Related provisions for DTR 1C.2.2

(1) A firm applies for approval for A to perform the executive director function and the money laundering function.

There should be a single statement of responsibilities document that covers the two functions.

The combined document should be included with the application for approval.

(2) Firm X applies for approval for A to perform the executive director function. Firm Y applies for approval for A to perform the money laundering function. Both firms are relevant authorised persons.

There should be separate statements of responsibilities for each firm.

This is the case even if Firm X and Firm Y are in the same group.

(3) A firm applies for approval for A to perform an FCA-designated senior management function and a PRA-designated senior management function.

The arrangements in SUP 10C.9 for FCA functions to be absorbed into PRA ones do not apply and so there are separate applications to the FCA and PRA.

The single statement of responsibilities document should cover both the FCA and the PRA functions.

(4) A has approval to perform the executive director function. Later, A is to be appointed to perform the money laundering function for the same firm. This will also result in substantial changes to A’s duties as an executive director.

The firm should not use Form J to notify the changes to A’s duties as an executive director.

The firm should submit a revised single statement of responsibilities document along with the application to perform the money laundering function.

The single statement of responsibilities document should cover both functions. The part relating to A’s duties as an executive director should be updated.

(5) A has approval to perform the executive director function. Later, A is to be appointed to perform the PRA's chief risk officer designated senior management function for the same firm. This will also result in substantial changes to A’s duties as an executive director.

The firm should not use Form J to notify the changes to A’s duties as an executive director.

The firm should submit a revised single statement of responsibilities document along with the application to perform the PRA function.

The firm should not submit the revised single statement of responsibilities document separately to the FCA. Instead, it should include it as part of the application to the PRA.

The single statement of responsibilities document should cover both the FCA and the PRA functions. The part relating to A’s duties as an executive director should be updated.

(6) A has approval to perform the money laundering function. The approval to perform the money laundering function is subject to a condition. The firm is applying to vary that condition.

The firm should include a revised statement of responsibilities with the application.

The firm should not use Form J. It should submit a revised statement of responsibilities along with the application to vary the approval.

(7) A has approval to perform the executive director function and the money laundering function for the same firm. The approval to perform the money laundering function is subject to a condition. The firm is applying to vary that condition. As part of the same arrangements, there are to be substantial changes to A’s job as an executive director.

The firm should not use Form J to notify the changes to A’s duties as an executive director.

The firm should submit a revised single statement of responsibilities document along with the application to vary the approval for the money laundering function.

The single statement of responsibilities document should be updated and should cover both functions.

(8) A has approval to perform the executive director function and the PRA's chief risk officer designated senior management function for the same firm. The arrangements in SUP 10C.9 for FCA functions to be absorbed into PRA ones do not apply and so there are separate FCA and PRA approvals.

The approval to perform the PRA's chief risk officer designated senior management function is subject to a condition. The firm is applying to vary that condition. As part of the same arrangements, there are to be substantial changes to A’s job as an executive director.

The firm should not use Form J to notify the changes to A’s duties as an executive director.

The firm should submit a revised single statement of responsibilities document along with the application to vary the PRA function.

The firm should not submit the revised document separately to the FCA. Instead it should include it as part of the application to the PRA.

The single statement of responsibilities document should cover both the FCA and the PRA functions and should be updated.

(9) A has approval to perform the executive director function and the money laundering function for the same firm.

Sometime later, A is to give up the

money laundering function and take up the PRA's chief risk officer designated senior management function. This will involve major changes to A’s role as executive director.

The answer to example (5) applies.

The application to the PRA to perform the PRA function should be accompanied by a single document that:

(1) contains the statement of responsibilities for the new function;

(2) contains the revised statement of responsibilities for the executive director function; and

(3) reflects the fact that A is no longer performing the money laundering function.

(10) A firm has approval for A to perform the executive director function and the money laundering function.

A then ceases to perform the money laundering function but continues to perform the executive director function.

The firm must submit:

(a) Form C for the money laundering function;

(b) Form J; and

(c) a single updated statement of responsibilities document that covers the executive director function.

(11) A has approval to perform the executive director function and the PRA's chief risk officer designated senior management function for the same firm. Later, A gives up his role as chief risk officer.

The firm must submit:

(a) Form C for the PRA function;

(b) Form J; and

(c) a single updated statement of responsibilities document that covers the executive director function.

The firm should not submit the revised single statement of responsibilities document separately to the FCA. Instead, it should include it as part of the notification to the PRA.

(12) A has approval to perform the executive director function. Later, A is to be appointed to perform the money laundering function for the same firm.

The application is rejected.

The single statement of responsibilities document submitted as part of the application will no longer be correct as it reflects the proposed new approval.

If the only changes to the single document in the version sent with the application are ones, clearly and exclusively tied to the new function, the firm will not need to amend the document as the changes will automatically fall away.

In any other case (for instance if the application is approved conditionally), it is likely that the firm will need to update it using Form J.

In any case, the FCA may contact the firm to agree a revised single statement of responsibilities document.

(13) A has approval to perform the executive director function. Later, A is to be appointed to perform the money laundering function for the same firm.

This will not result in any changes to A’s duties as an executive director. However, there have been some insignificant changes to A’s role as an executive director since the firm submitted the most recent single statement of responsibilities document. The changes are not connected to A’s appointment to perform the money laundering function.

The answer for example (4) applies.

The single statement of responsibilities document should be updated to cover the changes to A’s duties as executive director, as well as covering A’s new money laundering role. It does not matter that the changes to A’s role as an executive director are not significant.

(14) A has approval to perform the executive director function. Later, A’s business unit grows in size and so the firm needs to apply for A to be approved to perform the PRA's Head of Key Business Area designated senior management function. However, A’s responsibilities do not change.

The firm should submit a revised single statement of responsibilities document along with the application to perform the PRA function.

The firm should submit a single statement of responsibilities document that covers both the FCA and the PRA functions.

It should not submit the revised single statement of responsibilities document separately to the FCA. Instead, it should include it as part of the application to the PRA.

2(15) Firm X has a branch in the United Kingdom. Firm Y is a UK authorised subsidiary3 of firm X.

Firm X is a third-country relevant authorised person and firm3 Y is a UK relevant authorised person.

Both firms apply for approval for the same individual (P) to perform the executive3director function.

There should be separate statement of responsibilities for P for each firm.

The single statement of responsibilities document means the single document described in SUP 10C.11.13D

(1) A is appointed as chief risk officer and an executive director.

No. He is not treated as performing the executive director function.

Yes

Chief risk officer is a PRA-designated senior management function. A’s functions as a director will be included in the PRA-designated senior management function. To avoid the need for FCA approval, A’s appointment as director should not take effect before PRA approval for the chief risk officer role.

(2) Same as example (1), except that A will take up the role as an executive director slightly later because the approval is needed from the firm's shareholders or governing body.

No

Yes

The answer for (1) applies. The arrangements in this section apply if the application to the PRA says that A will start to perform the potential FCA governing function around the time of the PRA approval as well as at that time.

(3) Same as example (1) but the application to the PRA does not mention that it is also intended that A is to be an executive director.

Yes, to perform the executive director function.

Yes

SUP 10C.9.8R does not apply if the application for PRA approval does not say that A will also be performing what would otherwise be an FCA governing function.

(4) A is to be appointed as chief executive and an executive director.

No. A is not treated as performing the executive director function.

Yes

Being a chief executive is a PRA-designated senior management function. A’s functions as a director will be included in the PRA controlled function.

(5) A is appointed as chief risk officer. Later, A is appointed as an executive director while carrying on as chief risk officer.

Yes, when A takes up the director role. The executive director function applies.

Yes, when A takes up the chief risk officer role.

SUP 10C.9.8R does not apply because, when the firm applied for approval for A to perform the PRA chief risk officer designated senior management function, there was no plan for A also to perform the executive director function.

(6) A is appointed as an executive director. Later, A takes on the chief risk officer function and remains as an executive director.

Yes, when A is appointed as director. The executive director function applies.

Yes, when A takes up the chief risk officer role.

When A is appointed as chief risk officer, A is still treated as carrying on the executive director function. A retains the status of an FCA-approved person.

(7) A is appointed as chief risk officer. A then stops performing that role and for a while does not perform any controlled function for that firm. Later, A is appointed as an executive director with the same firm.

Yes, when A is appointed as an executive director. The executive director function applies.

Yes, when A takes up the chief risk officer role.

SUP 10C.9.8R does not apply because there is no current PRA approval when A is being appointed as a director.

(8) A is appointed as an executive director and chief risk officer at the same time. Later, A gives up the role as chief risk officer but remains as an executive director.

No, on A’s first appointment (see example (1)). But when A gives up the role as chief risk officer, FCA approval is needed to perform the executive director function.

Form E should be used. The application should state that it is being made as a result of A ceasing to perform a PRA-designated senior management function.

Form A should be used if there have been changes in A’s fitness (SUP 10C.10.9D(4))

Yes, on A’s first appointment.

When A stops being a chief risk officer, A stops performing a PRA-designated senior management function. However, being an executive director requires FCA approval. A does not have that approval because A did not need it when A was first appointed.

The combined effect of SUP 10C.9.8R and the relevant PRA rules is that the firm has three months to secure approval by the FCA. During that interim period, A keeps the status of a PRA approved person performing the director element of the PRA chief risk designated senior management function - which is included in that function under relevant PRA rules. The relevant PRA rules say that, during this transitional period, A is still treated as performing the PRA chief risk designated senior management function and SUP 10C.9.8R says that, for as long as A is performing a PRA-designated senior management function, A does not perform the executive director function.

(9) A is appointed as the chief finance officer and an executive director at the same time. Later, A switches to being chief risk officer while remaining as an executive director.

No

Yes

The arrangements in SUP 10C.9.8R continue to apply, even though A switches between PRA-designated senior management function after the PRA's first approval.

(10) A is appointed chief risk officer and an executive director. A goes on temporary sick leave. A takes up his old job when he comes back.

No, neither on A’s first appointment nor when A comes back from sick leave.

Yes

SUP 10C.9.8R still applies on A’s return because A does not stop performing either the PRA's chief risk function or what would otherwise have been the executive director function just because A goes on temporary sick leave.

(11) A is appointed to be chairman of the governing body and chairman of the nomination committee at the same time.

No. A does not need approval to perform the chair of the nomination committee function.

Yes, on first appointment.

Being chairman of the governing body is a PRA-designated senior management function. Therefore, the answer for example (1) applies.

2(12) ‘A’ is to be appointed to perform the Head of Overseas Branch PRA-designated senior management function (SMF19) for a third-country relevant authorised person. A is also an executive director of that firm’sUKbranch.

No. A is not treated as performing the executive3director function.

Yes

A’s functions as a director will be included in the PRA controlled function.

Note: The relevant PRA rules can be found in Chapter 2 of the part of the PRA rulebook called ‘Senior Management Functions’

1Introduction

1.

An accredited body is a body appearing in the list of such bodies in the Glossary.1

2.

Information on accredited bodies, including guidance on the process for including an applicant body in the list, is set out below and the obligation to pay the application fee is set out in FEES 3.2.

3.

[deleted]1

Process for including a body in the list of accredited bodies

4.

In considering the compatibility of a proposed addition with the statutory objectives, the FCA will determine whether the applicant will, if accredited, contribute to securing an appropriate degree of protection for consumers having regard in particular to:

(1)

the matters set out in paragraphs 10 to 20; and

(2)

the rules and practices of the applicant.

5.

An application to the FCA to be added to the list of accredited bodies should set out how the applicant will satisfy the criteria in paragraphs 10 to 20. The application should be accompanied by a report from a suitable auditor which sets out its independent assessment of the applicant's ability to meet these criteria. An application form is available from the FCA upon request.

6.

When considering an application for accredited body status the FCA may:

(1)

carry out any enquiries and request any further information that it considers appropriate, including consulting other regulators;

(2)

ask the applicant or its specified representative to answer questions and explain any matter the FCA considers relevant to the application;

(3)

take into account any information which the FCA considers appropriate to the application; and

(4)

request that any information provided by the applicant or its specified representative is verified in such a manner as the FCA may specify.

7.

The FCA will confirm its decision in writing to the applicant.

8.

The FCA will enter into an agreement with the applicant or accredited body which will specify the requirements that the accredited body must meet. These will include the matters set out in paragraphs 10 to 20. Approval as an accredited body becomes effective only when the name of the applicant is added to the Glossary definition of accredited body.

9.

Paragraphs 10 to 20 set out the criteria which an applicant should meet to become an accredited body and which an accredited body should meet at all times.

Acting in the public interest and furthering the development of the profession

10.

The FCA will expect an accredited body to act in the public interest, to contribute to raising consumer confidence and professional standards in the retail investment advice market and to promoting the profession.

Carrying out effective verification services

11.

If independent verification of a retail investment adviser's professional standards has been carried out by an accredited body, the FCA will expect the accredited body to provide the retail investment adviser with evidence of that verification in a durable medium and in a form agreed by the FCA. This is referred to in this Appendix and TC 2.1.28 R as a 'statement of professional standing'.

12.

The FCA will expect an accredited body to have in place effective procedures for carrying out its verification activities. These should include:

(1)

verifying that each retail investment adviser who is a member of or subscriber to the accredited body's verification service has made an annual declaration in writing that the retail investment adviser has, in the preceding 12 months, complied with APER or, for a relevant authorised person, complied with COCON2and completed the continuing professional development required under TC 2.1.15 R;1

(2)

verifying annually the continuing professional development records of no less than 10% of the retail investment advisers who have used its service in the previous 12 months to ensure that the records are accurate and the continuing professional development completed by the retail investment advisers is appropriate; and

(3)

verifying that, if required by TC, the retail investment advisers who use its services have attained an appropriate qualification. This should include, where relevant, checking that appropriate qualification gap-fill records have been completed by the retail investment advisers.

13.

The FCA will not expect an accredited body to carry out the verification in paragraph 12(3) if a retail investment adviser provides the accredited body with evidence in a durable medium which demonstrates that another accredited body has previously verified the retail investment adviser's appropriate qualification, including, where relevant, appropriate qualification gap-fill.

14.

The FCA will expect an accredited body to make it a contractual condition of membership (where a retail investment adviser is a member of the accredited body) or of using its verification service (where a retail investment adviser is not a member of the accredited body) that, as a minimum, the accredited body will not continue to verify a retail investment adviser's standards. The FCA2will also expect an accredited body to 2withdraw its statement of professional standing if it 2is provided with false information in relation to a retail investment adviser's qualifications or continuing professional development or a false declaration in relation to a retail investment adviser's compliance with APER or, for a relevant authorised person, compliance with COCON2.

In this regard, an accredited body must have in place appropriate decision-making procedures with a suitable degree of independence and transparency.

Having appropriate systems and controls in place and providing evidence to the FCA of continuing effectiveness

15.

The FCA will expect an accredited body to ensure that it has adequate resources and systems and controls in place in relation to its role as an accredited body.

16.

The FCA will expect an accredited body to have effective procedures in place for the management of conflicts of interest and have a well-balanced governance structure with at least one member who is independent of the sector.

17.

The FCA will expect an accredited body to have a code of ethics and to ensure that its code of ethics and verification service terms and conditions do not contain any provisions that conflict with APER or COCON2.

Ongoing cooperation with the FCA

18.

The FCA will expect an accredited body to provide the FCA with such documents and information as the FCA reasonably requires, and to cooperate with the FCA in an open and transparent manner.

19.

The FCA will expect an accredited body to share information with the FCA (subject to any legal constraints) in relation to the professional standards of the retail investment advisers who use its service as appropriate. Examples might include conduct issues, complaints, dishonestly obtaining or falsifying qualifications or continuing professional development or a failure to complete appropriate continuing professional development. The FCA will expect an accredited body to notify the firm if issues such as these arise.

20.

The FCA will expect an accredited body to submit to the FCA an annual report by a suitable independent auditor which sets out that auditor's assessment of the quality of the body's satisfaction of the criteria in paragraphs 10 to 19 in the preceding 12 months and whether, in the auditor's view, the body is capable of satisfying the criteria in the subsequent 12 months. The FCA will expect this annual report to be submitted to the FCA within three months of the anniversary of the date on which the accredited body was added to the Glossary definition of accredited body.

Withdrawal of accreditation

21.

If an accredited body fails or, in the FCA's view, is likely to fail to satisfy the criteria, the FCA will discuss this with the accredited body concerned. If, following a period of discussion, the accredited body has failed to take appropriate corrective action to ensure that it satisfies and will continue to satisfy the criteria, the FCA will withdraw the accredited body's accreditation by removing its name from the list of accredited bodies published in the Glossary. The FCA will expect the body to notify each retail investment adviser holding a current statement of professional standing of the FCA's decision. A statement of professional standing issued by the accredited body before the withdrawal of accreditation will continue to be valid until its expiration.