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SUP 10.12 Application for approval and withdrawing an application for approval

When to apply for approval

SUP 10.12.1G

In accordance with section 59 of the Act (Approval for particular arrangements), where a candidate will be performing one or more controlled functions, a firm must take reasonable care to ensure that the candidate does not perform these functions unless he has prior approval from the FSA.

How to apply for approval

SUP 10.12.2D

An application by a firm for the FSA's approval under section 59 of the Act (Approval for particular arrangements) must be made by completing Form A.

1111
  1. (1)

    An application by a firm other than a credit union must be made by submitting Form A online at www.fsa.gov.uk using the form specified on the FSA's ONA system.11

  2. (2)

    An application by a credit union must be made using the form in SUP 10 Annex 4D and must be submitted in the way set out in SUP 15.7.4 R to SUP 15.7.9 G (Form and method of notification).11

  3. (3)

    Where a firm is obliged to submit an application online under (1), if the FSA's information technology systems fail and online submission is unavailable for 24 hours or more, until such time as facilities for online submission are restored a firm must use the form in SUP 10 Annex 4 D and submit it in the way set out in SUP 15.7.4 R to SUP 15.7.9 G (Form and method of notification).11

[Note: See SUP 10.13.5G for the circumstances in which a shortened Form A may be used.]11

SUP 10.12.2AG
  1. (1)

    11If the FSA's information technology systems fail and online submission is unavailable for 24 hours or more, the FSA will endeavour to publish a notice on its website confirming that online submission is unavailable and that the alternative methods of submission set out in SUP 10.12.2D (3) and SUP 15.7.4 R to SUP 15.7.9 G (Form and method of notification) should be used.

  2. (2)

    Where SUP 10.12.2D (3)) applies to a firm, GEN 1.3.2 R (Emergency) does not apply.

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Who should make the application?

SUP 10.12.3G
1438
  1. (1)

    In accordance with section 60 of the Act (Applications for approval), applications must be submitted by, or on behalf of, the firm itself, not by:988

    9
    1. (a)

      9the candidate; or

    2. (b)

      (where the candidate works for the firm's parent undertaking or holding company) by the firm's parent undertaking or holding company

  2. (2)

    Usually this will be the firm that is employing the candidate to perform the controlled function. Where a firm has outsourced the performance of a controlled function, the details of the outsourcing determine where responsibility lies and whom the FSA anticipates will submit approved persons application forms. SUP 10.12.4 G describes some common situations. The firm which is outsourcing is referred to as "A" and the person to whom the performance of the controlled function has been outsourced, or which makes the arrangement for the controlled function to be performed, is referred to as "B". In each situation, A must take reasonable care to ensure that, in accordance with section 59(2) of the Act, no person performs a controlled function under an arrangement entered into by its contractor in relation to the carrying on by A of a regulated activity, without approval from the FSA. See also SYSC 3.2.4 G and SYSC 8.1.1 R, and for insurers SYSC 13.9.8

SUP 10.12.4G

Outsourcing arrangements

Outsourcing arrangements

Submitting form

Firm A to firm B

The FSA will consider A to have taken reasonable care if it enters into a contract with B under which B is responsible for ensuring that the relevant controlled functions are performed by approved persons, and that it is reasonable for A to rely on this

Firm B submits approved persons forms on behalf of firm A

Outsourcing by A to B (both being a member of the same United Kingdom group and each having its registered office in the United Kingdom)

See SUP 10.3.4 G

See SUP 15.7.8 G

(i) A to B, where B is a non-authorised person not part of the samegroup as A

(ii) A to B, where A is a branch of an overseas firm in the United Kingdom, and B is an overseas undertaking of the samegroup

(iii) A to B, where A is a UK authorised subsidiary of an overseas firm, and B is an overseas undertaking of the same group

Responsibility for (as opposed to the performance of) any activity outsourced to B will remain with A. See SYSC 3.2.4 G and SYSC 83

A ensures that an individual approved under one of the significant influence functions has responsibility for the outsourced arrangement and A submits a form in relation to that individual

SUP 10.12.4AG

Where the notification of an appointed representative (SUP 12.7.1 R) is linked to an application for approval (SUP 10.12 (Applications for approval and withdrawing an application for approval)), any delay in receiving the notification under SUP 12.7.1 R may delay the FSA's approval of the individuals employed by that appointed representative who will be performing controlled functions for the firm.

Processing an application

SUP 10.12.5G

The Act allows the FSA three months from the time it receives a properly completed application to consider it and come to a decision. The FSA must either grant the application or, if it proposes not to grant an application, issue a warning notice (see DEPP 26). The FSA will deal with cases more quickly than this whenever circumstances allow and will try to meet the standard response times published on the website and in its Annual Report. However, if an application is incomplete when received, or the FSA has knowledge that, or reason to believe that, the information is incomplete, then the processing time will be longer than the published standard response times.

6
SUP 10.12.6G

Application forms must always be completed fully and honestly. Further notes on how to complete the form are contained in each form. If forms are not completed fully and honestly, applications will be subject to investigation and the candidate's suitability to be approved to undertake a controlled function will be called into question.10A person who provides information to the FSA that is false or misleading may commit a criminal offence, and could face prosecution under section 398 of the Act regardless of the status of their application.10

102
SUP 10.12.7G

If there is a delay in processing the application within the standard response time, the FSA will tell the firm making the application as soon as this becomes apparent.

SUP 10.12.8G

Before making a decision to grant the application or give a warning notice, the FSA may ask the firm for more information about the candidate. If it does this, the three month period in which the FSA must determine a completed application:

  1. (1)

    will stop on the day the FSA requests the information; and

  2. (2)

    will start running again on the day on which the FSA finally receives all the requested information.

SUP 10.12.9G

The FSA may grant an application only if it is satisfied that the candidate is a fit and proper person to perform the controlled function stated in the application form. Responsibility lies with the firm making the application to satisfy the FSA that the candidate is fit and proper to perform the controlled function applied for.

SUP 10.12.10G

For further guidance on criteria for assessing whether a candidate is fit and proper, see FIT.

Decisions on applications

SUP 10.12.11G

Whenever it grants an application, the FSA will confirm this in writing to all interested parties.

SUP 10.12.12G

If the FSA proposes to refuse an application in relation to one or more controlled functions, it must follow the procedures for issuing warning and decision notices to all interested parties. The requirements relating to warning and decision notices are in DEPP 2.6

66

Withdrawing an application for approval

SUP 10.12.13R

A firm applying to withdraw an application for approval11 must notify the FSA, using Form B, in the form set out in SUP 10 Annex 5 R.11

SUP 10.12.14G

Under section 61(5) of the Act (Determination of applications), the firm may withdraw an application only if it also has the consent of the candidate and the person by whom the candidate is or would have been employed, if this is not the firm making the application.