CREDS 8.3 Approved persons

The purpose of this section is to set out 2guidance relating to the FCA’s requirements about2 approved persons that apply2 to credit unions. The full details can be found in Chapter 10C2 of the Supervision manual (SUP)2.

The PRA also has a regime about approved persons in credit unions, which can be found in its Rulebook. CREDS does not summarise the PRA’s regime.2

1. (1)

   The effect of section 59 of the Act is that if a person is to perform certain functions (which are known as controlled functions) for a credit union, the credit union should first apply for approval to:2

   1. (a)

      the FCA (if the controlled function is specified by the FCA in its rules); or2

   2. (b)

      the PRA (if the controlled function is specified by the PRA in its rules).2

2. (2)

   The firm should not allow the person to perform that function until the firm receives the approval.2

3. (3)

   A person for whom the firm has received that approval is called an approved person.2

1. (1)

   The regime for approved persons differs between SMCR firms3 and other types of firm.2

2. (2)

   A credit union is a type of SMCR firms3.

   2
3. (3)

   SUP 10C deals with the approved persons requirements for credit unions and other SMCR firms3.

   2

1. (1)

   The controlled functions specified by the FCA for credit unions and other SMCR firms3 can be found in the table in SUP 10C.4.3R.2 The table in SUP 10C Annex 1 3.2R sets out which of them apply to credit unions.3

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2. (2)

   The controlled functions specified by the PRA for credit unions and other SMCR firms3 can be found in the PRA’s Rulebook. They are not summarised in the Handbook.2

2

1. (1)

   The FCA and the PRA have specified different functions.2

2. (2)

   Sometimes a person’s job description means that they are performing an FCA controlled function and a PRA controlled function at the same time for the same firm. SUP 10C.9 has arrangements that reduce the need for the same person to be approved by both the FCA and the PRA.2

There are two types of controlled function under the Act:2

1. (1)

   a designated senior management function; and2

2. (2)

   any other controlled function.2

1. (1)

   The designated senior management functions cover the top management roles in a firm.2

2. (2)

   An approved person approved to perform a designated senior management function is called an SMF manager.2

3. (3)

   Designated senior management functions only apply to SMCR firms3, including credit unions. 2

4. (4)

   All controlled functions in a credit union are designated senior management functions and every approved person in a credit union is also an SMF manager.2

2As well as listing the FCA’s designated senior management functions for credit unions and other SMCR firms3, SUP 10C has other requirements about SMF managers:

1. (1)

   SUP 10C sets out the procedures for applying for, granting, removing and varying approval as an SMF manager.

2. (2)

   SUP 10C requires firms to give various types of reports to the FCA about their SMF managers.

3. (3)

   SUP 10C explains that each firm must prepare a statement of responsibilities for each of its SMF managers. A statement of responsibilities is a description of the SMF manager’s responsibilities in connection with the designated senior management functions for which they are approved.