Related provisions for SYSC 22.4.5
[deleted] 5
[deleted] [Editor’s note: The text of this provision has been moved to SYSC 24.2.6R]6
Table: Examples of how the need for dual FCA and PRA approval in relation to PRA-authorised persons is reduced
1Example |
Whether FCA approval required |
Whether PRA approval required |
Comments |
(1) A is appointed as chief risk officer and an executive director. |
No. A4 is not treated as performing the executive director function.4 |
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 4approval 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.4 |
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.4 |
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 function4 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 function4. |
(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 function4 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 function4. 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 function4 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 function4. 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 function4. |
(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 functions4 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 their old job when A4 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 function4 just because A goes on temporary sick leave. |
(11) A is appointed to be chair4 of the governing body and chair4 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 chair4 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 an overseas SMCR firm that is not an EEA SMCR firm.4 A is also an executive director of that firm’sUKbranch. |
No. A is not treated as performing the executive director function4. 3 |
Yes |
A’s functions as a director will be included in the PRA controlled function. |
Note 1: The relevant PRA rules can be found in the parts of the PRA Rulebook listed in SUP 10C.9.6G.4 |
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Note 2: Where one of the examples in this table includes someone being chief risk or finance officer or chair of the governing body, the example assumes that the firm is of a type for which that function is a PRA-designated senior management function.4 |
Table: To whom does COCON apply? 9
9Persons to whom COCON applies |
Comments9 |
(1) An SMF manager.9 |
|
(2) An employee (“P”) of an SMCR firm12 who:9 (a) performs the function of an SMF manager;9 (b) is not an approved person to perform the function in question; and9 (c) is required to be an approved person at the time P performs that function.9 |
|
(3) An employee of an SMCR firm12 who would be performing an FCA-designated senior management function12 but for SUP 10C.3.13R (The 12-week rule). 9 |
|
(4) A certification employee of an SMCR firm12.9 |
This applies even if the certification employee has not been notified that COCON applies to them or notified of the rules that apply to them.9 |
(5) An employee of an SMCR firm who would be performing an FCA certification function but for SYSC 27.5.1R (Emergency appointments) or SYSC 27.5.3R (Temporary12 UK role). 9 12 |
|
(6) Any employee of an SMCR firm12 not coming within another row of this table, except one listed in column (2) of this row (6) of this table12. 9 |
(A)12 This row (6)12 does not apply to an employee of an SMCR firm12 who only performs functions falling within the scope of the following roles:9 (a) receptionists; (b) switchboard operators; (c) post room staff; (d) reprographics/print room staff; (e) property/facilities management; (f) events management; (g) security guards; (h) invoice processing; (i) audio visual technicians; (j) vending machine staff; (k) medical staff; (l) archive records management; (m) drivers; (n) corporate social responsibility staff; (o) taking part in following activities of the firm:14 14 (i) the firm’s activities as a data controller; or 14(ii) the firm’s activities of data processing; as defined in the data protection legislation, but subject to Note (1) of this table14;data protection legislation;10 (p) cleaners; (q) catering staff; (r) personal assistant or secretary; (s) information technology support (ie, helpdesk); and (t) human resources administrators /processors. (B) This row (6) also does not apply to an employee of an SMCR insurance firm until 10 December 2019.12 |
(7) [deleted]12 9 |
9 |
(8) A board director of: a UK SMCR firm.12 9999 |
9 |
9 | |
14Note (1): A function is only within paragraph (o) of column (2) (Comments) of row (6) of this table if the function does not require the employee concerned to exercise a significant amount of discretion or judgment. |