In this section we discuss the requirements expected of Senior Management who will require authorisation with the Senior Management and Certification regime. This applies to the most senior executive management and directors who are subject to regulatory approval.
The certification regime for deposit taking firms (excluding credit unions) and insurers requires relevant firms to assess fitness and propriety of certain employees who could pose a risk of significant harm to the firm or any of its customers.
Section 59 of the Financial Services and Markets Act 2000 requires authorised firms are required to ensure that individuals seeking to perform one or more of the PRA designated senior management functions. So how do you apply and what are the responsibilities.
The regime includes the following elements;
a) The Senior Management and some senior decision makers at the firm must be assessed as fit and proper, have clearly defined responsibilities and be subject to enhanced conduct requirements including the duty to take reasonable steps in fulfilling their responsibilities.
b) Certification regime- for key risk taking employees below the top tier firms need to determine on appointment and then certify that they are fit and proper to undertake their roles.
c) Regulatory references- as part of the hiring process for senior decision makers and key risk taking employees, firms must exchange mandatory employment references, on taking information of prior conduct.
Applications are determined under s.61 FSMA 2000 and the regulator may approve an individual only where it is satisfied that a candidate is fit and proper to perform the senior management function. They will take into account and must be satisfied of the candidates
a) Honesty, integrity and reputation in dealings and able to comply with the requirements posed on them.
b) Competence and capability that they have the necessary skills to carry on the function they are to peform.
c) Financial soundness.
What happens if your application is not approved?
If you choose Central London legal centre’s professional representatives we will act on your behalf which means that the regulator in turn will let us know both orally and in writing, if your application addresses the concerns of the regulator. If your application does not address the concerns raised by the regulator they will issue a ‘minded to refuse’ letter which will set out our concerns and detail the threshold conditions /specific rules which have not been satisfied. There are some steps;
a) If you still wish to proceed after the regulator refuses then central London legal centre can help you escalate your case for a decision to senior management at both regulators including the FCA. If the regulators agree with the case team’s recommendations (to propose to refuse the application), the PRA or the FCA will issue a ‘warning notice’.
b) You will be able to withdraw your application or make representations orally or in writing to the relevant PRA or FCA decision makers.
c) If after hearing representations the decision maker still refuses your application, a decision notice will be issued to us on your behalf. The decision notice will notify you of your right to refer the decision to notice to the upper tribunal and the PRA will issue you with a final notice and details of this.