Prudential Regulation Authority Rulebook

1.1

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

1. (1) a CRR firm; or
2. (2) a credit union.

1.2

In this Part, the following definitions shall apply:

candidate

means a person in respect of whom a firm has made a pending application.

commencement date

means 7 March 2016.

continued approval

means approval to perform a PRA senior management function under section 59 of FSMA, granted pursuant to a grandfathering notification.

equivalent function

means a PRA senior management function or FCA-designated senior management function that is specified in 6 as equivalent for the purposes of articles 2(3)(b) and 11(c) of the Transitional Order, to a pre-implementation controlled function.

FCA controlled function

means a controlled function specified by the FCA under section 59 of FSMA.

FCA-designated senior management function

means any of the functions specified in column 3 (FCA-designated senior management functions) of the table set out in 6.

grandfathering notification

means a notice required to be sent to the PRA under article 2(1) or 11(b) of the Transitional Order, including any update to such a notice.

management responsibilities map

has the meaning given in Allocation of Responsibilities 6.

pending application

means an application for approval under section 60 of FSMA which:

1. (1) has been received by the FCA or PRA from the firm on or before the commencement date, and
2. (2) has not been determined or withdrawn.

PRA senior management function

means a function specified as a controlled function in Senior Management Functions 2 in relation to the carrying on of a regulated activity by a firm.

pre-implementation controlled function

means any of the controlled functions listed in column 1 of the table in 6.

statement of responsibilities

means a statement pursuant to article 2(3)(c) or 11(d) of the Transitional Order setting out the aspects of the affairs of the firm which it is intended that each relevant person will be responsible for managing in performing the notified functions.

Transitional Order

means the Financial Services (Banking Reform) Act 2013 (Transitional and Savings Provisions) Order 2015 (SI 2015/492).

2.1

The PRA directs that a firm must make a grandfathering notification using Form K before 8 February 2016.

2.2

The PRA directs that the notice required by article 6(1) of the Transitional Order must be provided to the PRA using Form K.

2.3

The PRA directs that the notice required by article 11(b) of the Transitional Order in respect of a candidate for whom continued approval is sought must be provided to the PRA in Form K as part of a grandfathering notification.

3.1

A firm must ensure that the grandfathering notification sets out, in respect of each approved person or candidate:

1. (1) each of the pre-implementation controlled functions for which the person is approved, or (in the case of a candidate) has a pending application, in relation to the firm;
2. (2) each PRA senior management function to be performed by the person on and after the commencement date in relation to the firm; and
3. (3) each FCA-designated senior management function (if any) to be performed by the person on and after the commencement date in relation to the firm.

3.2

The PRA directs that a firm must not specify in a grandfathering notification a PRA senior management function or an FCA-designated senior management function for a person which is not an equivalent function in the table in 6 or the table in FCA SUP TP 6.2.7 in relation to:

1. (1) (for an approved person) any pre-implementation controlled functions for which the person has approval in relation to the firm; or
2. (2) (for a candidate) any pre-implementation controlled functions in respect of which there is a pending application.

3.3

The PRA directs that:

1. (1) a statement of responsibilities must be submitted with the grandfathering notification in respect of each approved person or candidate for whom continued approval is sought; and
2. (2) the firm must submit a management responsibilities map, showing the role of each approved person or candidate as at the commencement date, including the person(s) subject to the grandfathering notification.

3.4

The PRA directs that a firm must list in the grandfathering notification each approved person or candidate who, on the commencement date, will be acting in the capacity of a non-executive director but who will not be performing a PRA senior management function or FCA designated senior management function.

4.1

The PRA directs that, save as required by 4.2 :

1. (1) A firm other than a credit union must make any applications, notifications or submissions, including updates, required by this Part using the ONA system; and
2. (2) a credit union must make any applications, notifications or submissions, including updates, required by this Part:
1. (a) using the ONA system; or
2. (b) in the manner set out in Notifications 7.

4.2

If, under any direction or rule in this Chapter,

1. (1) a firm is required to make an application, notification or submission online; and
2. (2) 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 may submit the specified form in accordance with Notifications 7 (Form and method of notification).

5.1

The PRA directs that if, before the commencement date, there has been a significant change to the matters covered by any statement of responsibilities or the management responsibilities map provided pursuant to 3.3, the firm must provide a revised version to the PRA in accordance with the procedure in 4.

6.1

The PRA senior management functions set out in column 2 of the table are specified as equivalent functions, in each case in relation to the pre-implementation controlled functions set out in the corresponding row of column 1 of the table below.

6.2

The FCA functions set out in column 3 of the table are specified as equivalent functions, in each case, in relation to the pre-implementation controlled functions set out in the corresponding row of column 1 of the table below.

Column 1	Column 2	Column 3
Pre-implementation PRA or FCA Controlled Function	PRA Senior Management Function	FCA-designated Senior Management Function
All firms apart from credit unions
Director (CF1) Partner (CF4) Director of unincorporated association (CF5)	Chief Finance function (SMF2) Chief Risk function (SMF4) Head of Internal Audit (SMF5) Head of Key Business Area (SMF6) Group Entity Senior Manager (SMF7)	Executive Director (SMF3)
Non-executive director (CF2)	Group Entity Senior Manager (SMF7) Chairman (SMF9) Chair of the Risk Committee (SMF10) Chair of the Audit Committee (SMF11) Chair of the Remuneration Committee (SMF12) Senior independent director (SMF14)	Chair of the Nominations Committee (SMF13)
Chief executive (CF3)	Chief executive (SMF1)
Systems and Controls (CF28)	Chief Finance function (SMF2) Chief Risk function (SMF4) Head of Internal Audit (SMF5)
Significant management (CF29)	Head of Key Business Area (SMF6) Group Entity Senior Manager (SMF7)	Overall responsibility (SMF18)
Credit unions
Column 1	Column 2	Column 3
PRA or FCA Controlled Function	PRA Senior Management Function	FCA-designated Senior Management Function
Director (CF1)	Credit Union Senior Manager (SMF8)	Executive Director (SMF3)
Non-executive director (CF2)	Credit Union Senior Manager (SMF8)	Chair of the Nominations Committee (SMF13)
Chief executive (CF3)	Credit Union Senior Manager (SMF8)

6.3

The PRA directs that a firm must not specify in the grandfathering notification that any person shall perform any combination of PRA senior management functions which is prohibited by any other provision of the PRA Rulebook or the FCA Handbook.

7.1

The PRA directs that a firm must not submit any application pursuant to Senior Managers Regime – Applications and Notifications 2, for a person to perform a PRA senior management function, before 1 January 2016.

7.2

The PRA directs that any application to perform a PRA senior management function which is made between 1 January 2016 and the day before the commencement date must:

1. (a) be made on the correct form as directed by Senior Managers Regime – Applications and Notifications 2 (as if those provisions were in force); and
2. (b) be submitted as directed by Senior Managers Regime – Applications and Notifications 7 (as if those provisions were in force).

7.3

An application to perform a PRA senior management function which is made between 1 January 2016 and the day before the commencement date is made on the basis that it is treated as being made on the commencement date.

8.1

Form K may be found here