Related provisions for SUP 16.12.3B
Outsourcing arrangements
1Outsourcing arrangements |
Explanation |
Submitting form |
The FCA 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 FCA-designated senior management functions are performed by FCA-approved SMF managers, and that it is reasonable for A to rely on this. |
Firm B submits FCA-approved persons forms on behalf of firm A. |
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Outsourcing by A to B (both being a member of the same United Kingdomgroup and each having its registered office in the United Kingdom) |
See SUP 10C.3.9G |
Either A or B may submit FCA-approved persons forms on behalf of firms in the group (see SUP 15.7.8G). |
(i) A to B, where B: (a) is not an authorised person; and (b) is not part of the same group as A; or (ii) A to B, where A is a branch of an overseas firm in the United Kingdom, and B is an overseasundertaking of the same group; or (iii) A to B, where A is a UK authorised subsidiary of an overseas firm and B is an overseasundertaking of the same group. |
Responsibility for (as opposed to the performance of) any activity outsourced to B will remain with A. See SYSC 8. |
A ensures that an individual approved by the FCA or the PRA to perform a designated senior management function has responsibility for the outsourcedarrangement and A submits a form in relation to that individual. |
Schedule to the Recognition Requirements Regulations, paragraph 2B
(1) |
If the [UK RIE] is significant the following requirements apply to the management body - |
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(a) |
members of the management body must not at the same time hold positions exceeding more than one of the following combinations – |
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(i) |
one executive directorship with two non-executive directorships (or where so authorised by the FCA under regulation 44(1) [of the MiFI Regulations], three non-executive directorships); or |
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(ii) |
four non-executive directorships (or where so authorised by the FCA under regulation 44(1) [of the MiFI Regulations], five non-executive directorships); and |
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(b) |
the management body must have a nomination committee unless it is prevented by law from selecting and appointing its own members. |
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(2) |
For the purposes of sub-paragraph (1)(a) - |
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(a) |
any directorship in which the person represents the United Kingdom is not counted; |
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(b) |
executive or non-executive directorships - |
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(i) |
held within the same group, or |
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(ii) |
held within the same undertaking where the [UK RIE] holds a qualifying holding within the meaning of Article 4.1.31 of the markets in financial instruments directive [MiFID], |
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shall be counted as a single directorship; and |
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(c) |
any directorship in an organisation which does not pursue predominantly commercial objectives is not counted. |
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(3) |
The nomination committee referred to in sub-paragraph (1)(b) must - |
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(a) |
be composed of members of the management body who do not perform an executive function in the [UK RIE]; |
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(b) |
identify and recommend to the [UK RIE] persons to fill management body vacancies; |
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(c) |
at least annually assess the structure, size, composition and performance of the management body and make recommendations to the management body; |
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(d) |
at least annually assess the knowledge, skills and experience of individual members of the management body and of the management body collectively and report to the management body accordingly; and |
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(e) |
periodically review the policy of the management body for the selection and appointment of senior management and make recommendations to the management body; and |
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(f) |
be able to use any forms of resource it deems appropriate, including external advice. |
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(4) |
In performing its functions under sub-paragraph (3), the nomination committee must take account of the need to ensure that the management body’s decision making is not dominated by- |
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(a) |
any one individual; or |
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(b) |
a small group of individuals, |
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in a manner that is detrimental to the interests of the [UK RIE] as a whole. |
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(5) |
In performing its function under sub-paragraph 3(b) the nomination committee must - |
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(a) |
evaluate the balance of knowledge, skills, diversity and experience of the management body; |
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(b) |
prepare a description of the roles, capabilities and expected time commitment for any particular appointment; |
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(c) |
decide on a target for the representation of the underrepresented gender in the management body and prepare a policy on how to meet that target; |
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(d) |
engage a broad set of qualities and competences, and for that purpose have a policy promoting diversity on the management body. |
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(6) |
In sub-paragraph (1), “significant” in relation to a [UK RIE] means significant in terms of the size and internal organisation of the [UK RIE] and the nature, scale and complexity of the [UK RIE’s] activities. |