SYSC 24.3 Who prescribed responsibilities should be allocated to

1The FCA expects that a person who has responsibility for an FCA-prescribed senior management responsibility:

1. (1)

   will generally (in the case of the FCA-prescribed senior management responsibilities in SYSC 24.3.3G(1)3) be the most senior employee or officer responsible for managing that area (or the most senior below the chief executive); and

2. (2)

   will:

   1. (i)

      be sufficiently senior and credible; and

   2. (ii)

      have sufficient resources and authority;

   to be able to exercise their management and oversight responsibilities effectively.

1The FCA expects that normally a firm will allocate the FCA-prescribed senior management responsibility with the following FCA reference letters (see column three of the table in SYSC 24.2.6R) to an SMF manager who is a non-executive director of the firm (or, in the case of a partnership, a partner without management responsibilities):

1. (1)

   (f) (development of members of governing body);

2. (2)

   (j) (internal audit oversight);

3. (3)

   (k) (compliance oversight);

4. (4)

   (l) (risk control oversight);

5. (5)

   (m) (remuneration code oversight); and

6. (6)

   (n) (whistleblowers’ champion).

1. (1)

   Subject to (2), the3 FCA expects that normally a firm will allocate the other FCA-prescribed senior management responsibilities to an SMF manager who performs executive functions for the firm.3

2. (2)

   The relevant rules in COLL deal with the persons to whom a firm should allocate FCA-prescribed senior management responsibility (za) (Allocation of responsibility for COLL compliance to an approved person).3

1The FCA accepts that it may not be practical for a small non-complex firm to comply with the parts of SYSC 24.3.1G(1), SYSC 24.3.2G and SYSC 24.3.3G(1)3 that would otherwise apply to it.

1. (1)

   1A UK SMCR banking firm is likely to be small for the purposes in SYSC 24.3.4G if it is:

   1. (a)

      a small CRR firm as defined in the part of the PRA Rulebook called “Allocation of responsibilities”; or

   2. (b)

      a credit union that meets the PRA’s size requirements for small CRR firms as defined.

2. (2)

   A firm is likely to be non-complex for these purposes if:

   1. (a)

      it conducts a limited number of simple business lines;

   2. (b)

      it does not rely on group governance arrangements; and

   3. (c)

      (in the case of a branch) it does not rely on governance arrangements for other parts of the firm.

1When deciding how to allocate FCA-prescribed senior management responsibilities, a firm should avoid assigning such a wide range of responsibilities to a particular SMF manager that they are not able to carry out those responsibilities effectively.

1The FCA expects that a firm will not normally split an FCA-prescribed senior management responsibility between several SMF managers, with each only having responsibility for part.

1The FCA expects that a firm will not normally allocate responsibility for an FCA-prescribed senior management responsibility to two or more SMF managers jointly.

1. (1)

   1Although the norm should be for a firm to have a single individual performing each FCA-prescribed senior management responsibility, there may be circumstances in which responsibilities can be divided or shared (see (2)).

2. (2)

   A firm should only divide or share a responsibility where this is appropriate and can be justified.

3. (3)

   For example, it would be justified to share a responsibility if that is done:

   1. (a)

      as part of a job share; or

   2. (b)

      where departing and incoming senior managers work together temporarily as part of a handover.

4. (4)

   A firm may have co-heads of a department or business unit if this can be justified under (1) to (3).

1. (1)

   1The FCA expects a firm to divide and allocate responsibilities under this chapter between its SMF managers so that responsibilities are grouped together appropriately.

2. (2)

   The firm should make the judgement:

   1. (a)

      in (1); and

   2. (b)

      about whether and how responsibilities should be shared;

   under:

   1. (c)

      SYSC 4.1.1R (robust governance arrangements);

   2. (d)

      any other applicable Handbook requirements, including:

      1. (i)

         SYSC 2 (Apportionment of Responsibilities);

      2. (ii)

         SYSC 24.3.7G to SYSC 24.3.9G; 3

      3. (iii)

         article 21 of the MiFID Org Regulation (as applied in accordance with SYSC 1 Annex 1 2.8AR, SYSC 1 Annex 1 3.2-AR, SYSC 1 Annex 1 3.2-BR, SYSC 1 Annex 1 3.2CR and SYSC 1 Annex 1 3.3R); and3

   3. (e)

      article 21 of the MiFID Org Regulation (General organisational requirements) or other similar relevant and directly applicable EU legislation.

3. (3)

   The firm should take into account the way it is organised, the business it carries out and the need not to allocate too many responsibilities to one individual (SYSC 24.3.6G).

4. (4)

   The FCA expects a firm to allocate FCA-prescribed senior management responsibilities to the SMF managers they are most closely linked to.

1SUP 10C.11.31G to SUP 10C.11.33G (What statements of responsibilities should contain: dividing and splitting responsibilities) contains material about:

1. (1)

   how to prepare statements of responsibilities where a responsibility is shared or divided between several SMF managers; and

2. (2)

   dividing and sharing responsibilities.

1. (1)

   1A firm may allocate more than one FCA-prescribed senior management responsibility to the same SMF manager.

2. (2)

   This is subject to:

   1. (a)

      SYSC 24.3.6G (should not give too many responsibilities to one person); and

   2. (b)

      SYSC 24.3.10G (what responsibilities should be grouped together).

1. (1)

   1As explained in SYSC 24.1.3R, there is no territorial limitation to the application of this chapter.

2. (2)

   This means that a firm should allocate the FCA-prescribed senior management responsibilities so that they cover activities, transactions, business areas and management functions that are located or take place wholly or partly outside, as well as ones in, the United Kingdom.

1In the case of an overseas SMCR firm, the FCA-prescribed senior management responsibilities relate to the activities of the firm’s branch in the United Kingdom (see SYSC 24.1.4R).