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Date of publication: December 2017

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

A controlled function refers to certain roles performed within an authorised firm which have a particular significance.

Examples of controlled functions are:

  • Governing functions such as Directors or Partners of an authorised firm
  • Required functions such as compliance oversight or money laundering reporting function.
  • The purpose of FCA 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 FCA 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 FCA considers
  • honesty, integrity and reputation;
  • competence and capability; and
  • financial soundness.
  • The approval of individuals complements FCA regulation of the authorised firm for which the approved person(s) performs the function.
  • Approval must be obtained by the firm before a person can perform a controlled function.

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

  • Continue to comply with the FCA’s Fit and Proper test for Approved Persons.
  • Approved persons have a duty to report to the authorised firm and to the FCA any matter that may impact on their on-going fitness and propriety.
  • Comply with the Statements of Principle and the Code of Practice for Approved Persons.

These Statements of Principle describe the conduct that the FCA requires and expects of the individuals it approves. http://fshandbook.info/FS/html/handbook/APER/2

All approved persons need to be familiar with the FCA’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 FCA taking enforcement action against the approved person.

FC4

Disclaimer: These guides are intended to provide information only and should not be viewed as a recommendation or advice. Oury Clark are authorised and regulated by the Financial Services Authority for investment business.

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