AUTH 6.2 Introduction

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.

An approved person is a person whose performance of one or more controlled functions has been approved by the FSA.

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.

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).

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).

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. (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

2. (2)

   the fit and proper test referred to in section 61 of the Act (Determination of applications) (see FIT).

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.1

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).2

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 4.1