SUP 10A.6 FCA governing functions
Introduction
- (1)
Every appointed representative8 will have one or more persons responsible for directing its affairs. These persons will be performing the FCA governing functions and will be required to be FCA-approved persons unless the application provisions in SUP 10A.1, or the particular description of an FCA controlled function, provide otherwise. For example, each director of a company incorporated under the Companies Acts will perform an FCA governing function.5
32 - (2)
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332 - (3)
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A sole trader does not fall within the description of the governing functions.
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Director function (CF1)
If an appointed representative8 is a body corporate (other than a limited liability partnership), the director function is the function of acting in the capacity of a director (other than non-executive director) of that appointed representative8.
- (1)
If an appointed representative8 is a body corporate (other than a limited liability partnership), the director function is also the function of acting in the capacity of a person:
- (a)
who is a director, partner, officer, member (if the parent undertaking or holding company is a limited liability partnership), senior manager, or employee of a parent undertaking or holding company of the appointed representative8; and
- (b)
whose decisions or actions are regularly taken into account by the governing body of the appointed representative8.
- (a)
- (2)
(1) does not apply if that parent undertaking or holding company has a Part 4A permission or is regulated by an EEA regulator.
- (3)
(1) does not apply to the function falling into SUP 10A.6.13 R (non-executive director of the parent undertaking or holding company).
A director can be a body corporate and may accordingly require approval as an FCA-approved person in the same way as a natural person may require approval.
Non-executive director function (CF2)
If a an appointed representative8 is a body corporate, the non-executive director function is the function of acting in the capacity of a non-executive director of that appointed representative8.
- (1)
If an appointed representative8 is a body corporate, the non-executive director function is also the function of acting in the capacity of a person:
- (a)
who is a non-executive director of a parent undertaking or holding company; and
- (b)
whose decisions or actions are regularly taken into account by the governing body of the appointed representative8.
- (a)
- (2)
However, (1) does not apply if that parent undertaking or holding company has a Part 4A permission or is regulated by an EEA regulator.
Guidance on persons in a parent undertaking or holding company exercising significant influence
- (1)
The explanation in SUP 10C.5B.2G of the basis on which the group entity senior manager function is included as a controlled function for an SMCR firm is also relevant to7 the basis on which the director function and the non-executive director function are applied to persons who have a position with the appointed representative’s8 parent undertaking or holding company under SUP 10A.6.8 R or SUP 10A.6.13 R.
- (2)
The guidance in SUP 10C.5B.3G to SUP 10C.5B.5G about when the group entity senior manager function applies to an SMCR firm is also relevant to when those who have a position with an appointed representative’s8 parent undertaking or holding company may be performing a controlled function under7 SUP 10A.6.8 R or SUP 10A.6.13 R7.
Chief executive function (CF3)
The chief executive function is the function of acting in the capacity of a chief executive of an appointed representative8.
This function is having the responsibility, alone or jointly with one or more others, under the immediate authority of the governing body:
- (1)
for the conduct of the whole of the business (or relevant activities); or
- (2)
in the case of a branch8 in the United Kingdom of a non-UK appointed representative8, for the conduct of all of the activities subject to the UK regulatory system.
For a branch8 in the United Kingdom of a non-UK appointed representative8, the FCA would not normally expect the overseas chief executive of the appointed representative8 as a whole to be FCA-approved for this function where there is a senior manager under them8 with specific responsibility for those activities of the branch8 which are subject to the UK regulatory system. In some circumstances, the person within the appointed representative8 responsible for UK operations may, if the function is likely to enable them8 to exercise significant influence over the branch8, also perform the chief executive function8.
A person performing the chief executive function may be a member of the governing body but need not be. If the chairman of the governing body is also the chief executive, he will be discharging this function. If the responsibility is divided between more than one person but not shared, there is no person exercising the chief executive function. But if that responsibility is discharged jointly by more than one person, each of those persons will be performing the chief executive function.
Note that a body corporate may be a chief executive. If so, it will need to be approved 5to perform the chief executive function.
Partner function (CF4)
- (1)
If an appointed representative8 is a partnership, the partner function is the function of acting in the capacity of a partner in that appointed representative8.
- (2)
If the principal purpose of the appointed representative8 is to carry on one or more regulated activities, each partner performs the partner function.
- (3)
If the principal purpose of the appointed representative8 is other than to carry on regulated activities:
- (a)
a partner performs the partner function to the extent only that they have8 responsibility for a regulated activity; and
- (b)
a partner in an appointed representative8 will be taken to have responsibility for each regulated activity except where the partnership has apportioned responsibility to another partner or group of partners.
- (a)
If an appointed representative8 is a limited liability partnership, the partner function extends to the appointed representative8 as if the appointed representative8 were a partnership and a member of the appointed representative8 were a partner.
If a partnership is registered under the Limited Partnership Act 1907, the partner function does not extend to any function performed by a limited partner.
Director of unincorporated association function (CF5)
If an appointed representative8 is an unincorporated association, the director of unincorporated association function is the function of acting in the capacity of a director of the unincorporated association. 5
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