUP 10B.11.7

19/06/2014

  • G
Future version
01/01/2016
Outsourcing arrangements
Outsourcing arrangements Submitting form
Firm A to Firm B The PRA will consider A to have taken reasonable care if it enters into a contract with B under which B is responsible for ensuring that the relevant PRA controlled functions are performed by PRA-approved persons, and that it is reasonable for A to rely on this Firm B submits PRA-approved persons forms on behalf of Firm A
Outsourcing by A to B (both being a member of the same United Kingdom group and each having its registered office in the United Kingdom) See SUP 10B.3.4 G If a firm is a member of a group which includes more than one firm, any one undertaking in the group may notify the PRA on behalf of all firms in the group to which the notification applies. In this way, that undertaking may satisfy the obligation of all relevant firms in the group to notify the PRA. Nevertheless, the obligation to make the notification remains the responsibility of the individual firm itself.
(i) A to B, where B is a non-authorised person not part of the same group as A
(ii) A to B, where A is a branch of an overseas firm in the United Kingdom, and B is an overseas undertaking of the same group
(iii) A to B, where A is a UK authorised subsidiary of an overseas firm, and B is an overseas undertaking of the same group
Responsibility for (as opposed to the performance of) any activity outsourced to B will remain with A. See SYSC 3.2.4 G and SYSC 8 A ensures that an individual approved under one of the PRA controlled functions has responsibility for the outsourced arrangement and A submits a form in relation to that individual

SUP 10B.11.7A

02/04/2015

  • G
The reference to "SYSC 8" in in the table above must be read as "SYSC 8 or, in the case of a CRR firm, the Outsourcing Part of the PRA Rulebook".

Processing an application

SUP 10B.11.8

01/04/2013

  • G
The Act sets out the time that the PRA has to consider an application and come to a decision.

SUP 10B.11.9

01/04/2013

  • G
In any case where the application for approval is made by a person applying for permission under Part 4A of the Act the PRA has until the end of whichever of the following periods ends last:
(1) the period within which an application for that permission must be determined; and
(2) the period of three months from the time it receives a properly completed application.

SUP 10B.11.10

01/04/2013

  • G
In any other case it is the period of three months from the time it receives a properly completed application.

SUP 10B.11.11

01/04/2013

  • G
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 PRA candidate's suitability to be approved to undertake a PRA controlled function will be called into question. A person who provides information to the PRA 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.

SUP 10B.11.12

01/04/2013

  • G
The PRA will as soon as practicable notify the FCA of the receipt of an application to the PRA. There is no need for the firm to copy the application to the FCA.

SUP 10B.11.13

01/04/2013

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

SUP 10B.11.14

01/04/2013

  • G
The FCA may also ask the firm for more information about the PRA candidate. If it does this, the period in which the PRA must determine a completed application is extended in the same way as it is if the PRA asks for the information.

SUP 10B.11.15

01/04/2013

  • G
The PRA may only grant an application (and the FCA may only give its consent) if it is satisfied that the PRA candidate is a fit and proper person to perform the PRA controlled function stated in the application form. Responsibility lies with the firm making the application to satisfy the PRA and the FCA that the PRA candidate is fit and proper to perform the PRA controlled function applied for.

SUP 10B.11.16

01/04/2013

  • G
For further guidance on criteria for assessing whether a PRA candidate is fit and proper, see FIT.

Decisions on applications

SUP 10B.11.17

01/04/2013

  • G
The PRA must either grant the application or, if it proposes not to grant an application, issue a warning notice.

SUP 10B.11.18

01/04/2013

  • G
Whenever it grants an application, the PRA will confirm this in writing to all interested parties.

SUP 10B.11.19

01/04/2013

  • G
If the PRA proposes to refuse an application in relation to one or more PRA controlled functions, it must follow the procedures for issuing warning and decision notices.

Withdrawing an application for approval

SUP 10B.11.20

01/04/2013

  • R
A firm applying to withdraw an application for approval must notify the PRA, using Form B, in the form set out in SUP 10B Annex 5R.

SUP 10B.11.21

01/04/2013

  • G
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 PRA candidate and the person by whom the PRA candidate is or would have been employed, if this is not the firm making the application.

SUP 10B.11.22

01/04/2013

  • G
The PRA will as soon as practicable notify the FCA of the receipt of a notice of withdrawal. There is no need for the firm to copy the notice to the FCA.

SUP 10B.12

01/04/2013

Changes to a PRA-approved person's details

Moving within a firm

SUP 10B.12.1

01/04/2013

  • G
A PRA-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 PRA controlled functions different from those for which approval has already been granted, then an application must be made to the PRA for approval for the person to perform those PRA controlled functions. The firm must take reasonable care to ensure that an individual does not begin performing a PRA controlled function until the PRA has granted approved person status to that individual in respect of that PRA controlled function. Similarly, a firm must get the PRA's approval if a person is to start performing a PRA controlled function in relation to that firm when he already has the FCA's approval to perform an FCA controlled function in relation to that firm.

SUP 10B.12.2

01/04/2013

  • G
If an FCA-approved person or a PRA-approved person is ceasing to perform FCA controlled functions or PRA controlled functions, as well as applying for approval in respect of PRA controlled functions, SUP 10B.12.4 D generally applies. Further details can be found in SUP 10B Annex 2G.

SUP 10B.12.3

01/04/2013

  • G
If a person is to perform a PRA controlled function for a firm for which he already performs a PRA controlled function or FCA controlled function as an approved person but he is not at the same time ceasing to perform an FCA controlled function or PRA controlled function, a firm should use Form A rather than Form E. It is not mandatory to complete all parts of the form. See the notes relevant to each form for full details.

SUP 10B.12.4

01/04/2013

  • D
(1) 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 PRA controlled functions within the same firm or group.
(2) A firm must not use Form E if the approved person has never before been approved to perform a significant influence function for any firm or has not been the subject of a current approved person approval from the FCA or PRA to perform a significant influence function in relation to any firm for more than six months.
(3) A firm must not use Form E if a notification has been made or should be made under SUP 10B.12.18 R (Changes in fitness to be notified under Form D) or SUP 10A.14.17 R (the equivalent FCA rule) in relation to any controlled functions that, that person is ceasing to perform (as referred to in (1)) or any controlled function that he is continuing to perform in relation to that firm or a firm in the same group.

SUP 10B.12.5

01/04/2013

  • G
SUP 10B.14.1 D explains how applications should be submitted.

SUP 10B.12.6

01/04/2013

  • R
If a person is performing the non-executive director function in relation to a firm, the firm must notify the PRA as soon as possible if that person begins to perform or ceases to perform any of the following functions:
(1) the function of acting in the capacity of the chairman of the governing body of the firm; or
(2) the function of acting as a non-executive director who has been appointed by the non-executive directors to act as the senior independent director of that firm; or
(3) the function of acting in the capacity of the chairman of the governing body risk committee of the firm (if there is such a committee). For these purposes, the governing body risk committee means the committee described in SYSC 21.1.5 G; or
(4) the function of acting in the capacity of the chairman of the audit committee of the governing body of the firm (if there is such a committee); or
(5) the function of acting in the capacity of the chairman of the remuneration committee of the governing body of the firm (if there is such a committee).
Any such notification must be e-mailed to the PRA'sapproved persons mailbox at PRA-ApprovedPersons@bankofengland.co.uk

SUP 10B.12.7

01/04/2013

  • G
So for example if a non-executive director moves from being chair of the audit committee to chair of the risk committee or adds the role of chair of the audit committee to his existing role as chair of the risk committee he does not require approval from the PRA. However, the firm should notify the PRA of that change as soon as possible. If a person stops performing the non-executive director function altogether, SUP 10B.12.4 D or SUP 10B.12.10 R apply instead.

Moving between firms

SUP 10B.12.8

01/04/2013

  • G
If it is proposed that a PRA-approved person will no longer be performing a PRA controlled function under an arrangement entered into by one firm or one of its contractors, but will be performing the same or a different PRA 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 PRA controlled function by that person.

SUP 10B.12.9

01/04/2013

  • G
In certain circumstances, when the PRA 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.

Ceasing to perform a PRA controlled function

SUP 10B.12.10

01/04/2013

  • R
A firm must submit to the PRA a completed Form C, in the form set out in SUP 10B Annex 6R no later than seven business days after a PRA-approved person ceases to perform a PRA controlled function. This does not apply if the firm has already notified the PRA of the proposal to do that using Form E in accordance with this chapter or has notified the FCA of the proposal to do using the FCA's Form E in accordance with SUP 10A of the FCA's Handbook.

SUP 10B.12.11

01/04/2013

  • G
SUP 10B.14.1 D explains how notifications should be submitted.

SUP 10B.12.12

01/04/2013

  • R
(1) A firm must notify the PRA 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 a PRA-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 PRA-approved person from its employment; or
(b) relates to the resignation by the PRA-approved person while under investigation by the firm, the PRA or any other regulatory body; or
(c) otherwise reasonably suggests that it may affect the PRA's assessment of the PRA-approved person's fitness and propriety.

SUP 10B.12.13

01/04/2013

  • G
Notification under SUP 10B.12.12 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 PRA in due course of the reason. This could be done using Form D, if appropriate.

SUP 10B.12.14

01/04/2013

  • G
A firm is responsible for notifying the PRA if any PRA-approved person has ceased to perform a PRA controlled function under an arrangement entered into by its appointed representative or former appointed representative.

SUP 10B.12.15

01/04/2013

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

Changes to a PRA-approved person's personal details

SUP 10B.12.16

01/04/2013

  • R
If a PRA-approved person's title, name or national insurance number changes, the firm for which the person performs a PRA controlled function must notify the PRA on Form D, in the form set out in SUP 10B Annex 7R, of that change within seven business days of the firm becoming aware of the matter.

SUP 10B.12.17

01/04/2013

  • G
The duty to notify in SUP 10B.12.16 R does not apply to changes to a PRA-approved person's private address.

SUP 10B.12.18

01/04/2013

  • R
If a firm becomes aware of information which would reasonably be material to the assessment of a PRA-approved person's, or a PRA candidate's, fitness and propriety (see FIT), it must inform the PRA on Form D, or (if it is more practical to do so and with the prior agreement of the PRA) by fax or e-mail, as soon as practicable.

SUP 10B.12.19

01/04/2013

  • G
SUP 10B.14.2 R applies to the submission of Form D.

SUP 10B.12.20

01/04/2013

  • G
Failing to disclose relevant information to the PRA may be a criminal offence under section 398 of the Act.

SUP 10B.12.21

01/04/2013

  • G
The duty to notify in SUP 10B.12.18 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.

SUP 10B.12.22

01/04/2013

  • R
(1) If, in relation to a firm which has completed the relevant Form A (SUP 10B Annex 4D), any of the details relating to arrangements and PRA controlled functions are to change, the firm must notify the PRA on Form D (SUP 10B Annex 7R).
(2) The notification under (1) must be made as soon as reasonably practicable after the firm becomes aware of the proposed change.
(3) This also applies in relation to a PRA controlled function for which an application was made using Form E.
(4) This rule also applies to a firm in respect of an approved person, to whom the grandfathering arrangements relating to the coming into force of the Act applied as if the firm had completed the relevant Form A for that person.

SUP 10B.13

01/04/2013

References and accurate information

References

SUP 10B.13.1

01/04/2013

  • R
(1) If a firm (A):
(a) is considering appointing a person to perform any PRA controlled function;
(b) requests another firm (B), as a current or former 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 10B 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 and data reports on stakeholder pensions) applies to B, the persistency of any life policies sold by that person.

SUP 10B.13.2

01/04/2013

  • G
The requirement in SUP 10B.13.1R (1) for firm (B) to give to firm (A) all relevant information of which it is aware concerning a person firm A is considering appointing to perform any of the PRA 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.

SUP 10B.13.3

01/04/2013

  • G
A firm supplying a reference in accordance with SUP 10B.13.1 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.

The need for complete and accurate information

SUP 10B.13.4

01/04/2013

  • G
The obligations to supply information to:
(1) the PRA under either SUP 10B.12.10 R or SUP 10B.12.12 R; or
(2) another firm under SUP 10B.13.1 R;
apply notwithstanding any agreement (for example a 'COT 3' Agreement settled by the Advisory, Conciliation and Arbitration Service (ACAS)) or any other arrangements entered into by a firm and an employee upon termination of the employee's employment. A firm should not enter into any such arrangements or agreements that could conflict with its obligations under this section.

SUP 10B.13.5

01/04/2013

  • G
Failing to disclose relevant information to the PRA may be a criminal offence under section 398 of the Act.

SUP 10B.14

01/04/2013

How to apply for approval and give notifications

SUP 10B.14.1

19/06/2014

  • D
(1) This direction applies to an application under Form A or Form E.
(2) An application by a firm other than a credit union must be made by submitting the Form online at http://fshandbook.info/FS/html/PRA/SUP/10B/14 using the form specified on the FCA's and PRA's ONA system.
(3) An application by a credit union must be made using the form in SUP 10B Annex 4D or SUP 10B Annex 8D and must be submitted in the way set out in Notifications 7 (Form and method of notification) of the PRA Rulebook.
(4) Where a firm is obliged to submit an application online under (2), if the information technology systems used by the PRA 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 10B Annex 4D or SUP 10B Annex 8D and submit it in the way set out in Notifications 7 (Form and method of notification) of the PRA Rulebook.

SUP 10B.14.2

01/04/2013

  • R
(1) This rule applies to a notification under Form C or Form D.
(2) A notification must be made in accordance with SUP 10B.14.1 D except that the annexes to SUP 10B in which the forms are to be found are SUP 10B Annex 6R or SUP 10B Annex 7R rather than the Annexes mentioned in SUP 10B.14.1 D.

SUP 10B.14.3

19/06/2014

  • G
If the information technology systems used by the PRA fail and online submission is unavailable for 24 hours or more, the FCA and PRA will endeavour to publish a notice on their websites confirming that online submission is unavailable and that the alternative methods of submission set out in SUP 10B.14.1D (4) andNotifications 7 (Form and method of notification) of the PRA Rulebook. should be used.

SUP 10B.14.4

02/04/2015

  • G
Where SUP 10B.14.1D (4) or the equivalent situation under SUP 10B.14.2 R applies to a firm, General Provisions 2.2 of the PRA Rulebook does not apply.

SUP 10B Annex 1

01/04/2013

[Not used]

01/04/2013

  • R
 

SUP 10B Annex 2

01/04/2013

Approved person regime: summary of forms and their use for applications for approval to perform a PRA-controlled function

01/04/2013

  • G
Function Form Submission
person about to perform a PRA controlled function if he has never been approved by the FCA or PRA before. A Submitted by the firm making the application before activities requiring approval commence.
Candidate is to perform a PRA controlled function and either has current approval to perform an FCA significant-influence function or a PRA controlled function or has had such an approval within the previous six months. Shortened Form
A
if conditions met
Submitted by the firm making the application before activities requiring approval commence.
Candidate ceased to be an approved person more than six months ago. A Submitted by the firm making the application before activities requiring approval commence.
Candidate is seeking to perform a significant-influence function for the first time or ceased to have approval from the FCA or PRA to perform such a function more than six months ago. A Submitted by the firm making the application before activities requiring approval commence.
Firm applying for an outstanding application to perform a PRA controlled function to be withdrawn. B Submitted by the firm: signed by all interested parties.
Person ceasing to perform a PRA controlled function. C (unless it should be notified under Form E) Submitted by the firm within seven business days of approved person ceasing to perform controlled function(s).
If a PRA-approved person's title, name or national insurance number changes, or there is information which may be material to the continuing assessment of an approved person's fitness and propriety. D Submitted by firm within seven business days of the firm becoming aware of the matter.
Person remaining with the same firm but changing PRA controlled functions. E Submitted by firm to the PRA before changes take place.
Person remaining with the same firm but giving up an FCA significant-influence function and taking up a PRA controlled function. E Submitted by firm to the PRA before changes take place.
Person remaining with the same firm in the circumstances described in SUP 10B.7.4 R (giving up a PRA controlled function triggering need for FCA approval). E Submitted by firm to the FCA in hard copy in advance of giving up the PRA governing function.
Person remaining with the same firm but giving up a PRA controlled function and taking up an FCA significant-influence function. E Submitted by firm to the FCA before changes take place (see the FCA's Handbook).
Person being appointed to a PRA governing function role who is about to start a function that would otherwise have come within the apportionment and oversight function. A or E as appropriate The form should mention that the person is to perform what would otherwise have been the apportionment and oversight function. See SUP 10A.11.10 G (table in the FCA's Handbook of examples of how the need for dual FCA and PRA approval in relation to PRA-authorised persons is reduced).
Person moving from one PRA governing function role to another while continuing to perform a function that would otherwise have come within the apportionment and oversight function. See previous row See previous row.

SUP 10B Annex 3

01/04/2013

[Not used]

01/04/2013

[Not used]

SUP 10B Annex 4

01/04/2013

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

01/04/2013

  • D
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 10B.12

SUP 10B Annex 5

01/04/2013

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

01/04/2013

  • D
This annex consists only of one or more forms. Forms are to be found through the following address: Supervision forms - SUP 10B Annex 5

SUP 10B Annex 6

01/04/2013

Form C: Notice of ceasing to perform controlled functions

01/04/2013

  • R
This annex consists of only one or more forms. Forms can be completed online now by visiting: http://www.fca.org.uk/firms/about-authorisation

The forms are also to be found through the following address: Supervision forms - SUP 10B Annex 6

SUP 10B Annex 7

01/04/2013

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

01/04/2013

  • R
This annex consists of only one or more forms. Forms can be completed online now by visiting: http://www.fca.org.uk/firms/about-authorisation

The forms are also to be found through the following address: Supervision forms - SUP 10B Annex 7

SUP 10B Annex 8

01/04/2013

Form E: Internal transfer of an approved person

01/04/2013

  • G
This annex consists only of one or more forms. Forms are to be found through the following address: Supervision forms - SUP 10B Annex 8

SUP 16

Reporting requirements

SUP 16.1

01/12/2004

Application

SUP 16.1.1

19/01/2015

  • R
This chapter applies to every firm and qualifying parent undertakingwithin a category listed in column (2) of the table in SUP 16.1.3 R and in accordance with column (3) of that table.

SUP 16.1.2

31/12/2014

  • G
Future version
01/01/2016
The only categories of firm to which no section of this chapter applies are:
(1) an ICVC;
(2) an incoming EEA firm or incoming Treaty firm, unless it is:
(a) a firm of a type listed in SUP 16.1.3 R as a type of firm to which SUP 16.6, SUP 16.7A, SUP 16.9 ,SUP 16.12, or SUP 16.14 applies; or
(b) an insurer with permission to effect or carry out life policies;

SUP 16.1.3

03/08/2015

  • R
Future version
01/01/2016

Application of different sections of SUP 16 (excluding SUP 16.13, SUP 16.15, SUP 16.16 and SUP 16.17)

(1) Section(s) (2) Categories of firm to which section applies (3) Applicable rules and guidance
SUP 16.1 , SUP 16.2 and SUP 16.3 All categories of firm except: Entire sections
  (a) an ICVC;  
  (b) an incoming EEA firm or incoming Treaty firm , which is not:  
    (i) a firm of a type to which SUP 16.6 or SUP 16.12 applies; or  
    (ii) an insurer with permission to effect or carry out life policies; or  
    (iii) a firm with permission to establish, operate or wind up a personal pension scheme or a stakeholder pension scheme;  
  (c) a UCITS qualifier.  
SUP 16.6 Bank SUP 16.6.4 R to SUP 16.6.5 R
  Depositary of an ICVC SUP 16.6.6 R to SUP 16.6.9 G
  Trustee of an AUT SUP 16.6.6 R to SUP 16.6.9 G
  Depositary of an ACS SUP 16.6.6 R to SUP 16.6.9 G
SUP 16.7A A firm subject to the requirement in SUP 16.7A.3 R or SUP 16.7A.5 R Sections as relevant
SUP 16.8 Insurer with permission to effect or carry out life policies , unless it is a non-directive friendly society Entire section
  Firm with permission to establish, operate or wind up a personal pension scheme or a stakeholder pension scheme Entire section
SUP 16.9 Firm with permission to advise on investments ; arrange (bring about) deals in investments ; make arrangements with a view to transactions in investments ; or arrange safeguarding and administration of assets Entire section
     
SUP 16.11 (1) A firm, other than a managing agent, which is:  
    (a) a home finance provider; or Entire section
    (b) an insurer; or Entire section
    (c) the operator of a regulated collective investment scheme or an investment trust savings scheme; or Entire section
    (d) a person who issues or manages the relevant assets of the issuer of a structured capital-at-risk product; or Entire section
    (e) a firm with permission to enter into a regulated credit agreement as lender in respect of high-cost short-term credit or home credit loan agreements; or Entire section
  (2) a firm in whom the rights and obligations of the lender under a regulated mortgage contract are vested. The provisions governing performance data reports in SUP 16.11 and SUP 16 Annex 21
SUP 16.12 A firm undertaking the regulated activities as listed in SUP 16.12.4 R, unless exempted in SUP 16.12.1 G Sections as relevant to regulated activities as listed in SUP 16.12.4 R
SUP 16.14 A CASS large firm and a CASS medium firm Entire section
SUP 16.18 A full-scope UK AIFM and a small authorised UK AIFM SUP 16.8.3 R
SUP 16.20 An IFPRU 730k firm and a qualifying parent undertaking that is required to send a recovery plan, a group recovery plan or information for a resolution plan to the FCA. Entire Section
Note 1[deleted]
Note 2 = The application of SUP 16.13 is set out under SUP 16.13.1 G; the application of SUP 16.15 is set out under SUP 16.15.1 G; the application of SUP 16.16 is set out SUP 16.16.1 R and SUP 16.16.2 R and the application of SUP 16.17 is set out in SUP 16.17.3 R and SUP 16.17.4 R.
Note 3 = The application of SUP 16.18 for the types of AIFMs specified in SUP 16.1.1C G is set out in SUP 16.18.2 G.

SUP 16.1.4

01/04/2013

  • G
(1) This chapter contains requirements to report to the appropriate regulator on a regular basis. These requirements include reports relating to a firm's financial condition, and to its compliance with other rules and requirements which apply to the firm. Where the relevant requirements are set out in another section of the Handbook, this chapter contains cross references. An example of this is financial reporting for insurers and friendly societies.
(2) Where such requirements already apply to a firm under legislation other than the Act, they are not referred to in this chapter. An example of this is reporting to the appropriate regulator by building societies under those parts of the Building Societies Act 1986 which have not been repealed.
(3) Requirements for individual firms reflect:
(a) the category of firm;
(b) the nature of business carried on;
(c) whether a firm has its registered office (or if it does not have a registered office, its head office) in the United Kingdom;
(d) whether a firm is an incoming EEA firm or incoming Treaty firm; and
(e) the regulated activities the firm undertakes.

SUP 16.1.7

01/04/2013

  • G
Where a PRA-authorised person is required to notify or provide any information to (a) the appropriate regulator by a PRA Handbook provision and (b) the FCA by the equivalent provision in the FCA Handbook, the PRA-authorised person is expected to comply with both provisions.

SUP 16.2

01/12/2004

Purpose

SUP 16.2.1A

19/06/2014

  • G
(1)  In order to discharge its functions under the Act, the PRA needs timely and accurate information about firms. The provision of this information on a regular basis enables the PRA to build up over time a picture of firms' circumstances and behaviour.
(2) A firm is required to deal with the PRA in an open, cooperative and timely way, and to appropriately disclose to the PRA anything relating to the firm of which the PRA would reasonably expect notice. The reporting requirements are part of the PRA's approach to amplifying these requirements by setting out in more detail the information that the PRA requires. They supplement the rules relating to information gathering and notifications to the PRA. The reports required under these rules help the PRA to monitor firms' compliance with the requirement to maintain adequate financial resources, and with other requirements and standards under the regulatory system.

SUP 16.3

01/12/2004

General provisions on reporting

Application

SUP 16.3.1

01/04/2013

  • G
Future version
01/01/2016
The effect of SUP 16.1.1 R is that this section applies to every firm except:
(1) an ICVC;
(2) an incoming EEA firm or incoming Treaty firm, which is not:
(a) a firm of a type listed in SUP 16.1.3 R as a firm to which section SUP 16.6 or SUP 16.12 applies;
(b) an insurer with permission to effect or carry out life policies;

Structure of the chapter

SUP 16.3.2A

03/08/2015

  • G
Future version
01/01/2016
This chapter has been split into the following sections, covering:
(1) [deleted];
(2) [deleted];
(3) compliance reports (SUP 16.6);
(4) persistency reports (SUP 16.8);
(5) annual appointed representatives reports (SUP 16.9);
(6) product sales data reporting (SUP 16.11);
(7) integrated regulatory reporting (SUP 16.12);
(8) reporting under the Payment Services Regulations (SUP 16.13);
(9) client money and asset return (SUP 16.14);
(10) reporting under the Electronic Money Regulations (SUP 16.15).
(11) prudent valuation reporting (SUP 16.16);
(12) remuneration reporting (SUP 16.17); and
(13) AIFMD reporting (SUP 16.18).

SUP 16.3.3

01/04/2013

  • G
The annual controllers, annual close links, persistency and annual appointed representatives reports sections are the same for all categories of firm to which they apply.

SUP 16.3.4

01/04/2013

  • G
The compliance section isset out by category of firm, with detailed requirements set out in tables giving:
(1) a brief description of each report;
(2) the frequency with which the report is required; and
(3) the due date for submission of the report.

SUP 16.3.5

01/04/2013

  • G
Further requirements about the reports, such as form and content, are set out in the sections for each category of firm, where this is appropriate. In many cases, however, it is more appropriate to provide this information by means of a separate annex; in these cases the relevant section refers to the annex.

How to submit reports

SUP 16.3.6

01/04/2013

  • R
A periodic report required to be submitted under this chapter, or under any other rule, must be submitted in writing in accordance with SUP 16.3.7 R to SUP 16.3.10 G, unless:
(1) a contrary intention appears; or
(2) the report is required under the listing rules.

SUP 16.3.7

01/04/2013

  • R
A report or data item must:
(1) give the firm reference number (or all the firm reference numbers in those cases where a report is submitted on behalf of a number of firms,as set out in SUP 16.3.25 G); and
(2) if submitted in paper form, be submitted with the cover sheet contained in SUP 16 Annex 13 R fully completed.

SUP 16.3.8

01/04/2013

  • R
A written report must be delivered to the appropriate regulator by one of the methods listed in SUP 16.3.9 R.

SUP 16.3.9

01/04/2013

  • R

Method of submission of reports (see SUP 16.3.8 R)

Method of delivery
1. Post to the published address of the FCA for postal submission of reports
2. Leaving the report marked for the attention of "Central Reporting" at the published address of the FCA for hand delivery of reports and obtaining a dated receipt
3. Electronic mail or fax to the published e-mail address or fax number of the FCA's Central Reporting team
4. Online submission via the appropriate systems accessible from the appropriate regulator's website

SUP 16.3.10

01/04/2013

  • G
(1) The current published address of the FCA for postal submission of reports is:
Central Reporting
The Financial ConductAuthority
PO BOX 35747
London E14 5WP
(2) The current published address of the FCA for hand delivery of reports is:
(a) 
Central Reporting
The Financial ConductAuthority
25 The North Colonnade
Canary Wharf
London E14 5HS

if the firm's usual supervisory contact at the appropriate regulator is based in London, or:
(b) 
The Financial ConductAuthority
Quayside House
127 Fountainbridge
Edinburgh EH3 8DJ

if the firm's usual supervisory contact at the FCA is based in Edinburgh.
(3)  The current published email address and fax number for the FCA's Central Reporting team is regulatory.reports@fca.org.uk and 020 7066 3905. The Central Reporting team does not handle general correspondence between firms and the appropriate regulator . Accordingly, firms should not make submissions to the Central Reporting team's email address or fax number other than as directed in SUP 16.3.8 R.

Complete reporting

SUP 16.3.11

01/04/2013

  • R
A firm must submit reports required under this chapter to the appropriate regulator containing all the information required.

SUP 16.3.12

01/04/2013

  • G
SUP 15.6 refers to and contains requirements regarding the steps that firms must take to ensure that information provided to the appropriate regulator is accurate and complete. Those requirements apply to reports required to be submitted under this chapter.

Timely reporting

SUP 16.3.13

01/04/2013

  • R
(1) A firm must submit a report required by this chapter in the frequency, and so as to be received by the appropriate regulator no later than the due date, specified for that report.
(2) If the due date for submission of a report required by this chapter falls on a day which is not a business day, the report must be submitted so as to be received by the appropriate regulator no later than the first business day after the due date.
(3) If the due date for submission of a report required by this chapter is a set period of time after the quarter end, the quarter ends will be the following dates, unless another rule or the reporting form states otherwise:
(b) 3 months after the firm's accounting reference date;
(c) 6 months after the firm's accounting reference date; and
(d) 9 months after the firm's accounting reference date.
(4) If the due date for submission of a report required by this chapter is a set period of time after the end of a half-year, a quarter, or a month, the dates will be determined by (a) or (b) below except where otherwise indicated:
(b) monthly, 3 monthly or 6 months after the firm's accounting reference date, as the case may be.

Failure to submit reports

SUP 16.3.14B

01/10/2015

  • G

Failure to submit a report in accordance with the rules in, or referred to in this chapter or the provisions of relevant legislation may lead to the imposition of a financial penalty and other disciplinary sanctions. A firm may be subject to reporting requirements under relevant legislation other than the Act, not referred to in this chapter. An example of this is reporting to the appropriate regulator by building societies under those parts of the Building Societies Act 1986 which have not been repealed (see SUP 16.1.4 G).

SUP 16.3.15

01/04/2013

  • G
The appropriate regulator may from time to time send reminders to firms when reports are overdue. Firms should not, however, assume that the appropriate regulator has received a report merely because they have not received a reminder.

SUP 16.3.16

01/04/2013

  • G
The firm is responsible for ensuring delivery of the required report at the by the due date. If a report is received by the appropriate regulator after the due date and the firm believes its delivery arrangements were adequate, it may be required to provide proof of those arrangements. Examples of such proof would be:
(1) "proof of posting" receipts from a UK post office or overseas equivalent which demonstrates that the report was posted early enough to allow delivery by the due date in accordance with the delivery service standards prescribed by the relevant postal authority; or
(2) recorded postal delivery receipts showing delivery on the required day; or
(3) records of a courier service provider showing delivery on the required day.

Change of accounting reference date

SUP 16.3.17A

02/04/2015

  • R
(1)  A firm must notify the appropriate regulator if it changes its accounting reference date.
(2) When a firm extends its accounting period, it must make the notification in (1) before the previous accounting reference date.
(3) When a firm shortens its accounting period, it must make the notification in (1) before the new accounting reference date.
(4) Notifications 5.3A and 5.5 (Core Information Requirements) apply to any notification made under (1).

SUP 16.3.18

01/04/2013

  • G
SUP 16.2.1 G emphasises the importance to the appropriate regulator of timely and accurate information. The extension of a firm's accounting period to more than 15 months may hinder the timely provision of relevant and important information to the appropriate regulator . This is because many due dates for reporting to the appropriate regulator are linked to firms'accounting reference dates. Indeed, for some categories of firm, the only reports required by the appropriate regulator have due dates for submission which are linked to the firm'saccounting reference date.If the extension of a firm's accounting period appears likely to impair the effectiveness of the appropriate regulator's supervisory work, the appropriate regulator may take action to ensure that it continues to receive the information it requires on a timely basis. This may include the use of any of the tools of supervision set out in SUP 1.4.5 G.

SUP 16.3.19

01/04/2013

  • G
If more than one firm in a group intends to change its accounting reference date at the same time, a single notification may be given to the appropriate regulator , as described in SUP 15.7.8 G.

Notifications regarding financial information reporting under the EU CRR

SUP 16.3.19A

01/01/2014

  • R
(1)  A firm must notify the PRA if it is required to report financial information in accordance with Article 99 (2) of the EU CRR.

[Note: Firms may use the "FINREP notification forms" that reside on this page of the Bank's website to make a notification according to SUP16.3.19A or B]
(2) A firm must notify the PRA when it ceases to report financial information in accordance with Article 99 (2) of the EU CRR.

SUP 16.3.19B

01/01/2014

  • R
A firm must notify the PRA if it adjusts its reporting reference dates for financial information under Article 99 of the EU CRR from the calendar year to its accounting year-end.

Service of Notices Regulations

SUP 16.3.22

01/04/2013

  • G
The Financial Services and Markets Act 2000 (Service of Notices) Regulations 2001 (SI 2001/1420) contain provisions relating to the service of documents on the appropriate regulator . They do not apply to reports required under SUP 16, because of the specific rules in this section.

Reports from groups

SUP 16.3.25

01/04/2013

  • G
Future version
01/01/2016
If this chapter requires the submission of a report or data item covering a group, a single report or data item may be submitted, and so satisfy the requirements of all firms in the group. Such a report or data item should contain the information required from all of them, meet all relevant due dates and indicate all the firms on whose behalf it is submitted; if necessary a separate covering sheet should list the firms on whose behalf a report or data item is submitted. Nevertheless, the requirement to provide a report or data item, and the responsibility for the report or data item, remains with each firm in the group. However, reporting requirements that apply to a firm, by reason of the firm being a member of a financial conglomerate, are imposed on only one member of the financial conglomerate (see, for example, SUP 16.12.32 R ).

SUP 16.3.26

03/08/2015

  • G

[deleted]

(1) [deleted]
(2) [deleted]
(3) [deleted]
(4) [deleted]
(5) [deleted]
(6) [deleted]

SUP 16.3.26A

03/08/2015

  • G
Future version
01/01/2016

Examples of reports covering a group are:
(1) the compliance reports required from banks under SUP 16.6.4R;
(2) [deleted];
(3) [deleted];
(4) consolidated financial reports required from banks under SUP 16.12.5R;
(5) consolidated reporting statements required from securities and futures firms under SUP 16.12.11R;
(6) Reporting in relation to defined liquidity groups under SUP 16.12.