• Doing business with the FSA
  • Being regulated
    • Approved persons and appointed representatives
      • Approved persons
        • Approval process
        • Controlled functions
        • Fitness and Propriety
        • Withdrawal of approval
        • Ensuring staff competency
        • Frequently asked questions
        • Hot topics

An approved person is an individual who has been approved by the FSA to perform one or more 'controlled functions' on behalf of an authorised firm.

The purpose of FSA approval of individuals who perform controlled functions is to ensure that the individuals concerned are ‘fit and proper’. Under the Financial Services and Markets Act 2000, the FSA may approve only where it is satisfied that a candidate is fit and proper to perform the controlled function(s) applied for. When considering a candidate’s fitness and propriety, the FSA considers (i) honesty, integrity and reputation; (ii) competence and capability; (iii) financial soundness. The approval of individuals complements FSA regulation of the authorised firm for which the approved person(s) performs the function.

An individual cannot be approved in advance of a firm being authorised, but the FSA will coordinate applications to ensure that the approval of individuals is considered at the same time as the authorisation of the firm.

Approval must be obtained before a person can perform a controlled function.

 

Consequences of Approval

FSA approval to perform a controlled function brings with it a number of important responsibilities, including a duty to be aware of and comply with FSA regulatory requirements and expectations. Specifically, approved persons must:

1. Continue to comply with the FSA’s Fit and Proper test for Approved Persons, set out in the FIT section of the FSA Handbook. Approved persons have a duty to report to the authorised firm and to the FSA any matter that may impact on their ongoing fitness and propriety. They do this via Form D - Notification of changes in Personal Details or Application Information. The questions in Sections 5 and 6 of the Application Form (Form A) can provide a useful but non-exhaustive guide to issues that may impact on an approved person’s ongoing fitness and propriety.
2. Comply with the Statements of Principle and the Code of Practice for Approved Persons set out in the APER section of the FSA Handbook. These Statements of Principle describe the conduct that the FSA requires and expects of the individuals it approves. Four Statements of Principle apply to all approved persons and three apply to persons who carry out a significant influence function. The Code of Practice sets out guidance, together with generic examples of conduct which, in the FSA’s opinion, does not comply with the Principles.

All approved persons need to be familiar with the FSA’s Fit and Proper test, the Statements of Principle and the Code of Practice and understand how they apply to the day to day exercise of controlled functions.

Non compliance with these regulatory requirements may result in the FSA taking enforcement action against the approved person.