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What are FCA Authorised Persons and FCA Approved Persons?

fca approved persons fca handbook

What are FCA Authorised Persons and FCA Approved Persons?

FCA Authorised Persons

For authorised persons, we need to look at the firm that is executing the service or function. While some may be one man bands in the retail adviser space, others may be FTSE100 companies. The Financial Services & Markets Act 2000 is the fundamental legislation involved in defining these roles and in accordance with section 31 of the Act (Authorised persons) is defined as any of the following:

( a) a person who has a Part 4A permission to carry on one or more regulated activities;
( b) an incoming EEA firm;
( c) an incoming Treaty firm;
( d) a UCITS qualifier;
( e) an ICVC;
( f) the Society of Lloyd’s.

For that reason the firm can become authorised in it’s own right (see legal entity).

FCA Approved Persons

The UK legislation calls for persons performing certain functions (described as “controlled functions”) to be approved by the FCA in advance. These are as follows, and are set out in the FCA Handbook:

  • Governing Functions (Directors, Partners, etc.)
  • Required Functions (Compliance Oversight, MLRO)
  • Systems and Controls Function
  • Significant Management Function (less relevant for a new investment manager)
  • Customer Functions (eg for those carrying on investment advisory or portfolio management activities)

For a recently launched company, the FCA is likely to expect a minimum of two senior individuals as being included with the operation and supervision of the UK business.

For wholesale business, there are no longer specific exam requirements. However, companies can however request employees to take exams to satisfy themselves that an individual has the requisite skills, knowledge and proficiency.

How do I become an approved person?

Your firm needs to apply on your behalf.

In an application, your firm will be requested to help prove that an individual carrying on a controlled function:

  • meets the FCA criteria for authorisation (the fit and proper test) and.
  • can comply with the standards required to carry out their controlled function or functions (the Statements of Principle and Code of Practice for Approved Persons – APER).

Please be aware that this is changing in 2019 to the Senior Managers and Certification Regime (SM&CR or SMCR). Please ask for details.

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You may also be interested in;

  1. Why Do I Need To Be Authorised?
  2.  How do I become FCA authorised?
  3. What Are The Threshold Conditions?
  4. What Legal Entity Do I Use?
  5. How Much & How Long?