Last year the FSA extended the scope of the approved persons regime for those that exercise a 'significant influence' function (SIF) at authorised firms.
Although Recognised Bodies (RBs) are not required to have 'approved persons', the FSA has been applying an approach consistent with the approved person regime where individuals have been appointed to comparable positions at RBs, and in particular to Board roles (both executive and non-executive).
Whilst the Financial Services and Markets Act 2000 (Recognition Requirements for Investment Exchanges and Clearing Houses) Regulations 2001 are of sufficient scope to allow the FSA to consider the type of person now covered by the expanded approved persons regime, the FSA has reconsidered its supervisory approach in relation to such persons.
The FSA has now published a Dear CEO letter which provides an update on its supervisory approach for RBs in light of the changes mentioned above.
The FSA states that over the next few months it will work with RBs to ensure that the following persons have been properly identified:
- All key individuals, including, for example, individuals who are not employees of the RB but are employed within the RB’s group who also satisfy the test of being a key individual.
- Certain individuals in the RB’s group who exercise significant influence over the conduct of the RB’s affairs, but which are not key individuals.