PRA Approved Persons

Part

SUP Supervision manual

Chapter

PRA Approved Persons

Printed on: 06/11/2024

Rulebook at: 19/06/2014

SUP 10B

PRA Approved Persons

SUP 10B.1

Application

01/04/2013

General

SUP 10B.1.1

This chapter applies to every PRA-authorised person.

01/04/2013

SUP 10B.1.2

This chapter is also relevant to every PRA-approved person.

01/04/2013

SUP 10B.1.3

The rules in this chapter specify descriptions of PRA controlled functions under section 59 of the Act (Approval for particular arrangements).

01/04/2013

SUP 10B.1.4

The directions in this chapter relate to the manner in which a firm must apply for the PRA's approval under section 59 of the Act and other procedures.

01/04/2013

Overseas firms: UK services

SUP 10B.1.5

This chapter does not apply to an overseas firm in relation to regulated activities which are carried on in the United Kingdom other than from an establishment maintained by it or its appointed representative in the United Kingdom.

01/04/2013

Overseas firms: UK establishments

SUP 10B.1.6

Only the following PRA controlled functions apply to an overseas firm which maintains an establishment in the United Kingdom from which regulated activities are carried on:

(1) the director function where the person performing that function:

(a) has responsibility for the regulated activities of a UK branch which are likely to enable him to exercise significant influence over that branch; or

(b) is someone whose decisions or actions are regularly taken into account by the governing body of that branch;

(2) the non-executive director function where the person performing that function:

(a) has responsibility for the regulated activities of a UK branch which is likely to enable him to exercise significant influence over that branch; or

(b) is someone whose decisions or actions are regularly taken into account by the governing body of that branch;

(3) the chief executive function;

(4) the PRA required functions;

(5) the systems and controls function.

01/04/2013

Incoming EEA firms and incoming Treaty firms

SUP 10B.1.7

This chapter does not apply to:

(1) an incoming EEA firm; or

(2) an incoming Treaty firm;

if and in so far as the question of whether a person is fit and proper to perform a particular function in relation to that firm is reserved, under any of the Single Market Directives, the Treaty or the auction regulation, to an authority in a country or territory outside the United Kingdom.

01/04/2013

SUP 10B.1.8

SUP 10B.1.7 R reflects the provisions of section 59(8) of the Act and, in relation to an incoming Treaty firm the Treaty. It preserves the principle of Home State prudential regulation. In relation to an incoming EEA firm exercising an EEA right, or an incoming Treaty firm exercising a Treaty right, the effect is to reserve to the Home State regulator the assessment of the fitness and propriety of a person performing a function in the exercise of that right. A member of the governing body, or the notified UKbranch manager, of an incoming EEA firm, acting in that capacity, will not therefore have to be approved by the PRA under the Act.

01/04/2013

SUP 10B.1.9

Notwithstanding SUP 10B.1.8 G, an incoming EEA firm (other than an EEA pure reinsurer) or incoming Treaty firm will have had to consider the impact of the Host State rules with which it is required to comply when carrying on a passported activity or Treaty activity through a branch in the United Kingdom. An incoming EEA firm (other than an EEA pure reinsurer) will have been notified of those provisions under Part II of Schedule 3 to the Act in the course of satisfying the conditions for authorisation in the United Kingdom.

01/04/2013

SUP 10B.1.10

An incoming EEA firm will have to consider, for example, the position of a branch manager based in the United Kingdom who may also be performing a function in relation to the carrying on of a regulated activity not covered by the EEA right of the firm. In so far as the function is within the description of a PRA controlled function, the firm will need to seek approval for that person to perform that PRA controlled function.

01/04/2013

Incoming EEA firms: passported activities from a branch

SUP 10B.1.11

None of the PRA controlled functions apply to an incoming EEA firm with respect to its passported activities carried on from a branch in the United Kingdom.

01/04/2013

Incoming EEA firms etc with top-up permission activities from a UK branch

SUP 10B.1.12

In relation to the activities of a firm for which it has a top-up permission, only the PRA required functions apply.

01/04/2013

Committees of the Society of Lloyd's

SUP 10B.1.13

For the purpose of SUP 10B.6.1 R (the director function), "director" includes an executive member of a committee to which the Council of the Society of Lloyd's directly delegates authority to carry out the Society's regulatory functions.

01/04/2013

SUP 10B.1.14

For the purpose of SUP 10B.6.3 R (the non-executive director function), "non-executive director" includes a non-executive member of a committee to which the Council of the Society of Lloyd's directly delegates authority to carry out the Society's regulatory functions.

01/04/2013

Insolvency practitioners

SUP 10B.1.15

This chapter does not apply to a function performed by:

(1) a person acting as an insolvency practitioner within the meaning of section 388 of the Insolvency Act 1986; or

(2) a person acting as a nominee in relation to a voluntary arrangement under Parts I (Company Voluntary Arrangements) and VIII (Individual Voluntary Arrangements) of the Insolvency Act 1986; or

(3) a person acting as an insolvency practitioner within the meaning of Article 3 of the Insolvency (Northern Ireland) Order 1989; or

(4) a person acting as a nominee in relation to a voluntary arrangement under Parts II (Company Voluntary Arrangements) and VIII (Individual Voluntary arrangements) of the Insolvency (Northern Ireland) Order 1989.

01/04/2013

Appointed representatives

SUP 10B.1.16

The PRA has no special rule relating to appointed representatives. Therefore, SUP 10B applies to an appointed representative of a firm in the same way as it does to any other contractor of the firm (see SUP 10B.3.1 R). In practice in SUP 10B the main application to appointed representatives of a firm will be to people seconded by the appointed representative to the firm.

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SUP 10B.2

Purpose

01/04/2013

SUP 10B.2.1

The immediate purpose of SUP 10B.3 to SUP 10B.9 is to specify, under section 59 of the Act, descriptions of the PRA controlled functions which are listed in SUP 10B.4.3 R. The underlying purpose is to establish, and mark the boundaries of, the PRA's "approved persons regime".

01/04/2013

SUP 10B.3

Basic rules for all PRA controlled functions

01/04/2013

The need for an arrangement

SUP 10B.3.1

A function is a PRA controlled function only to the extent that it is performed under an arrangement entered into by:

(1) a firm; or

(2) a contractor of the firm;

in relation to the carrying on by the firm of a regulated activity.

01/04/2013

SUP 10B.3.2

Sections 59(1) and (2) of the Act provide that approval is necessary in respect of a PRA controlled function which is performed under an arrangement entered into by a firm, or its contractor (typically an appointed representative), in relation to a regulated activity.

01/04/2013

SUP 10B.3.3

Arrangement is defined in section 59(10) of the Act as any kind of arrangement for the performance of a function which is entered into by a firm or any of its contractors with another person and includes the appointment of a person to an office, his becoming a partner, or his employment (whether under a contract of service or otherwise). For the provisions in this chapter relating to outsourcing, see SUP 10B.11.6 G and SUP 10B.11.7 G.

01/04/2013

SUP 10B.3.4

If, however, a firm is a member of a group, and the arrangements for the performance of a PRA controlled function of the firm are made by, say, the holding company, the person performing the function will only require approval if there is an arrangement (under section 59(1)) or a contract (under section 59(2)) between the firm and holding company permitting this. This need not be a written contract but could arise, for example, by conduct, custom and practice.

01/04/2013

SUP 10B.3.5

The arrangement must be "in relation to" the carrying on of a regulated activity. Regulated activities are defined in the Glossary by reference to the Regulated Activities Order. This order prescribes the activities which are regulated activities for the purposes of the Act.

01/04/2013

Significant-influence functions

SUP 10B.3.6

Each PRA controlled function is one which comes within the definition of a significant-influence function.

01/04/2013

SUP 10B.3.7

Section 59(6) of the Act says that the PRA may specify a description of function as a PRA controlled function only if, in relation to the carrying on of a regulated activity by a firm, it is satisfied that the function is a significant-influence function.

01/04/2013

SUP 10B.3.8

Section 59(7B) of the Act says that a significant-influence function, in relation to the carrying on of a regulated activity by a firm, means a function that is likely to enable the person responsible for its performance to exercise a significant influence on the conduct of the firm's affairs, so far as relating to the activity.

01/04/2013

SUP 10B.3.9

SUP 10B.3.6 R gives effect to sections 59(6) and 59(7B) of the Act.

01/04/2013

SUP 10B.3.10

Whether a function is likely to result in the person responsible for its performance exercising significant influence on the conduct of the firm's affairs is a question of fact in each case. The PRA has identified the PRA controlled functions as satisfying this condition.

01/04/2013

Actions for damages

SUP 10B.3.11

A contravention of the rules in SUP 10B (other than SUP 10B.1 to SUP 10B.9) gives rise to a right of action by a private person under section 138D of the Act (and each of those rules is specified under section 138D(1) of the Act as a provision giving rise to such a right of action).

01/04/2013

SUP 10B.4

Specification of functions

01/04/2013

SUP 10B.4.1

Each of the functions described in SUP 10B.4.3 R (the table of PRA controlled functions) is a PRA controlled function.

01/04/2013

SUP 10B.4.2

The fact that a person may be approved for one purpose does not have the effect of bringing all his activities within that PRA controlled function.

01/04/2013

SUP 10B.4.3

PRA controlled functions

Type

Description of PRA controlled function

PRA governing functions

Director function

Non-executive director function

Chief executive function

Partner function

Director of unincorporated association function

Small friendly society function

PRA required functions

Actuarial function

12A

With-profits actuary function

12B

Lloyd's actuary function

Systems and controls function

01/04/2013

SUP 10B.5

Temporary vacancies

01/04/2013

SUP 10B.5.1

If:

(1) a firm appoints an individual to perform a function which, but for this rule, would be a PRA controlled function;

(2) the appointment is to provide cover for an approved person whose absence is:

(a) temporary; or

(b) reasonably unforeseen; and

(3) the appointment is for less than 12 weeks in a consecutive 12-month period;

the description of the relevant PRA controlled function does not relate to those activities of that individual.

01/04/2013

SUP 10B.5.2

SUP 10B.5.1 R enables cover to be given for holidays and emergencies and avoids the need for the precautionary approval of, for example, a deputy. However, as soon as it becomes apparent that a person will be performing a PRA controlled function for more than 12 weeks, the firm should apply for approval.

01/04/2013

SUP 10B.6

PRA governing functions

01/04/2013

Director function (CF1)

SUP 10B.6.1

If a firm is a body corporate (other than a limited liability partnership), the director function is the function of acting in the capacity of a director (other than non-executive director) of that firm.

01/04/2013

SUP 10B.6.2

(1) If a firm is a body corporate (other than a limited liability partnership), the director function is also the function of acting in the capacity of a person:

(a) who is a director, partner, officer, member (if the parent undertaking or holding company is a limited liability partnership), senior manager, or employee of a parent undertaking or holding company of the firm; and

(b) whose decisions or actions are regularly taken into account by the governing body of the firm.

(2) (1) does not apply if that parent undertaking or holding company has a Part 4A permission or is regulated by an EEA regulator.

(3) (1) does not apply to the function falling into SUP 10B.6.4 R (non-executive director of the parent undertaking or holding company).

01/04/2013

Non-executive director function

SUP 10B.6.3

If a firm is a body corporate, the non-executive director function is the function of acting in the capacity of a non-executive director of that firm.

01/04/2013

SUP 10B.6.4

(1) If a firm is a body corporate, the non-executive director function is also the function of acting in the capacity of a person:

(a) who is a non-executive director of a parent undertaking or holding company; and

(b) whose decisions or actions are regularly taken into account by the governing body of the firm.

(2) However, (1) does not apply if that parent undertaking or holding company has a Part 4A permission or is regulated by an EEA regulator.

01/04/2013

SUP 10B.6.5

If a firm is a long-term insurer, the non-executive director function is also the function of acting in the capacity of an individual who, as a member of a committee having the purpose of a with-profits committee, has responsibility in relation to governance arrangements for with-profits business under COBS 20.3 (Principles and Practices of Financial Management). This does not apply to an individual performing the director function.

01/04/2013

SUP 10B.6.6

A firm should notify the PRA if a person moves between certain roles making up the non-executive director function (SUP 10B.12.6 R).

01/04/2013

Chief executive function (CF3)

SUP 10B.6.7

The chief executive function is the function of acting in the capacity of a chief executive of a firm.

01/04/2013

SUP 10B.6.8

This function is having the responsibility, alone or jointly with one or more others, under the immediate authority of the governing body:

(1) for the conduct of the whole of the business (or relevant activities); or

(2) in the case of a branch in the United Kingdom of an overseas firm, for the conduct of all of the activities subject to the UK regulatory system.

01/04/2013

SUP 10B.6.9

For a branch in the United Kingdom of an overseas firm, the PRA would not normally expect the overseas chief executive of the firm as a whole to be approved for this function where there is a senior manager under him with specific responsibility for those activities of the branch which are subject to the UK regulatory system. In some circumstances, the person within the firm responsible for UK operations may, if the function is likely to enable him to exercise significant influence over the branch, also perform the chief executive function.

01/04/2013

SUP 10B.6.10

A person performing the chief executive function may be a member of the governing body but need not be. If the chairman of the governing body is also the chief executive, he will be discharging this function. If the responsibility is divided between more than one person but not shared, there is no person exercising the chief executive function. But if that responsibility is discharged jointly by more than one person, each of those persons will be performing the chief executive function.

01/04/2013

SUP 10B.6.11

Note that a body corporate may be a chief executive. If so, it will need to be approved to perform the chief executive function.

01/04/2013

Partner function (CF4)

SUP 10B.6.12

If a firm is a partnership, the partner function is the function of acting in the capacity of a partner in that firm.

01/04/2013

SUP 10B.6.13

If a firm is a limited liability partnership, the partner function extends to the firm as if the firm were a partnership and a member of the firm were a partner.

01/04/2013

SUP 10B.6.14

If a partnership is registered under the Limited Partnership Act 1907, the partner function does not extend to any function performed by a limited partner.

01/04/2013

Director of unincorporated association function (CF5)

SUP 10B.6.15

If a firm is an unincorporated association, the Director of unincorporated association function is the function of acting in the capacity of a director of the unincorporated association.

01/04/2013

Small friendly society function (CF6)

SUP 10B.6.16

(1) If a firm is a non-directive friendly society, the small friendly society function is the function of directing its affairs, either alone or jointly with others.

(2) If the principal purpose of the firm is to carry on regulated activities, each person with responsibility for directing its affairs performs the PRA controlled function.

(3) If the principal purpose of the firm is other than to carry on regulated activities, a person performs the small friendly society function only to the extent that he has responsibility for a regulated activity.

01/04/2013

SUP 10B.6.17

(1) Each person on the non-directive friendly society's governing body will be taken to have responsibility for its regulated activities, unless the firm has apportioned this responsibility to one particular individual to whom it is reasonable to give this responsibility.

(2) The individual need not be a member of the governing body.

01/04/2013

SUP 10B.6.18

(1) Typically a non-directive friendly society will appoint a "committee of management" to direct its affairs. However, the governing arrangements may be informal and flexible. If this is the case, the PRA would expect the society to resolve to give responsibility for the carrying on of regulated activities to one individual who is appropriate in all the circumstances. That individual may, for example, have the title of chief executive or similar. The individual would have to be a PRA-approved person under SUP 10B.6.16 R.

(2) The PRA expects that any apportionment of responsibilities will have taken place under SYSC 2.1.1 R. The PRA may ask to see details of the apportionment but will not require, as a matter of course, a copy of the material which records this (see SYSC 2.2).

01/04/2013

Insurance mediation

SUP 10B.6.19

A firm carrying on insurance mediation activity, other than a sole trader, must allocate to a director or senior manager the responsibility for the firm's insurance mediation activity (MIPRU 2.2.1 R). MIPRU 2.2.2R (1) provides that the firm may allocate this responsibility to one or more of the persons performing a governing function (other than the non-executive director function).

01/04/2013

SUP 10B.6.20

Where a person performing a governing function is also responsible for the firm's insurance mediation activity, the words "(insurance mediation)" will be inserted after the relevant PRA controlled function (see MIPRU 2.2.5 G).

01/04/2013

SUP 10B.7

Other functions included in the governing functions

01/04/2013

Systems and controls function

SUP 10B.7.1

Each of the PRA governing functions includes, where apportioned under SYSC 2.1.1 R, SYSC 4.3.1 R or SYSC 4.4.3 R, the systems and controls function. This does not apply to the non-executive director function or the function described in SUP 10B.6.2 R.

01/04/2013

SUP 10B.7.2

The effect of SUP 10B.7.1 R is that a person who is approved to perform a PRA governing function (other than the non-executive director function or the function described in SUP 10B.6.2 R) will not have to be specifically approved to perform the systems and controls function. A person who is approved to perform a PRA governing function will have to be additionally approved before he can perform any of the PRA required functions.

01/04/2013

The FCA's apportionment and oversight function (CF8)

SUP 10B.7.3

If:

(1) a person has been approved to perform a PRA governing function in relation to a firm and that approval is still in force;

(2) that person is also performing a function that falls within the apportionment and oversight function in relation to that firm (or would do so except for SUP 10A.11.11 R (FCA rule disapplying the apportionment and oversight function in relation to a person approved by the PRA to perform a governing function)); and

(3) that person is not the subject of a current FCA approved person approval for the apportionment and oversight function in relation to that firm;

that PRA governing function includes the apportionment and oversight function (or, if there is more than one such PRA governing function, each them does).

01/04/2013

SUP 10B.7.4

If in relation to a firm:

(1) SUP 10B.7.3 R has applied to a PRA-approved person;

(2) that person has ceased to perform any PRA governing function (ignoring the expansion of that function by SUP 10B.7.3 R); and

(3) that person is still performing what would otherwise be the apportionment and oversight function;

SUP 10B.7.3 R continues to apply for three months after that PRA-approved person would otherwise have ceased to perform the PRA controlled function or, if sooner, until the FCA has approved the performance by that person of the apportionment and oversight function in relation to the firm.

01/04/2013

SUP 10B.7.5

An example of the way SUP 10B.7.4 R works is this. Say that a person (A) is appointed as director and the person who performs the apportionment and oversight function. A will be performing the director function but will not be performing the apportionment and oversight function. Say that later A gives up his role as director but remains as the person who performs apportionment and oversight function. If SUP 10B.7.4 R (and the corresponding parts of the FCA's Handbook) did not apply the result would be that A would cease to perform a PRA controlled function but would start performing the apportionment and oversight function before A had a chance to apply to the FCA for approval. The combined effect of SUP 10B.7.4 R and SUP 10A.11 of the FCA's Handbook is that the firm has three months to secure approval by the FCA for A's performance of the apportionment and oversight function and during that interim period A keeps his status as a PRA-approved person.

01/04/2013

SUP 10B.7.6

Further details of how SUP 10B.7.3 R and SUP 10B.7.4 R work can be found in SUP 10A.11 of the FCA's Handbook.

01/04/2013

SUP 10B.8

PRA required functions

01/04/2013

Actuarial function (CF12)

SUP 10B.8.1

The actuarial function is the function of acting in the capacity of an actuary appointed by a firm under SUP 4.3.1 R to perform the duties set out in SUP 4.3.13 R.

01/04/2013

With-profits actuary function (CF12A)

SUP 10B.8.2

The with-profits actuary function is the function of acting in the capacity of an actuary appointed by a firm under SUP 4.3.1 R to perform the duties set out in SUP 4.3.16A R.

01/04/2013

Lloyd's actuary function (CF12B)

SUP 10B.8.3

The Lloyd's actuary function is the function of acting in the capacity of the actuary appointed under SUP 4.6.1 R to perform the duties set out in SUP 4.6.7 R.

01/04/2013

SUP 10B.9

Systems and controls function

01/04/2013

Systems and controls function (CF28)

SUP 10B.9.1

The systems and controls function is the function of acting in the capacity of an employee of the firm with responsibility for reporting to the governing body of a firm, or the audit committee (or its equivalent) in relation to:

(1) its financial affairs;

(2) setting and controlling its risk exposure (see SYSC 3.2.10 G and SYSC 7.1.6 R ); and

(3) adherence to internal systems and controls, procedures and policies (see SYSC 3.2.16 G and SYSC 6.2 ).

01/04/2013

SUP 10B.9.2

The systems and controls function does not apply in relation to bidding in emissions auctions carried on by a firm that is exempt from MiFID under article 2(1)(i).

01/04/2013

SUP 10B.9.3

Where an employee performs the systems and controls function the PRA would expect the firm to ensure that the employee had sufficient expertise and authority to perform that function effectively. A director or senior manager would meet this expectation.

01/04/2013

SUP 10B.10

Procedures relating to PRA-approved persons

01/04/2013

Forms

SUP 10B.10.1

The forms listed in SUP 10B.10.2 G are referred to in SUP 10B.11 (Application for approval and withdrawing an application for approval) to SUP 10B.14 (How to apply for approval and give notifications).

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SUP 10B.10.2

Table PRA-approved persons forms

Form

Purpose

Handbook requirement

the relevant Form A

The relevant online form on the FCA's and PRA's ONA system or the form in SUP 10B Annex 4D (See Note)

Application to perform controlled functions under the approved persons regime

SUP 10B.11.4 D

Form B

SUP 10B Annex 5R

Notice to withdraw an application to perform controlled functions under the approved persons regime

SUP 10B.11.20 R

Form C

SUP 10B Annex 6R

Notice of ceasing to perform controlled functions

SUP 10B.12.10 R

Form D

SUP 10B Annex 7R

Notification of changes in personal information or application details

SUP 10B.12.16 R

Form E

The relevant online form on the FCA's and PRA's ONA system or the form in SUP 10B Annex 8D (See Note)

Internal transfer of an approved person

SUP 10B.12.4 D

Note: The form in the SUP annex shown is to be used by credit unions, and by other firms only in the event of a failure of the information technology systems used by the PRA. See the relevant "Handbook requirement".

01/04/2013

SUP 10B.10.3

A summary of the forms and their purposes is in SUP 10B Annex 2G.

01/04/2013

SUP 10B.10.4

Unless the context otherwise requires, in SUP 10B.10 (Procedures relating to PRA-approved person) to SUP 10B.14 (How to apply for approval and give notifications) where reference is made to a firm, this also includes an applicant for Part 4A permission, and other persons seeking to carry on regulated activities as an authorised person.

01/04/2013

SUP 10B.10.5

Forms B, C, D and E can only be submitted in respect of a PRA-approved person by the firm that submitted a PRA-approved person's original application (the relevant Form A).

01/04/2013

SUP 10B.10.6

Copies of Forms A, B, C, D and E may be obtained from the PRA's website. Credit unions can obtain copies by email at PRA-ApprovedPersons@bankofengland.co.uk. To contact the PRA for general approved persons enquiries please contact PRA Firm Enquiries:

(1) telephone: +44 (0) 20 3461 7000; or

(2) write to:
PRA Firm Enquiries
Prudential Regulation Authority
20 Moorgate
London EC2R 6DA; or

(3) e-mail: PRA-ApprovedPersons@bankofengland.co.uk.

01/04/2013

SUP 10B.11

Application for approval and withdrawing an application for approval

01/04/2013

When to apply for approval

SUP 10B.11.1

In accordance with section 59 of the Act (Approval for particular arrangements), where a candidate will be performing one or more PRA controlled functions, a firm must take reasonable care to ensure that the candidate does not perform these functions unless he has prior approval from the PRA with the consent of the FCA.

01/04/2013

SUP 10B.11.2

Under section 59B of the Act (Role of FCA in relation to PRA decisions) the FCA may arrange with the PRA that in agreed kinds of cases there is no need for the consent of the FCA. There are currently no such arrangements in place.

01/04/2013

Failure to apply for approval

SUP 10B.11.3

If a person performs a PRA controlled function without approval it is not only the firm that is accountable. Under section 63A of the Act (Power to impose penalties) if the PRA is satisfied that:

(1) a person ("P") has at any time performed a PRA controlled function without approval; and

(2) at that time P knew, or could reasonably be expected to have known, that P was performing a PRA controlled function without approval;

it may impose a penalty on P of such amount as it considers appropriate.

01/04/2013

How to apply for approval

SUP 10B.11.4

An application by a firm for the PRA's approval under section 59 of the Act (Approval for particular arrangements) must be made by completing Form A (except where SUP 10B.12.4 D requires a Form E).

01/04/2013

SUP 10B.11.5

SUP 10B.14.1 D explains how applications should be submitted.

01/04/2013

Who should make the application?

SUP 10B.11.6

(1) In accordance with section 60 of the Act (Applications for approval), applications must be submitted by, or on behalf of, the firm itself, not by:

(a) the PRA candidate; or

(b) (where the PRA candidate works for the firm's parent undertaking or holding company) by the firm's parent undertaking or holding company.

(2) Usually this will be the firm that is employing the PRA candidate to perform the PRA controlled function. Where a firm has outsourced the performance of a PRA controlled function, the details of the outsourcing determine where responsibility lies and whom the PRA anticipates will submit PRA-approved persons application forms. SUP 10B.11.7 G describes some common situations. The firm which is outsourcing is referred to as "A" and the person to whom the performance of the PRA controlled function has been outsourced, or which makes the arrangement for the PRA controlled function to be performed, is referred to as "B". In each situation, A must take reasonable care to ensure that, in accordance with section 59(2) of the Act, no person performs a PRA controlled function under an arrangement entered into by its contract or in relation to the carrying on by A of a regulated activity, without approval from the PRA. See also SYSC 3.2.4 G and SYSC 8.1.1 R, and SYSC 13.9 for insurers.

01/04/2013

SUP 10B.11.7

Outsourcing arrangements

Submitting form

Firm A to Firm B

The PRA will consider A to have taken reasonable care if it enters into a contract with B under which B is responsible for ensuring that the relevant PRA controlled functions are performed by PRA-approved persons, and that it is reasonable for A to rely on this

Firm B submits PRA-approved persons forms on behalf of Firm A

Outsourcing by A to B (both being a member of the same United Kingdom group and each having its registered office in the United Kingdom)

See SUP 10B.3.4 G

If a firm is a member of a group which includes more than one firm, any one undertaking in the group may notify the PRA on behalf of all firms in the group to which the notification applies. In this way, that undertaking may satisfy the obligation of all relevant firms in the group to notify the PRA. Nevertheless, the obligation to make the notification remains the responsibility of the individual firm itself.

(i) A to B, where B is a non-authorised person not part of the same group as A
(ii) A to B, where A is a branch of an overseas firm in the United Kingdom, and B is an overseas undertaking of the same group
(iii) A to B, where A is a UK authorised subsidiary of an overseas firm, and B is an overseas undertaking of the same group

Responsibility for (as opposed to the performance of) any activity outsourced to B will remain with A. See SYSC 3.2.4 G and SYSC 8

A ensures that an individual approved under one of the PRA controlled functions has responsibility for the outsourced arrangement and A submits a form in relation to that individual

19/06/2014

Processing an application

SUP 10B.11.8

The Act sets out the time that the PRA has to consider an application and come to a decision.

01/04/2013

SUP 10B.11.9

In any case where the application for approval is made by a person applying for permission under Part 4A of the Act the PRA has until the end of whichever of the following periods ends last:

(1) the period within which an application for that permission must be determined; and

(2) the period of three months from the time it receives a properly completed application.

01/04/2013

SUP 10B.11.10

In any other case it is the period of three months from the time it receives a properly completed application.

01/04/2013

SUP 10B.11.11

Application forms must always be completed fully and honestly. Further notes on how to complete the form are contained in each form. If forms are not completed fully and honestly, applications will be subject to investigation and the PRA candidate's suitability to be approved to undertake a PRA controlled function will be called into question. A person who provides information to the PRA that is false or misleading may commit a criminal offence, and could face prosecution under section 398 of the Act regardless of the status of their application.

01/04/2013

SUP 10B.11.12

The PRA will as soon as practicable notify the FCA of the receipt of an application to the PRA. There is no need for the firm to copy the application to the FCA.

01/04/2013

SUP 10B.11.13

Before making a decision to grant the application or give a warning notice, the PRA may ask the firm for more information about the PRA candidate. If it does this, the period in which the PRA must determine a completed application:

(1) will stop on the day the PRA requests the information; and

(2) will start running again on the day on which the PRA finally receives all the requested information.

01/04/2013

SUP 10B.11.14

The FCA may also ask the firm for more information about the PRA candidate. If it does this, the period in which the PRA must determine a completed application is extended in the same way as it is if the PRA asks for the information.

01/04/2013

SUP 10B.11.15

The PRA may only grant an application (and the FCA may only give its consent) if it is satisfied that the PRA candidate is a fit and proper person to perform the PRA controlled function stated in the application form. Responsibility lies with the firm making the application to satisfy the PRA and the FCA that the PRA candidate is fit and proper to perform the PRA controlled function applied for.

01/04/2013

SUP 10B.11.16

For further guidance on criteria for assessing whether a PRA candidate is fit and proper, see FIT.

01/04/2013

Decisions on applications

SUP 10B.11.17

The PRA must either grant the application or, if it proposes not to grant an application, issue a warning notice.

01/04/2013

SUP 10B.11.18

Whenever it grants an application, the PRA will confirm this in writing to all interested parties.

01/04/2013

SUP 10B.11.19

If the PRA proposes to refuse an application in relation to one or more PRA controlled functions, it must follow the procedures for issuing warning and decision notices.

01/04/2013

Withdrawing an application for approval

SUP 10B.11.20

A firm applying to withdraw an application for approval must notify the PRA, using Form B, in the form set out in SUP 10B Annex 5R.

01/04/2013

SUP 10B.11.21

Under section 61(5) of the Act (Determination of applications), the firm may withdraw an application only if it also has the consent of the PRA candidate and the person by whom the PRA candidate is or would have been employed, if this is not the firm making the application.

01/04/2013

SUP 10B.11.22

The PRA will as soon as practicable notify the FCA of the receipt of a notice of withdrawal. There is no need for the firm to copy the notice to the FCA.

01/04/2013

SUP 10B.12

Changes to a PRA-approved person's details

01/04/2013

Moving within a firm

SUP 10B.12.1

A PRA-approved person's job may change from time to time as a result, for instance, of a change in personal job responsibilities or a firm's regulated activities. Where the changes will involve the person performing one or more PRA controlled functions different from those for which approval has already been granted, then an application must be made to the PRA for approval for the person to perform those PRA controlled functions. The firm must take reasonable care to ensure that an individual does not begin performing a PRA controlled function until the PRA has granted approved person status to that individual in respect of that PRA controlled function. Similarly, a firm must get the PRA's approval if a person is to start performing a PRA controlled function in relation to that firm when he already has the FCA's approval to perform an FCA controlled function in relation to that firm.

01/04/2013

SUP 10B.12.2

If an FCA-approved person or a PRA-approved person is ceasing to perform FCA controlled functions or PRA controlled functions, as well as applying for approval in respect of PRA controlled functions, SUP 10B.12.4 D generally applies. Further details can be found in SUP 10B Annex 2G.

01/04/2013

SUP 10B.12.3

If a person is to perform a PRA controlled function for a firm for which he already performs a PRA controlled function or FCA controlled function as an approved person but he is not at the same time ceasing to perform an FCA controlled function or PRA controlled function, a firm should use Form A rather than Form E. It is not mandatory to complete all parts of the form. See the notes relevant to each form for full details.

01/04/2013

SUP 10B.12.4

(1) A firm must use Form E where an approved person is both ceasing to perform one or more controlled functions and needs to be approved in relation to one or more PRA controlled functions within the same firm or group.

(2) A firm must not use Form E if the approved person has never before been approved to perform a significant influence function for any firm or has not been the subject of a current approved person approval from the FCA or PRA to perform a significant influence function in relation to any firm for more than six months.

(3) A firm must not use Form E if a notification has been made or should be made under SUP 10B.12.18 R (Changes in fitness to be notified under Form D) or SUP 10A.14.17 R (the equivalent FCA rule) in relation to any controlled functions that, that person is ceasing to perform (as referred to in (1)) or any controlled function that he is continuing to perform in relation to that firm or a firm in the same group.

01/04/2013

SUP 10B.12.5

SUP 10B.14.1 D explains how applications should be submitted.

01/04/2013

SUP 10B.12.6

If a person is performing the non-executive director function in relation to a firm, the firm must notify the PRA as soon as possible if that person begins to perform or ceases to perform any of the following functions:

(1) the function of acting in the capacity of the chairman of the governing body of the firm; or

(2) the function of acting as a non-executive director who has been appointed by the non-executive directors to act as the senior independent director of that firm; or

(3) the function of acting in the capacity of the chairman of the governing body risk committee of the firm (if there is such a committee). For these purposes, the governing body risk committee means the committee described in SYSC 21.1.5 G; or

(4) the function of acting in the capacity of the chairman of the audit committee of the governing body of the firm (if there is such a committee); or

(5) the function of acting in the capacity of the chairman of the remuneration committee of the governing body of the firm (if there is such a committee).

Any such notification must be e-mailed to the PRA's approved persons mailbox at PRA-ApprovedPersons@bankofengland.co.uk

01/04/2013

SUP 10B.12.7

So for example if a non-executive director moves from being chair of the audit committee to chair of the risk committee or adds the role of chair of the audit committee to his existing role as chair of the risk committee he does not require approval from the PRA. However, the firm should notify the PRA of that change as soon as possible. If a person stops performing the non-executive director function altogether, SUP 10B.12.4 D or SUP 10B.12.10 R apply instead.

01/04/2013

Moving between firms

SUP 10B.12.8

If it is proposed that a PRA-approved person will no longer be performing a PRA controlled function under an arrangement entered into by one firm or one of its contractors, but will be performing the same or a different PRA controlled function under an arrangement entered into by a new firm or one of its contractors (whether or not the new firm is in the same group as the old firm), the new firm will be required to make a fresh application for the performance of the PRA controlled function by that person.

01/04/2013

SUP 10B.12.9

In certain circumstances, when the PRA already has the information it would usually require, a shortened version of the relevant Form A may be completed. See the notes relevant to each form for full details.

01/04/2013

Ceasing to perform a PRA controlled function

SUP 10B.12.10

A firm must submit to the PRA a completed Form C, in the form set out in SUP 10B Annex 6R no later than seven business days after a PRA-approved person ceases to perform a PRA controlled function. This does not apply if the firm has already notified the PRA of the proposal to do that using Form E in accordance with this chapter or has notified the FCA of the proposal to do using the FCA's Form E in accordance with SUP 10A of the FCA's Handbook.

01/04/2013

SUP 10B.12.11

SUP 10B.14.1 D explains how notifications should be submitted.

01/04/2013

SUP 10B.12.12

(1) A firm must notify the PRA as soon as practicable after it becomes aware, or has information which reasonably suggests, that it will submit a qualified Form C in respect of a PRA-approved person.

(2) Form C is qualified if the information it contains:

(a) relates to the fact that the firm has dismissed, or suspended, the PRA-approved person from its employment; or

(b) relates to the resignation by the PRA-approved person while under investigation by the firm, the PRA or any other regulatory body; or

(c) otherwise reasonably suggests that it may affect the PRA's assessment of the PRA-approved person's fitness and propriety.

01/04/2013

SUP 10B.12.13

Notification under SUP 10B.12.12 R may be made by telephone, fax or email and should be made, where possible, within one business day of the firm becoming aware of the information. If the firm does not submit Form C, it should inform the PRA in due course of the reason. This could be done using Form D, if appropriate.

01/04/2013

SUP 10B.12.14

A firm is responsible for notifying the PRA if any PRA-approved person has ceased to perform a PRA controlled function under an arrangement entered into by its appointed representative or former appointed representative.

01/04/2013

SUP 10B.12.15

A firm can submit Form C or Form E to the PRA in advance of the cessation date. When a person ceases the arrangement under which he performs a PRA controlled function, he will automatically cease to be a PRA-approved person in relation to that PRA controlled function. A person can only be a PRA-approved person in relation to a specific PRA controlled function. Therefore, a person is not a PRA-approved person during any period between ceasing to perform one PRA controlled function (when he is performing no other PRA controlled function) and being approved in respect of another PRA controlled function.

01/04/2013

Changes to a PRA-approved person's personal details

SUP 10B.12.16

If a PRA-approved person's title, name or national insurance number changes, the firm for which the person performs a PRA controlled function must notify the PRA on Form D, in the form set out in SUP 10B Annex 7R, of that change within seven business days of the firm becoming aware of the matter.

01/04/2013

SUP 10B.12.17

The duty to notify in SUP 10B.12.16 R does not apply to changes to a PRA-approved person's private address.

01/04/2013

SUP 10B.12.18

If a firm becomes aware of information which would reasonably be material to the assessment of a PRA-approved person's, or a PRA candidate's, fitness and propriety (see FIT), it must inform the PRA on Form D, or (if it is more practical to do so and with the prior agreement of the PRA) by fax or e-mail, as soon as practicable.

01/04/2013

SUP 10B.12.19

SUP 10B.14.2 R applies to the submission of Form D.

01/04/2013

SUP 10B.12.20

Failing to disclose relevant information to the PRA may be a criminal offence under section 398 of the Act.

01/04/2013

SUP 10B.12.21

The duty to notify in SUP 10B.12.18 R extends to any circumstances that would normally be declared when giving the information required for section 5 of Form A or matters considered in FIT 2.

01/04/2013

SUP 10B.12.22

(1) If, in relation to a firm which has completed the relevant Form A (SUP 10B Annex 4D), any of the details relating to arrangements and PRA controlled functions are to change, the firm must notify the PRA on Form D (SUP 10B Annex 7R).

(2) The notification under (1) must be made as soon as reasonably practicable after the firm becomes aware of the proposed change.

(3) This also applies in relation to a PRA controlled function for which an application was made using Form E.

(4) This rule also applies to a firm in respect of an approved person, to whom the grandfathering arrangements relating to the coming into force of the Act applied as if the firm had completed the relevant Form A for that person.

01/04/2013

SUP 10B.13

References and accurate information

01/04/2013

References

SUP 10B.13.1

(1) If a firm (A):

(a) is considering appointing a person to perform any PRA controlled function;

(b) requests another firm (B), as a current or former employer of that person, for a reference or other information in connection with that appointment; and

B must, as soon as reasonably practicable, give to A all relevant information of which it is aware.

(2) When giving the information to A under (1), B must have regard to the purpose of the request and in particular to:

(a) any outstanding liabilities of that person from commission payments;

(b) any relevant outstanding or upheld complaint from an eligible complainant against that person;

(c) section 5 of the relevant Form A in SUP 10B Annex 4 (Application to perform controlled functions under approved persons regime);

(d) FIT 2 (Main assessment criteria); and

(e) if SUP 16.8.1 G (1) (Persistency reports from insurers and data reports on stakeholder pensions) applies to B, the persistency of any life policies sold by that person.

01/04/2013

SUP 10B.13.2

The requirement in SUP 10B.13.1R (1) for firm (B) to give to firm (A) all relevant information of which it is aware concerning a person firm A is considering appointing to perform any of the PRA controlled functions, also applies where firm A has outsourced the collection of that information to another (unregulated) third party, where firm B has been made aware that the unregulated third party is acting on behalf of firm A.

01/04/2013

SUP 10B.13.3

A firm supplying a reference in accordance with SUP 10B.13.1 R owes a duty to its former employee and the recipient firm to exercise due skill and care in the preparation of the reference. The reference should be accurate and based on documented fact. The firm may give frank and honest views, but only after taking reasonable care both as to factual content, and as to the opinions expressed, and verifying the information upon which they are based.

01/04/2013

The need for complete and accurate information

SUP 10B.13.4

The obligations to supply information to:

(1) the PRA under either SUP 10B.12.10 R or SUP 10B.12.12 R; or

(2) another firm under SUP 10B.13.1 R;

apply notwithstanding any agreement (for example a 'COT 3' Agreement settled by the Advisory, Conciliation and Arbitration Service (ACAS)) or any other arrangements entered into by a firm and an employee upon termination of the employee's employment. A firm should not enter into any such arrangements or agreements that could conflict with its obligations under this section.

01/04/2013

SUP 10B.13.5

Failing to disclose relevant information to the PRA may be a criminal offence under section 398 of the Act.

01/04/2013

SUP 10B.14

How to apply for approval and give notifications

01/04/2013

SUP 10B.14.1

(1) This direction applies to an application under Form A or Form E.

(2) An application by a firm other than a credit union must be made by submitting the Form online at http://fshandbook.info/FS/html/PRA/SUP/10B/14 using the form specified on the FCA's and PRA's ONA system.

(3) An application by a credit union must be made using the form in SUP 10B Annex 4D or SUP 10B Annex 8D and must be submitted in the way set out in Notifications 7 (Form and method of notification) of the PRA Rulebook.

(4) Where a firm is obliged to submit an application online under (2), if the information technology systems used by the PRA fail and online submission is unavailable for 24 hours or more, until such time as facilities for online submission are restored a firm must use the form in SUP 10B Annex 4D or SUP 10B Annex 8D and submit it in the way set out in Notifications 7 (Form and method of notification) of the PRA Rulebook.

19/06/2014

SUP 10B.14.2

(1) This rule applies to a notification under Form C or Form D.

(2) A notification must be made in accordance with SUP 10B.14.1 D except that the annexes to SUP 10B in which the forms are to be found are SUP 10B Annex 6R or SUP 10B Annex 7R rather than the Annexes mentioned in SUP 10B.14.1 D.

01/04/2013

SUP 10B.14.3

If the information technology systems used by the PRA fail and online submission is unavailable for 24 hours or more, the FCA and PRA will endeavour to publish a notice on their websites confirming that online submission is unavailable and that the alternative methods of submission set out in SUP 10B.14.1D (4) and Notifications 7 (Form and method of notification) of the PRA Rulebook. should be used.

19/06/2014

SUP 10B.14.4

Where SUP 10B.14.1D (4) or the equivalent situation under SUP 10B.14.2 R applies to a firm, GEN 1.3.2 R (Emergency) does not apply.

01/04/2013

SUP 10B Annex 1

[Not used]

01/04/2013

01/04/2013

SUP 10B Annex 2

Approved person regime: summary of forms and their use for applications for approval to perform a PRA-controlled function

01/04/2013

Function

Form

Submission

person about to perform a PRA controlled function if he has never been approved by the FCA or PRA before.

Submitted by the firm making the application before activities requiring approval commence.

Candidate is to perform a PRA controlled function and either has current approval to perform an FCA significant-influence function or a PRA controlled function or has had such an approval within the previous six months.

Shortened Form
A
if conditions met

Submitted by the firm making the application before activities requiring approval commence.

Candidate ceased to be an approved person more than six months ago.

Submitted by the firm making the application before activities requiring approval commence.

Candidate is seeking to perform a significant-influence function for the first time or ceased to have approval from the FCA or PRA to perform such a function more than six months ago.

Submitted by the firm making the application before activities requiring approval commence.

Firm applying for an outstanding application to perform a PRA controlled function to be withdrawn.

Submitted by the firm: signed by all interested parties.

Person ceasing to perform a PRA controlled function.

C (unless it should be notified under Form E)

Submitted by the firm within seven business days of approved person ceasing to perform controlled function(s).

If a PRA-approved person's title, name or national insurance number changes, or there is information which may be material to the continuing assessment of an approved person's fitness and propriety.

Submitted by firm within seven business days of the firm becoming aware of the matter.

Person remaining with the same firm but changing PRA controlled functions.

Submitted by firm to the PRA before changes take place.

Person remaining with the same firm but giving up an FCA significant-influence function and taking up a PRA controlled function.

Submitted by firm to the PRA before changes take place.

Person remaining with the same firm in the circumstances described in SUP 10B.7.4 R (giving up a PRA controlled function triggering need for FCA approval).

Submitted by firm to the FCA in hard copy in advance of giving up the PRA governing function.

Person remaining with the same firm but giving up a PRA controlled function and taking up an FCA significant-influence function.

Submitted by firm to the FCA before changes take place (see the FCA's Handbook).

Person being appointed to a PRA governing function role who is about to start a function that would otherwise have come within the apportionment and oversight function.

A or E as appropriate

The form should mention that the person is to perform what would otherwise have been the apportionment and oversight function. See SUP 10A.11.10 G (table in the FCA's Handbook of examples of how the need for dual FCA and PRA approval in relation to PRA-authorised persons is reduced).

Person moving from one PRA governing function role to another while continuing to perform a function that would otherwise have come within the apportionment and oversight function.

See previous row

See previous row.

01/04/2013

SUP 10B Annex 3

[Not used]

01/04/2013

[Not used]

01/04/2013

SUP 10B Annex 4

Form A: Application to perform controlled functions under the approved person regime

01/04/2013

This annex consists only of one or more forms. Forms are to be found through the following address: Supervision forms - Notes from direction in SUP 10B.12

01/04/2013

SUP 10B Annex 5

Form B: Notice to withdraw an application to perform controlled functions under the approved persons regime

01/04/2013

This annex consists only of one or more forms. Forms are to be found through the following address: Supervision forms - SUP 10B Annex 5

01/04/2013

SUP 10B Annex 6

Form C: Notice of ceasing to perform controlled functions

01/04/2013

This annex consists of only one or more forms. Forms can be completed online now by visiting: http://www.fca.org.uk/firms/about-authorisation

The forms are also to be found through the following address: Supervision forms - SUP 10B Annex 6

01/04/2013

SUP 10B Annex 7

Form D: Notification of changes in personal information or application details

01/04/2013

01/04/2013

SUP 10B Annex 8

Form E: Internal transfer of an approved person

01/04/2013

This annex consists only of one or more forms. Forms are to be found through the following address: Supervision forms - SUP 10B Annex 8

01/04/2013