New PRA and FCA regimes for Approved Persons

The FSA has published a consultation paper on the PRA and FCA regimes for approved persons (CP 12/26).  CP 12/26 sets out proposed amendments to the current approved persons regime necessary to implement the new regulatory structure.  CP12/26 was prepared in consultation with the Bank of England. 

Highlights

1. Single-regulated firms

• There will be no material difference to the approved persons regime for individuals at FCA-authorised firms, also referred to as single-regulated firms (except for the extension of APER).

2. Dual-regulated firms

• The existing list of controlled functions is to be split between the PRA and FCA - see the Table in Section 2.B of the briefing.
• Even where an individual will carry on both PRA and FCA significant influence functions (SIFs), an application may need only be made to the PRA, and not to the FCA, under specified circumstances (effectively where two functions overlap).  The Tables in Section 2.B of the briefing set out these specified circumstances as well as how the approval process will work in practice.
• The existing CF2 (non-executive director function) is to be split between 2 new non-executive director functions:  CF2 (PRA) and CF2 (FCA).

3. All firms

• The Statements of Principle in APER will be extended to a wider set of activities and will not be confined to the activities related to the relevant controlled function for which approval is given.

CP 12/26 allows for a shorter consultation period than usual.  Responses to the consultation must be submitted by 7 December.  The FSA may need to consult further if significant policy changes are made to the Financial Services Bill (Bill) as it goes through the Parliamentary process.  It is currently expected that the Bill will receive Royal Assent at the end of this year.

Please click here for our detailed briefing on the consultation.