Related provisions for SUP App 2.7.2

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SUP 10C.8.3GRP

Table: Examples of how the other local responsibility function applies

Example

Comments

(1) ‘A’ is allocated local responsibility for one of a branch’s main business lines. A is also appointed to perform a PRA-designated senior management function for the same branch. The firm is a PRA-authorised person5.

A only needs approval to perform the PRA-designated senior management function.

(2) ‘A’ is outside the branch’s management structure and A’s responsibilities for the branch are limited to setting overall strategy for the branch. A does not have responsibility for implementing that strategy.

A is not performing the other local responsibility function. The reason for this is explained in SYSC 26.8.3G4. SUP 10C.8.1R(2) is irrelevant to this example.

4

(3) A small branch undertakes two business lines (wholesale lending and corporate investments). ‘A’ is head of wholesale lending and is also an executive director of the branch. ‘B’ is head of corporate investments and does not sit on the branch management committee but reports to it on corporate investments. The branch allocates local responsibility for these functions to A and B. Neither A nor B performs any other FCA-designated senior management function or (if the firm is a PRA-authorised person)5PRA-designated senior management function.

4

A only needs approval to perform the executive director function4. B needs approval to perform the other local responsibility function.

3

(4) A branch does not have a Head of Internal Audit. ‘P’ is allocated local responsibility for internal audit in relation to that branch.

P needs approval to perform the other local responsibility function. However, if P has already been approved to perform another FCA-designated senior management function or (if the firm is a PRA-authorised person)5PRA-designated senior management function for that firm4, then P will not be performing the other local responsibility function.

(5) ‘A’ is appointed to perform the executive director function4. The same branch also allocates local responsibility for some branch functions to A.

3

A only needs approval to perform the executive director function4.

3

(6) ‘A’ is approved to perform the other local responsibility function. Later, A is appointed to perform the executive director function4 for the same firm.

3

A requires approval for the other local responsibility function when A is first appointed. When A is later approved to perform the executive director function4, A stops performing the other local responsibility function. The firm should use Form E to apply for approval for A to perform the executive director function and to notify the FCA that A is no longer performing the other local responsibility function.4

33

(7) ‘A’ is appointed to perform:

(a) the compliance oversight function for one firm (Firm X) in a group (which may or may not be an SMCR firm to which the other local responsibility function applies4); and

(b) a function coming within the scope of the other local responsibility function for the United Kingdombranch of4 another firm (which is an overseas SMCR firm to which the other local responsibility function applies4) in the same group (Firm Y).

A needs approval to perform the compliance oversight function for Firm X and the other local responsibility function for Firm Y.

(8) ‘A’ is appointed to take on some functions that come within the other local responsibility function. Later, A is appointed as chief risk officer. A is a type of firm for which being chief risk officer is a PRA designated senior management function or an FCA-designated senior management function5.

4

On A’s first appointment, A will need to be approved to perform the other local responsibility function.

On being approved as chief risk officer, A stops performing the other local responsibility function4.

(9) ‘A’ is appointed as an executive director. A then resigns and takes up a job with the same firm coming within the other local responsibility function4.

On A’s first appointment, A will need to be approved to perform the executive director function4. A will need to get approval to perform the other local responsibility function before A takes up their new responsibilities4.

3

Note: Local responsibility is explained in SYSC 26 (Senior managers and certification regime: Overall and local responsibility).4
SUP 16.1.7GRP
66Where a PRA-authorised person is required to notify or provide any information to (a) the FCA37 by a PRA Handbook provision and (b) the FCA by the equivalent provision in the FCA Handbook, the PRA-authorised person is expected to comply with both provisions.
DEPP 1.1.1GRP
1This manual (DEPP) is relevant to firms, approved persons and other persons, whether or not they are regulated by the FCA.5 It sets out:5(1) the FCA's5 decision-making procedure for giving statutory notices. These are warning notices, decision notices and supervisory notices (DEPP 1.2 to DEPP 5);5(1A) the FCA's decision-making procedure in cases where the PRA is required to seek the FCA's consent before approving an application (a) for Part 4A permission; (b) for the variation
SUP 10C.7.3GRP

Table: Examples of how the other overall responsibility function applies

1Example

Comments

(1) ‘A’ is appointed to perform the executive director function2 and to perform a potential other overall responsibility function for the same firm.

A only needs approval to perform the executive director function2.

(2) ‘A’ is approved to perform the other overall responsibility function. Later, A is appointed to perform the executive director function2 for the same firm.

A requires approval for the other overall responsibility function when A is first appointed. When A is later approved to perform the executive director function2, A stops performing the other overall responsibility function. The firm should use Form E to apply for approval for A to perform the executive director function and to notify the FCA that A is no longer performing the other overall responsibility function2.

(3) ‘A’ is appointed to perform the PRA's Head of Key Business Area designated senior management function for Firm X2 and to perform a potential other overall responsibility function for the same firm. Firm X is an SMCR banking firm.2

A only needs approval to perform the PRA's Head of Key Business Area designated senior management function. It does not make any difference whether the potential other overall responsibility function that A performs is connected to the PRA's Head of Key Business Area designated senior management function.

(4) ‘A’ is approved to perform the other overall responsibility function for Firm X. Firm X is an SMCR banking firm.2 Later, A is appointed to perform the PRA's Head of Key Business Area designated senior management function for the same firm.

A requires approval for the other overall responsibility function when A is first appointed. When A is later approved to perform the PRA's Head of Key Business Area designated senior management function, A stops performing the other overall responsibility function.

(5) ‘A’ is appointed to perform:

(a) the compliance oversight function for one firm (Firm X) in a group (which may or may not be an SMCR firm to which the other overall responsibility function applies2); and

(b) a function coming within the scope of the other overall responsibility function for another firm (which is a an SMCR firm to which the other overall responsibility function applies2) in the same group (Firm Y).

A needs approval to perform the compliance oversight function for Firm X and the other overall responsibility function for Firm Y.

(6) ‘A’ is appointed to be head of sales for Firm X2 and to report directly to the firm'sgoverning body about this. This function also comes within the PRA's Head of Key Business Area designated senior management function. Firm X is an SMCR banking firm.2

A only needs approval to perform the PRA's Head of Key Business Area designated senior management function.

(7) ‘A’ is appointed to take on some functions that come within the other overall responsibility function. Later, A is appointed as chief risk officer.

The firm is one of those for which being chief risk officer is a PRA-designated senior management function or an FCA-designated senior management function3.

2

On A’s first appointment, A will need to be approved to perform the other overall responsibility function.

On being appointed as chief risk officer, 2A will stop performing the other overall responsibility function.

(8) ‘A’ is appointed to a role for Firm X2 that comes within the other overall responsibility function. Firm X is an SMCR banking firm.2 Later, the firm reorganises and A’s role comes within the PRA's Head of Key Business Area designated senior management function. A’s role does not otherwise change.

On A’s first appointment, A will need to be approved to perform the other overall responsibility function.2

When A is later approved to perform the PRA’s Head of Key Business Area designated senior management function, A stops performing the other overall responsibility function.2

(9) ‘A’ is appointed to a role for Firm X2 that comes within the PRA's Head of Key Business Area designated senior management function. It is also a potential other overall responsibility function. Later, the firm reorganises—A’s role stays the same but now it falls outside the PRA's Head of Key Business Area designated senior management function.

On A’s first appointment, A only needs approval to perform the PRA's Head of Key Business Area designated senior management function. Following the reorganisation, the firm has three months to get approval for A to perform the other overall responsibility function. This three-month period applies because the relevant PRA rules keep the PRA's Head of Key Business Area designated senior management function in place, which means that the other overall responsibility function does not apply during that period.

The relevant PRA rules can be found in Chapter 2 of the part of the PRA Rulebook2 titled ‘Senior Management Functions’, Chapter 2 of the part of the PRA Rulebook titled ‘Insurance - Senior Management Functions’ and Chapter 2 of the part of the PRA Rulebook titled ‘Large Non-Solvency II Firms – Senior Management Functions’4.

4

2

(10) ‘A’ is appointed to a role for Firm X2 that comes within the PRA's Head of Key Business Area designated senior management function. A also performs a potential other overall responsibility function. Later,2 A gives up the PRA role but carries on with the potential other overall responsibility function.

The answer to example (9) applies.

(11) ‘A’ is appointed as an executive director. A then resigns and takes up a job with the same firm coming within the other overall responsibility function.

On A’s first appointment, A will need to be approved to perform the executive director function2. A will need to get approval to perform the other overall responsibility function before A takes up their new responsibilities.2

Note (1): A potential other overall responsibility function means a function that would have come within the other overall responsibility function but is excluded by SUP 10C.7.1R(2).

Note (2): A potential other overall responsibility function should be recorded in A’s statement of responsibilities and in the firm'smanagement responsibilities map.
SUP 10A.13.6GRP

Outsourcing arrangements [deleted]5

FEES 2.2.2GRP
The FCA, (for FCA and PRA periodic fees, FOS and FSCS levies, 21SFGB levies, TPR SFGB levies and a TPR DA levy19), expects to issue invoices at least 30 days before the date on which the relevant amounts fall due. Accordingly it will generally be the case that a person will have at least 30 days from the issue of the invoice before an administrative fee becomes payable.2222221820672311117232
EG 1.1.2RP
3In the areas set out below, the Act expressly requires the FCA to prepare and publish statements of policy or procedure on the exercise of its enforcement and investigation powers and in relation to the giving of statutory notices. (1) section 63C requires the FCA to publish a statement of its policy on the imposition, and amount, of financial penalties on persons that perform a controlled function without approval; (1-A) 1section 63ZD requires the FCA, among other things, to
FEES 6.4.5RRP
Subject to3FEES 6.3.22 R, the FSCS must calculate a participant firm's share of a base costs levy by:33(1) for recognised investment exchanges, providing for £1,000 per RIE for each financial year of the compensation scheme (other than in the financial year in which the recognised investment exchange becomes a participant firm, when its share is nil);65335(2) for other participant firms:65533(a) identifying the base costs which the FSCS has incurred, or expects to incur, in the
CONC 12.1.4RRP

Table: Disapplied or modified modules or provisions of the Handbook

Module

Disapplication or modification

Senior Management Arrangements, Systems and Control sourcebook (SYSC)

[FCA]

SYSC 6.1.4C R (requirement of debt management firm or credit repair firm to appoint a compliance officer) does not apply to a firm with an interim permission.

SYSC 6.3.8 R (responsibility for anti-money laundering systems and controls) does not apply to a firm with only an interim permission.

SYSC 6.3.9 R (requirement to appoint a money laundering reporting officer) does not apply to a firm with only an interim permission.

Fees manual (FEES)

[FCA]

The Fees manual does not apply in respect of the fee provided for in FEES 8.1.1R (1), except for the rules and guidance in FEES 2.3 and FEES 8.1.

3Threshold Conditions (COND)

Guidance applies with necessary modifications to reflect Chapter 4 of Part 8 of the Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No 2) Order 2013 (see Note 1).

Note 1

A firm is treated as having an interim permission on and after 1 April 2014 to carry on credit-related regulated activity4 or operating an electronic system in relation to lending5 under the Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2013 if it met the conditions set out in Chapter 4 of Part 8 of that Order. Section 55B(3) of the Act (satisfaction of threshold conditions) does not require the FCA or PRA to ensure that the firm will satisfy, and continue to satisfy, in relation to the credit-related regulated activities4 or operating an electronic system in relation to lending5 for which it has an interim permission, the threshold conditions for which that regulator is responsible. The FCA or PRA can, however, exercise its power under section 55J of the Act (variation or cancellation on initiative of regulator) or under section 55L of the Act (in the case of the FCA) or section 55M of the Act (in the case of the PRA) (imposition of requirements by the regulator) in relation to a firm if, among other things, it appears to the FCA or PRA that the firm is failing, or is likely to fail, to satisfy the threshold conditions in relation to the credit-related regulated activities4 or operating an electronic system in relation to lending5 for which it has an interim permission for which the regulator is responsible. The guidance4 in COND should be read accordingly.

4444

3Client Assets (CASS)

CASS does not apply with respect to credit-related regulated activity to a firm with7:

(1)

only an interim permission; or

(2) an interim permission that is treated as a variation of permission;

if the firm acts in accordance with the provisions of paragraphs 3.42 and 3.43 of the Debt management (and credit repair services) guidance (OFT366rev) previously issued by the Office of Fair Trading, as they were in effect immediately before 1 April 2014.

77577

3Supervision manual (SUP)

SUP 3 (Auditors), SUP 10A (FCA Approved persons), SUP 10C (FCA senior managers11 regime for approved persons in SMCR firms11) and SUP 12 (Appointed representatives) (see Note 2) do not apply:

(1) to a firm with only an interim permission; or

(2) with respect to a credit-related regulated activity or operating an electronic system in relation to lending5 for which a firm has an interim permission that is treated as a variation of permission,7

except that SUP 3.10 and SUP 3.11 apply to a firm in relation to its designated investment business that comprises operating an electronic system in relation to lending.7

87

Note 2

A firm may not be a principal in relation to a regulated activity for which it has interim permission. A firm with interim permission may, however, be an appointed representative in relation to a regulated activity which it does not have interim permission to carry on (article 59 of the Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No 2) Order 2013).

SUP 6 (Applications to vary and cancel Part 4A permission and to impose, vary or cancel requirements) applies:

(1) with necessary modifications to reflect Chapter 4 of Part 8 of the Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No 2) Order 2013 (see Note 3);

(2) with the modifications to SUP 6.3.15D9 and SUP 6.4.5D9 set out in paragraph 1.2 of this Schedule.

Note 3

If a firm with interim permission applies to the appropriate regulator under section 55A of the Act for Part 4A permission to carry on a regulated activity or under section 55H or 55I of the Act to vary a Part 4A permission that the firm has otherwise than by virtue of the Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No 2) Order 2013 by adding a regulated activity to those to which the permission relates, the application may be treated by the appropriate regulator as relating also to some or all of the regulated activities for which the firm has interim permission.

SUP 11 (Controllers and close links) does not apply to a firm with only an interim permission (see Note 4).

Note 4

A firm is not to be regarded as an authorised person for the purposes of Part 12 of the Act (control over authorised person) if it has only an interim permission (see article 59 of the Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No 2) Order 2013).

For a firm with only an interim permission

(1) SUP 15.5.1 R, SUP 15.5.2 G, SUP 15.5.4 R, SUP 15.5.5 R are modified so that the words "reasonable advance", "and the date on which the firm intends to implement the change of name" and "and the date of the change" are omitted; and

(2) SUP 15.7.1 R, SUP 15.7.4 R and SUP 15.7.5A R are modified so that a notification of a change in name, address or telephone number must be made using the online Consumer Credit Interim Permissions system available on the FCA's website.

(3) If in a notification to the FCA the firm is required to enter its FRN number it must include it interim permission number.

SUP 16 (Reporting requirements) does not apply to a firm with only an interim permission except for SUP 16.14.10

7776

SUP 16.11 and SUP 16.12 apply to a firm, which was an authorised person immediately before 1 April 2014, with an interim permission that is treated as a variation of permission with respect to credit-related regulated activity or operating an electronic system in relation to lending5 as if the changes to SUP 16.11 and SUP 16.12 effected by the Consumer Credit (Consequential and Supplementary Amendments) Instrument 2014 had not been made.10

6

3Disputes Resolution: Complaints sourcebook (DISP)

DISP 1.10 (Complaints reporting rules) and DISP 1.10A (Complaints data publication rules) do not apply to a person with only an interim permission.

DISP 1.10 (Complaints reporting rules) and DISP 1.10A (Complaints data publication rules) apply to a firm, which was an authorised person immediately before 1 April 2014, with an interim permission that is treated as a variation of permission with respect to credit-related regulated activity or operating an electronic system in relation to lending5 as if the changes to DISP 1.10 and DISP 1.10A effected by the Consumer Credit (Consequential and Supplementary Amendments) Instrument 2014 had not been made.

3Consumer Credit sourcebook (CONC)

CONC 10 (Prudential requirements for debt management firms) does not apply:

(1) to a firm with only an interim permission; or

(2) with respect to credit-related regulated activity or operating an electronic system in relation to lending5 for which a firm has an interim permission that is treated as a variation of permission.

3Perimeter Guidance manual (PERG)

For a firm only with an interim permission, PERG 5.11.13 G is modified so that following the words "which does not otherwise consist of carrying on regulated activities" is added "(other than a regulated activity carried on by a firm only with an interim permission listed in article 59A of the Financial Services and Markets Act 2000 (Regulated Activities)(Amendment)(No.2) Order 2013 (SI 2013/1881) which is to be disregarded for this purpose)".

Article 59A enables a firm with only an interim permission which would be able to benefit from article 72B of the Regulated Activities Order, but for carrying on the new consumer credit regulated activities to continue to do so.
BIPRU 9.11.2RRP

Table:

This table belongs to BIPRU 9.11.1 R

2

Credit Quality step

1

2

3

4 (only for credit assessments other than short-term credit assessments)2

All other credit quality steps2

2

Securitisation positions2

2

20%

50%

100%

350%

1250%2

2Resecuritisation positions

40%

100%

225%

650%

1250%

[Note: For mapping of the credit quality step to the credit assessments of eligible ECAIs, refer to: http://www.fca.org.uk/your-fca/documents/fsa-ecais-securitisation for the FCA and http://www.bankofengland.co.uk/pra/Documents/publications/ss/2013/ss913.pdf for the PRA]

[Note: BCD, Annex IX, Part 4, point 6, Table 1]2

SUP App 3.3.14GRP
1Blanket notification is the practice of the Home State regulator notifying all Host State regulators in respect of all activities regardless of any genuine intention to carry on the activity. This practice is discouraged by the FCA and PRA11. However, a firm may be carrying on activities in the United Kingdom or elsewhere in a way that necessarily gives rise to a real possibility of the provision of services in other EEA States. In such cases, the firm should consider with its
FEES 3.1.8AGRP
Application fees for applications for and variations of Part 4A permission in respect of credit-related regulated activities are also set out in FEES 3 Annex 1F. Applications for Part 4A permission in respect of credit-related regulated activities are categorised by the 9FCA for the purposes of fee raising as straightforward, moderately complex and complex as identified in FEES 3 Annex 1, unless the application is for a limited permission.799[Note: PRA-authorised persons may also
SYSC 6.2.2GRP
(1) The term 'internal audit function' in SYSC 6.2.1R (and SYSC 4.1.11G), and for a common platform firm in article 24 of the MiFID Org Regulation,7 refers to the generally understood concept of internal audit within a firm, that is, the function of assessing adherence to and the effectiveness of internal systems and controls, procedures and policies.6(2) [deleted]10688(3) 6For an SMCR firm that is a PRA-authorised person10,the internal audit function is a PRA controlled function
CONC 3.3.6GRP
If a communication or a financial promotion names the FCA, PRA or both as the regulator of a firm and refers to matters not regulated by the FCA, PRA or both, the firm should ensure that the communication or financial promotion makes clear that those matters are not regulated by the FCA, PRA or both.
EG 7.1.3RP
3Section 415B of the Act requires the FCA to consult with the PRA before it takes certain enforcement action in relation to a PRA-authorised person or someone who has a qualifying relationship (as defined in section 415B(4) of the Act) with a PRA-authorised person. Further detail on when the FCA is required to consult the PRA, and when it has agreed to notify the PRA of certain matters, is set out in the Memorandum of Understanding between the PRA and the FCA.
INSPRU 3.1.26RRP
Where the assets of a firm invested in a significant territory for the purposes of PRA Rulebook: Non-Solvency II firms: Capital Resources Requirements, 20.10,8 represent less than 0.5% of the firm'slong-term insurance assets (excluding assets held to cover index-linked liabilities or property-linked liabilities), measured by market value, the firm may assume for those assets the market risk scenario for assets of that kind invested in the United Kingdom set out in8PRA Rulebook:
FEES 4.2.10RRP
A person need not pay a periodic fee on the date on which it is due under the relevant provision in FEES 4.2.1 R, if:(1) that date falls during a period during which circumstances of the sort set out in GEN 1.3.2 R (Emergencies) exist, and that person has reasonable grounds to believe that those circumstances impair its ability to pay the fee, in which case he must pay it on or before the fifth business day after the end of that period; or(2) unless FEES 4.3.6R (3), 9FEES 4.3.6R
SYSC 4.1.2RRP
For a common platform firm, the 3 arrangements, processes and mechanisms referred to in SYSC 4.1.1 R must be comprehensive and proportionate to the nature, scale and complexity of the risks inherent in the business model and of13 the common platform firm's activities and must take into account the specific technical criteria described in article 21(3) of the MiFID Org Regulation21, SYSC 5.1.7 R, SYSC 7 and whichever of the following is28 applicable:3817131312817(1) [deleted]28;(2)