We recognise that firms may need longer periods of temporary
arrangements if, for example, an Approved Person is absent because of
coronavirus, or if recruitment to replace an Approved Person has been
delayed due to the pandemic .
We have also published our
expectations on the Senior Managers & Certification Regime (SM&CR;)
for solo regulated firms and for dual-regulated firms with the
Prudential Regulation Authority (PRA) . Temporary arrangements for
controlled functions – 12-week rule
We recognise that some
benchmark administrators and ARs have had to make temporary
arrangements to cover absences in direct response to the pandemic and
that this uncertainty has not yet been resolved . To provide further
flexibility to firms at this time, we intend to issue a modification
by consent to the 12-week rule, which will allow temporary
arrangements for up to 36 weeks .
The 12-week rule allows an
individual to cover for an Approved Person without being approved,
where the absence is temporary or reasonably unforeseen, and the
appointment is for less than 12 consecutive weeks .
temporary arrangements last longer than 12-weeks as a result of the
crisis, firms will be able to notify us that they consent to a
modification of the 12-week rule . In these cases, temporary
arrangements can last up to 36 weeks . If the modification by consent
is being used in relation to an AR, the Principal – rather than the AR
– should notify us .
Roles requiring approval under the
customer function (CF30) cannot be covered using the 12-week rule .
The modification by consent does varies this exclusion . Furloughed
There may be cases where benchmark administrators or ARs
decide to furlough Approved Persons if they are unable to fulfil their
responsibilities, for example due to illness, caring responsibilities
or if they have no current practical responsibilities .
an individual is permanently leaving their post, they can retain their
approval during their absence and will not need to be re-approved by
the FCA when they return . The benchmark administrator – or, in the
case of an AR, the principal – is still responsible for ensuring the
Approved Person is fit and proper . Notification and documentation
We do not expect firms to notify us under Form D of the
temporary arrangements described on this page .
We do expect
these arrangements (however temporary) to be clearly documented
internally, so that everyone understands who is responsible for what .
This should be available if we request it – now or in the future .
Firms’ internal records should aim to keep a ‘running
commentary’ of their personnel performing significant influence
functions and their responsibilities during this period . Firms should
make sure that their ARs do the same . Responsibilities of the
Regulated firms that use ARs to carry on
regulated activity remain responsible for their ARs and networks
meeting our rules . Principals should continue to ensure that: the
controllers, directors, partners, proprietors and managers of an AR
are fit and proper the AR is solvent and suitable to act for the firm
the principal has adequate controls over the AR’s activities the
appointment does not prevent the firm from satisfying and continuing
to satisfy the threshold conditions the principal is able to monitor
and enforce compliance with relevant requirements
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