AUTH 6
Approved
persons
AUTH 6.1
Application and purpose
- 01/12/2004
Application
AUTH 6.1.1
See Notes
This
chapter applies to:
(1) a person who
wishes to become an authorised
person under the Act and
who is, or is considering, applying to the FSA for Part
IV permission to carry on regulated
activities in the United
Kingdom;
(2) an EEA
firm, a Treaty
firm or a UCITS
qualifier that wishes to establish a branch or provide cross-border services into the United Kingdom using EEA rights, Treaty rights or UCITS Directive rights,
or apply for a top-up
permission;
(3) a candidate,
but only as a matter of general relevance.
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AUTH 6.1.2
See Notes
An EEA
firm, a Treaty
firm and UCITS
qualifier should refer to SUP 10.1 (Application)
for the special application of the approved
persons regime to firms which
are exercising their passport rights, Treaty rights or rights
as a UCITS qualifier.
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AUTH 6.1.3
See Notes
In this chapter, references to a 'firm' should be read as including an applicant
for Part IV permission,
or an EEA firm a Treaty firm or a UCITS qualifier, unless
the context otherwise requires.
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Purpose
AUTH 6.1.4
See Notes
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AUTH 6.2
Introduction
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AUTH 6.2.1
See Notes
A controlled
function is a function specified by the FSA which cannot be performed by a person under an arrangement entered into
by a firm,
or one of its contractors, until approval for this has been given by the FSA. Approval from the FSA is required for each controlled function to
be performed by a person.
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AUTH 6.2.2
See Notes
An approved
person is a person whose
performance of one or more controlled
functions has been approved by the FSA.
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AUTH 6.2.3
See Notes
A person who
performs a controlled function is
likely to be an individual, but in some cases the function may be performed
by others, such as a body
corporate. References to a person in
this chapter, and the rest of the Handbook,
should always be read as including these other entities.
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AUTH 6.2.4
See Notes
This regime covers persons who perform controlled functions in the capacity of an appointed representative or
an employee of such an appointed
representative. For further details on appointed representatives, see SUP
10.1.16 R and SUP 12 (Appointed Representatives).
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AUTH 6.2.5
See Notes
An introducer,
that is, in outline, a person,
other than an appointed
representative, who is appointed by a firm to effect introductions between customers and the firm but not to give advice on investments, will not,
for this reason alone, need to be an approved
person although certain obligations will apply (for example,
see COB 5 (Advising and selling).
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AUTH 6.2.6
See Notes
The controlled
functions which have been specified by the FSA are those functions which the FSA sees as key to the
operation of the provisions of Part V of the Act (Performance of Regulated Activities)
and the provisions made under Part V. Those provisions include:
(1) the Statements
of Principle and Code
of Practice for Approved Persons issued under section 64 of
the Act (Conduct:
statements and codes) (see APER);
and
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AUTH 6.2.7
See Notes
The purpose of the direct approval of persons who perform controlled functions is
to complement the regulation of the firm for
which the approved person performs
the function.
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AUTH 6.2.8
See Notes
The FSA may
grant an application by a firm for
a candidate to
perform one or more controlled
functions only if it is satisfied that he is fit and proper
to perform the function to which the application relates (see AUTH
6.3.11 G and AUTH
6.3.13 G).
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Controlled functions
AUTH 6.2.9
See Notes
The list of controlled functions which the FSA has specified in accordance
with section 59 of the Act (Approval
for particular arrangements) is set out in SUP 10 (Approved
persons) and in Form A, a copy of which is included in the application pack
for Part IV permission,
and which also may be found in SUP 10 Annex 4.
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AUTH 6.3
Procedures relating to approved persons
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AUTH 6.3.1
See Notes
An application for the FSA's approval under section 59 of the Act (Approval for particular
arrangements) must be made by completing Form A (included as part of the application
pack for Part IV permission)
in the manner directed by AUTH 3.9.3 D (2) to AUTH
3.9.3 D (5).
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AUTH 6.3.2
See Notes
In accordance with section 60 of the Act (Application for approval),
applications for approved
persons must be submitted by, or on behalf of, the firm, not by the candidate.
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AUTH 6.3.3
See Notes
A summary of FSA procedures is in AUTH
6 Annex 2 G.
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AUTH 6.3.4
See Notes
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Outsourcing to another firm
AUTH 6.3.5
See Notes
Where a firm has outsourced the performance of a controlled function, the
details of the outsourcing will determine who may apply for the candidate's approval.
Further details are in SUP 10.12.4 G.
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EEA firms and Treaty firms
AUTH 6.3.6
See Notes
The FSA encourages EEA firms and Treaty firms that wish
to carry on regulated activities in
the United Kingdom to
submit any necessary applications for approved
person status as early as possible. This will help to ensure
that there are no delays in the EEA
firm or Treaty
firm complying with applicable
provisions and commencing its regulated activities. For further details
on the application of the approved
persons regime to EEA
firms and Treaty
firms see SUP 10.1 (Application).
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Processing an application
AUTH 6.3.7
See Notes
The Act allows
the FSA three months from the time it
receives a properly completed application for approval under section 59 of
the Act (Approval
for particular arrangements) to consider it and come to a decision. However,
if the applicant for Part
IV permission is not yet an authorised person, approved person status will only be effective
from the date the applicant for Part
IV permission receives permission.
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AUTH 6.3.8
See Notes
Because approved person status is only effective from
the date Part IV Permission is
given, it is possible that this may take up to twelve months from the date
of application if the application for Part
IV permission is incomplete. See AUTH 3.9.30 G (How long will an application take?) for guidance on how long this process may take.
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AUTH 6.3.9
See Notes
Before making a decision either to approve
or to give a warning notice(see AUTH 8.3 (Statutory notices and other matters)), the FSA may request further
information about the candidate from
the applicant for Part
IV permission. If it does this, the three month approval period:
- 18/10/2001
AUTH 6.3.10
See Notes
The FSA may
grant an application only if it is satisfied that the candidate is a fit and proper person to perform the controlled function stated
in the application form.
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AUTH 6.3.11
See Notes
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Decisions on applications
AUTH 6.3.12
See Notes
See AUTH 8 (Determining applications)
for an overview of how applications for Part
IV permission and for approval of a candidate under section 59 of the Act (Approval for particular
arrangements) will be determined. AUTH 8 also includes a summary
of the decision making procedures which apply.
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AUTH 6.3.13
See Notes
Whenever it approves an application,
the FSA will
confirm this in writing to all interested
parties.
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AUTH 6.4
Further questions
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AUTH 6.4.1
See Notes
A list of frequently asked questions
and answers relating to new firms is
at AUTH
6 Annex 1 G.
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AUTH 6.4.2
See Notes
If the firm has questions unanswered by AUTH
6 Annex 1 G, it should contact
the FSA's Authorisation
and Approvals Department (Individual approvals team):
(1) telephone 020 7066 0019; or
(2) write to: Authorisation and Approvals
Department (Individual approvals team), The Financial Services Authority 25
The North Colonnade Canary Wharf London E14 5HS; or
(3) e-mail iva@fsa.gov.uk
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AUTH 6.5
Notified persons
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AUTH 6.5.1
See Notes
There are four positions which require
notification to the FSA but
not approval by the FSA.
These relate to overseas
firms (but excluding EEA
firms) with branches in
the United Kingdom.
These are:
(1) the firm's worldwide
chief executive where the person holding
the position is situated outside the United
Kingdom;
(2) the person,
if not the worldwide chief executive, within the overseas firm with a purely strategic responsibility
for UK operations;
(3) for a bank: the two or more persons who effectively direct its business
in accordance with IPRU(BANK) GN
3.3.1 R;
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AUTH 6.5.2
See Notes
For further details relating to those
positions which require notification only, see SUP 15.4 (Notified persons).
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AUTH 6 Annex 1
Approved Persons
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AUTH 6 Annex 1.1
See Notes
| Question: | Answer: | |
| Requirements of the regime | ||
| 1 | When is approval required? | The Act requires that approval be obtained before a person performs a controlled function. See section 59 of the Act (Approval for particular arrangements). |
| 2 | Can an individual be approved in advance of a firm becoming authorised? | No. The application will be coordinated to ensure that the approval of the individual coincides with the giving of permission to the firm. |
| 3 | Can a person be approved for more than one controlled function? | Yes. A firm will need to seek approval in respect of each controlled function a person is to perform. |
| 4 | Do the controlled functions apply to an incoming EEA firm that is providing cross border services into the United Kingdom? | No. The approved persons regime does not apply to cross border services. See SUP 10.1.6 R (Application). |
| 5 | May any activity be outsourced by a firm? | Yes. But if that activity constitutes a regulated activity the person to whom it is outsourced will itself need permission. |
| 6 | Can a significant influence function be outsourced? | It is a question of fact in each case who is performing a significant influence function. These functions are mostly described at a high level of responsibility, that is, for example, the director of a company or a partner of a partnership. The persons performing these functions cannot avoid their ultimate responsibility and therefore the need for approval approval. However, some of the significant influence functions may be performed by a person who is specifically brought in to do the job, for example the chief executive function (where it is to be performed by a body corporate) and the appointed actuary function actuarial and with-profits actuary functions. |
| 7 | Do Lloyd's underwriting agents still require registration with Lloyd's? | Yes. Approval for a controlled function is not sufficient. |
| Submitting an application | ||
| 8 | Who applies for approval? | It is the firm which applies for approval. See section 60 of the Act (Applications for approval). |
| 9 | What is the role of the candidate in the application process? | Before the firm submits Form A it must verify the information contained in it. As part of this verification, the form provides for the candidate to confirm the accuracy of the information given by the firm so far as it relates to him. |
| 10 | What is the "fit and proper" test for approval? | Section 61(1) of the Act (Determination of applications) provides that the FSA may grant an application only if it is satisfied that the candidate is a fit and proper person to perform the relevant function. In determining this question, the Act sets out the matters to which the FSA may have regard (section 61(2) of the Act) and the FSA has given guidance on this in FIT. |
| 11 | If a firm is unsure whether or not something may have an impact on an individual's fitness and propriety, should it be disclosed? | Yes, always. The non-disclosure of material facts is taken very seriously by the FSA, as it is seen as evidence of current dishonesty. Therefore, if in doubt, disclose. |
| 12 | Must all gaps in previous employment be explained? | Yes. |
| FSA procedures | ||
| 13 | Does the FSA verify the information provided to it? | Yes, as far as possible, information is verified. |
| 14 | Will the FSA handle information confidentially? | Yes. The FSA handles all information confidentially and is subject to the provisions of the Data Protection Act 1988. |
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AUTH 6 Annex 2
Approved Persons
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AUTH 6 Annex 2.1
See Notes
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