FSA Consultation on the PRA and FCA Regimes for Approved Persons

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On October 3, the FSA published consultation paper 12/26 ‘Regulatory reform: the PRA and FCA regimes for Approved Persons’ (CP12/26). As part of the reform of the supervisory structure of financial services in the UK, the role and functions of the FSA will be passed over to the Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA). The PRA and FCA will each adopt sections of the FSA Handbook to create new PRA and FCA rulebooks. Most of the FSA Handbook will be adopted in its current form. Some substantive amendments to the FSA Handbook will be made to align the new rulebooks with the future objectives and functions of the PRA and FCA.

CP12/26 consults on these substantive amendments, most of which relate to the ‘controlled functions’ which can only be carried out by persons approved by the FSA (‘approved persons’), who must comply with the Statements of Principle and Code of Practice for Approved Persons (APER) in the FSA Handbook. The main substantive changes consulted on by CP12/26 are:

  • o    a split of the current list of controlled functions for firms regulated by both the PRA and FCA (dual-regulated firms), seeking to minimise unnecessary duplication for dual-regulated firms; and
  • o    an extension of the Statements of Principle in APER to a wider set of activities, and their application to people approved by either regulator – meaning that both regulators will have the ability to discipline certain categories of approved person.

 The FSA invites comments by December 7.