1. (1)

   1APER does not apply to FCA-approved persons of SMCR firms3. COCON applies instead. 3

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2. (2)

   However, APER applies to approved persons approved to perform a controlled function under SUP 10A.1.15R to SUP 10A.1.16BR (appointed representatives3) even if the appointed representative'sprincipal is an SMCR firm3.

The functions described in APER 1.1A.2R1are called accountable functions.

The relevance of MiFID to the Statements of Principle will depend on the extent to which the corresponding requirement imposed on firms under MiFID is reserved to a Home State regulator or has been disapplied under MiFID (see APER 2.1A.2R and FIT 1.2.4AG1. See also COBS 1 Annex 1, Part 2, 1.1R (EEA territorial scope rule: compatibility with European law)).

The territorial scope of the approved persons regime and its application to incoming EEA firms is set out in SUP 10A.1 (see SUP 10A.1.11R and SUP 10A.1.13R).

APER 1.1A.7 G gives examples of the effect of APER 1.1A.1R and APER 1.1A.2R1. The first column says whether the example involves an FCA-approved person in relation to one or two firms3. The second3 column explains what functions APER covers in the scenario set out in the first column3.

1. (1)

   A person may be an approved person in relation to more than one firm. When that is the case, APER applies in relation to all those firms.1

2. (2)

   APER does not apply if the firm is an SMCR firm3, except for approved persons of an appointed representative of an SMCR firm3.1

   2
3. (3)

   If a person is an approved person of a firm (A) that is not an SMCR firm3and also of another firm (B) that is an SMCR firm3, the result is: 1

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   1. (a)

      APER applies to the approved person in relation to firm A; and1

   2. (b)

      COCON applies to the approved person in relation to firm B.1

1. (1)

   APER 1.1A1 refers to 3an approved person’sfirm. This means their authorised approved person employer3.

   1
2. (2)

   Under section 59 of the Act (Approval for particular arrangements) there are two kinds of approved person.

3. (3)

   Section 59(1) of the Act describes the first. It covers a person who performs a controlled function under an arrangement entered into by an authorised person ("A"). In this case, the authorised approved person employer is3 A.

   1
4. (4)

   Section 59(2) of the Act describes the second. It covers a person who performs a controlled function under an arrangement entered into by a contractor ("B") of an authorised person ("A"). In this case, the authorised approved person employer is3 A (and not B).

   1

3The Statements of Principle contained in APER 2 are rules made 2under section 64A(1)(a) 2of the Act (Rules of conduct). 2

2The guidance in APER 3 and APER 4 is guidance on the Statements of Principle and is called the2Code of Practice for Approved Persons2.

The Code of Practice for Approved Persons sets out descriptions of conduct which, in the opinion of the FCA3, do or2 do not comply with a Statement of Principle2. The Code of Practice for Approved Persons also sets out, in certain cases, factors which, in the opinion of the FCA3, are to be taken into account in determining whether or not an approved person's conduct complies with a Statement of Principle.2

As set out in SUP 10A.3.1 R (Provisions related to the Act)3, a function is a controlled function only to the extent that it is performed under an arrangement entered into by:

1. (1)

   a firm; or

2. (2)

   a contractor of the firm;

in relation to the carrying on by the firm of a regulated activity.