REC 3.4 Key individuals and internal organisation
Purpose
The purpose of REC 3.4 is to enable the FSA to monitor changes in the arrangements a UK recognised body makes for the carrying out of its relevant functions or for overseeing the work of key individuals or departments responsible for its relevant functions.
Key individuals
1Where, in relation to a UK RIE a proposal has been made to appoint or elect a person as a key individual, that UK RIE must at least 30 days before the date of the appointment or election give notice of that event, and give the information specified for the purposes of this rule in REC 3.4.4A R to the FSA.
[Note: Article 37(1), paragraph 1, second sentence of MiFID]
- (1)
Key individuals include the persons who, under the operational or managerial arrangements of the UK recognised body, are appointed to manage the departments responsible for carrying out its relevant functions, whether or not they are members of its governing body. A person appointed to carry out specific tasks, such as to conduct a particular investigation into a specific set of facts, would not usually be a key individual.
- (2)
A key individual need not be an employee of a UK recognised body. For example, an employee of an undertaking in the same group or a self-employed contractor of a UK recognised body might be a key individual, depending on the role he plays in that body.
- (3)
A department of a UK recognised body should be regarded as responsible for carrying out a relevant function if it is responsible for any activity or activities which form a significant part of a relevant function or which make a significant contribution to the performance of a relevant function.
- (4)
The FSA does not need to be notified where minor changes are made to the responsibilities of a key individual, but where a major change in responsibilities is made which amounts to a new appointment, the FSA should be notified under REC 3.4.2 R.
The following information is specified for the purposes of REC 3.4.2 R:
- (1)
where a person has been appointed or elected as a key individual:
- (a)
that person's name;
- (b)
his date of birth;
- (c)
a description of the responsibilities which he will have in the post to which he has been appointed or elected, including for a UK RIE which operates an RAP where the person has responsibilities both in the UK RIE and RAP, a description of the responsibilities he has in respect of each body; or2
- (a)
- (2)
where a person has resigned as or otherwise ceased to be a key individual, that person's name.
1The following information is specified for the purposes of REC 3.4.2A R:
- (1)
that person's name;
- (2)
his date of birth;
- (3)
where applicable, a description of the responsibilities which he will have in the post to which he is to be appointed or elected.
[Note: Article 37(1), paragraph 1, second sentence of MiFID]
Standing committees
Where the governing body of a UK recognised body delegates any of its functions (which relate to that UK recognised body'srelevant functions) to a standing committee, or appoints a standing committee to manage or oversee the carrying out of any of that UK recognised body'srelevant functions, that UK recognised body must immediately notify the FSA of that event and give the FSA the following information:
Where:
- (1)
there is any change in the composition or the terms of reference of any standing committee referred to in REC 3.4.5 R; or
- (2)
any such committee is dissolved;
the UK recognised body must immediately notify the FSA of that event and give particulars of any change referred to in (1) to the FSA.
- (1)
Standing committees include permanent committees with executive, supervisory, policy-making or rule-making responsibilities. Committees appointed for particular tasks or committees established for purely consultative or advisory purposes would not usually be considered to be standing committees.
- (2)
Committees which include persons who are not members of the governing body can be standing committees.