SYSC 26.10 Group management arrangements and outsourcing

1. (1)

   1This chapter requires overall or local responsibility for various aspects of a firm’s affairs to be allocated to an SMF manager.

2. (2)

   This requirement does not prevent a firm from relying on an employee of a company in the same group to perform the function.

3. (3)

   A firm has two main choices about how to fit such arrangements into the senior managers regime for SMCR firms.

   1. (a)

      The group employee is appointed by the firm (usually by its governing body if it has one) to perform the function. This means that the firm will have entered into an arrangement with that person. As explained in SUP 10C.3.9G, an arrangement with the firm is one of the factors that makes the senior managers regime for SMCR firms apply. The result is that the group official will be performing a controlled function and will need to be approved as an SMF manager.

   2. (b)

      The firm appoints someone (A) to supervise what the group employee does (so far as it concerns the firm) and allocates responsibility for the function to A, leaving day-to-day activities to the group employee. A will need to be approved as an SMF manager.

1SYSC 26.10.1G also applies to a firm that outsources functions to a third party and is relying on an individual from the outsourced services provider to carry out the functions in those paragraphs.

1. (1)

   1This chapter does not cover responsibility for an aspect of a firm’s affairs managed by an individual approved to perform the Group Entity Senior Manager or the Group Entity Senior Insurance Manager PRA-designated senior management function (see SYSC 26.4.2R (Exclusions where other requirements apply)).

2. (2)

   Where a responsibility is held by someone approved to perform one of those PRA-designated senior management functions for the firm, there is no need to appoint that person under this chapter and apply the arrangements in SYSC 26.10.1G.

3. (3)
   1. (a)

      The statement of responsibilities for the individual performing the PRA-designated senior management function; and

   2. (b)

      the firm’s management responsibilities map;

   should clearly show what responsibilities are held by that individual.