FSA is consulting on changes to the way firms should deal with their approved persons. It explains that as part of its process for creating the PRA and FCA Handbooks it intends to make only the minimum changes necessary to implement the cut-over and the new regime. However, in some cases, it will be necessary to change existing procedures so the new regulators can meet their statutory objectives. For approved persons in firms regulated only by FCA after legal cut-over, there will be little change in the process and rules. This consultation focuses on dual-regulated firms. FSA now plans to:

  • split the list of controlled functions as it relates to dual-regulated firms, to minimise the possibility of duplication; and
  • increase the scope of the Principles for Approved Persons (APER) so it covers a broader range of functions. FSA wants to make it clear that it expects the same standards of behaviour from approved persons both within and outside their controlled functions.

FSA has included a chart showing how it intends to designate each controlled function, so only one regulator is responsible for each. Where an individual applies for two functions, FSA intends to take a pragmatic approach so that, for example, a chief executive of a dual-regulated firm (seeking approval from PRA) would not also need approval from FCA for being a director. The only exception to the rule that each controlled function is the responsibility of only one regulator is the non-executive director function for which there will be both a PRA and an FCA class. FSA says it is still keen to introduce the proposed customer function for mortgage business, but that technological issues are preventing it from doing so as soon as it would like. The paper includes draft Handbook text, making the significant amendments needed to implement the changes. The consultation does not cover grandfathering of existing approvals, which Treasury is expected to legislate for. FSA asks for comments by 7 December. (Source: Regulatory Reform: the PRA and FCA Regimes for Approved Persons)