Related provisions for PERG 6.7.11
The Listing Principles are as follows:
Listing3 Principle 1 |
A listed company must take reasonable steps to establish and maintain adequate procedures, systems and controls to enable it to comply with its obligations.3 3 |
Listing3 Principle 2 |
A listed company must deal with the FCA in an open and co-operative manner.3 3 |
Principle 3 |
[deleted]3 3 |
Principle 4 |
[deleted]3 3 |
Principle 5 |
[deleted]3 3 |
Principle 6 |
[deleted]3 3 |
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 |
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. 121417 |
(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. |
Application of different sections of SUP 16 (excluding49 SUP 16.13, SUP 16.15, 60SUP 16.22 and56 SUP 16.2656)50534266393927
(1) Section(s) |
(2) Categories of firm to which section applies |
(3) Applicable rules and guidance |
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All categories of firm except: |
Entire sections |
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(a) |
an ICVC; |
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(b) |
[deleted]51 |
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20 | |||||
49 | |||||
3 | 141439 | ||||
39 | |||||
(c) |
[deleted]51 |
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All categories of firm except: |
Entire sections |
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(-a) |
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(a) |
an ICVC; |
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(b) |
[deleted]51 |
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(c) |
[deleted]51 |
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(d) |
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(e)4 |
[deleted]4 |
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(f) |
a sole trader; |
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(g) |
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(h) |
[deleted]51 88 |
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(i)8 |
a firm with permission to carry on only retail investment activities;8 |
8 | |||
(ia)38 |
a firm with permission only to advise on P2P agreements (unless that activity is carried on exclusively with or for professional clients);38 |
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(j)8 |
a firm with permission to carry on only insurance distribution activity52, home finance mediation activity,16 or both;8 16 |
8 | |||
(ja)30 |
an FCA-authorised person with permission to carry on only credit-related regulated activity; |
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48(jb) |
a firm with permission to carry on only regulated claims management activities; |
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58(jc) |
a firm with permission to carry on only funeral plan distribution; |
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(k)8 |
a firm falling within a combination of (i), (ia), (j), (ja), (jb) and (jc)58. 30483830 |
8 | |||
46(l) |
a firm with permission to carry on only the regulated activity of administering a benchmark; |
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27 | |||||
2628 | |||||
28 | 28 | ||||
Depositary of an authorised fund41 |
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A firm subject to the requirement in SUP 16.7A.3 R or SUP 16.7A.5 R |
Sections as relevant |
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Insurer with permission to effect or carry out life policies, unless it is a non-directive friendly society3 |
Entire section |
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3Firm with permission to establish, operate or wind up a personal pension scheme or a stakeholder pension scheme14 14 |
Entire section3 |
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5 | 5 | 5 | |||
Entire section9 |
9
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(a)9 |
9 | ||||
(b)9 |
[deleted]51 2142 |
9 | |||
(c)9 |
[deleted]42 219 |
9 | |||
21(d) |
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(1) |
A firm, other than a managing agent, which is: |
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(a) |
a home finance provider; or |
Entire section |
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(b) |
an insurer; or |
Entire section |
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(c) |
the operator of a regulated collective investment scheme or an investment trust savings scheme; or |
Entire section |
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(d) |
a person who issues or manages the relevant assets of the issuer of a structured capital-at-risk product; or |
Entire section |
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(e) |
a firm with permission to enter into a regulated credit agreement as lender in respect of high-cost short-term credit or home credit loan agreements; or |
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(2) |
a firm in whom the rights and obligations of the lender under a regulated mortgage contract are vested. |
The provisions governing performance data reports in SUP 16.11 and SUP 16 Annex 21 |
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A firm undertaking the regulated activities as listed in SUP 16.12.4 R, unless exempted in SUP 16.12.1 G |
Sections as relevant to regulated activities as listed in SUP 16.12.4 R23 |
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A CASS large firm and a CASS medium firm |
Entire section29 |
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[deleted]60 34 |
5943 | ||||
A firm subject to the Money Laundering Regulations and within the scope of SUP 16.23.1R |
Entire Section |
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A firm undertaking the regulated activities in SUP 16.23A.1R51 |
Entire section |
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A firm with permission to effect or carry out contracts of insurance in relation to life and annuitycontracts of insurance45 to the extent that the firm and its business falls within the scope of SUP 16.24.1R. |
Entire Section |
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A firm with permission to carry on regulated claims management activities. |
Entire section |
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A firm which, in respect of general insurance contracts, is: |
Entire section |
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(a) |
an insurer; |
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(b) |
55a 55(i) TP firm which has temporary permission; or 55 (ii) a Gibraltar-based firm, treated as having permission, to effect contract of insurance 55 including those providing services from an establishment outside the UK with a customer in the UK55; |
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(c) |
a managing agent; or |
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(d) |
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to the extent that the firm and its business falls within the scope of SUP 16.27.7R. |
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A firm which, in respect of general insurance contracts, is: |
Entire section |
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(1) |
an insurer; |
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(2) |
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(3) |
|||||
(4) |
a TP firm; or |
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(5) |
a Gibraltar-based firm that is not a TP firm. |
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to the extent that the firm and its business falls within the scope of SUP 16.28.8R. |
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A MIFIDPRU investment firm other than in the circumstances specified in SUP 16.29.1R. |
Entire section |
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Entire section63 |
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(1) |
a firm except as specified in SUP 16.30.1R;63 |
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(2) |
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(3) |
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(4) |
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(5) |
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(6) |
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(7) |
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A firm with approver permission. |
Entire section |
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26 | |||||
27Note 2 50The application of SUP 16.13 is set out under SUP 16.13.1 G;66 the application of SUP 16.15 is set out under SUP 16.15.1 G; the application of SUP 16.16 is set out SUP 16.16.1 R and SUP 16.16.2 R the application of SUP 16.17 is set out in SUP 16.17.3 R and SUP 16.17.4 R66; and the application of SUP 16.26 is set out in SUP 16.26.1R50. 4366 |
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29Note 3 50The application of SUP 16.18 for the types of AIFMs specified in SUP 16.1.1C G is set out in SUP 16.18.2 G. 43 |
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 holding2, |
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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. |
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2(7) |
In sub-paragraph (2)(b)(ii)— “qualifying holding” means a direct or indirect holding in an investment firm which represents 10% or more of the capital or of the voting rights, as set out in Articles 9 and 10 of Directive 2004/109/EC, taking into account the conditions regarding aggregation thereof laid down in Article 12(4) and (5) of that Directive, or which makes it possible to exercise a significant influence over the management of the investment firm in which that holding subsists; “Directive 2004/109/EC” means Directive 2004/109/EC of the European Parliament and of the Council on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market. |