What are FCA Authorised Persons and FCA Approved Persons?
( applying section 31 of the Financial Services & Markets Act [FSMA] defines Authorised persons) as just one 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 business can become authorised in it’s own right (see legal entity).
FCA Approved Persons
The UK legislation calls for persons performing particular functions (quoted as “controlled functions”) to be approved by the FCA in advance. These are as follows, and are shown in the FCA Handbook:
- Governing Functions (Directors, Partners, etc.).
- Required Functions (Compliance Oversight, MLRO).
- Systems and Controls Function.
- Significant Management Function (less pertinent for a new investment manager).
- Customer Functions (eg for those carrying on investment advisory or portfolio management activities).
For a recently established business, the FCA is likely to expect (and will require for an AIFM) a minimum of two senior individuals to be involved with the operation and management of the UK enterprise.
For wholesale business, there are no longer specified exam requirements. However, businesses can still call for employees to take exams for them to be satisfied that an individual has the requisite skills, knowledge and expertise.
How do I become an approved person?
Your company must apply on your behalf.
In an application, your firm will be asked to help prove that an individual performing a controlled function:
- meets the FCA criteria for authorisation (the fit and proper test) and.
- can comply with the standards demanded 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.