Related provisions for SUP 10C.12.23
1Schedule to the Recognition Requirements Regulations, paragraph 2A
(1) |
The composition of the management body of a [UK RIE] must reflect an adequately broad range of experience. |
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(2) |
The management body must possess adequate collective knowledge, skills and experience in order to understand the [UK RIE’s] activities and main risks. |
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(3) |
Members of the management body must - |
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(a) |
commit sufficient time to perform their functions on the management body; |
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(b) |
act with honesty, integrity and independence of mind; and |
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(c) |
effectively - |
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(i) |
assess and challenge, where necessary, the decisions of the senior management; and |
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(ii) |
oversee and monitor decision making. |
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(4) |
The management body must - |
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(a) |
define and oversee the implementation of governance arrangements that ensure the effective and prudent management of the [UK RIE] in a manner which promotes the integrity of the market, which at least must include the - |
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(i) |
the segregation of duties in the organisation; and |
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(ii) |
the prevention of conflicts of interest; |
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(b) |
monitor and periodically assess the effectiveness of the [UK RIE’s] governance arrangements; and |
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(c) |
take appropriate steps to address any deficiencies found as a result of the monitoring under paragraph (b). |
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(5) |
A [UK RIE] must - |
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(a) |
devote adequate human and financial resources to the induction and training of members of the management body; |
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(b) |
ensure that the management body has access to the information and documents it requires to oversee and monitor management decision-making; and |
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(c) |
notify the FCA of the identity of all the members of its management body. |
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(6) |
A [UK RIE] and, if it has a nomination committee, its nomination committee must engage a broad set of qualities and competences when recruiting persons to the management body, and for that purpose have a policy promoting diversity on the management body. |
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(7) |
The number of directorships a member of the management body can hold at the same time must take into account individual circumstances and the nature, scale and complexity of the [UK RIE’s] activities. |
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. |