AUTH 6 Annex 1 Approved Persons

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).1

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. 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 actuarial and with-profits actuary functions2.

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).1

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.