SUP 10C FCA senior managers regime for approved persons in SMCR firms

This chapter applies to every SMCR firm.

This chapter does not apply to an overseas SMCR firm other than in relation to an establishment maintained by it or its appointed representative in the United Kingdom.

This chapter does not deal with an approved person who is approved under SUP 10A (FCA Approved Persons in Appointed Representatives).

This chapter does not apply to a function performed by a person acting as:

1. (1) an insolvency practitioner within the meaning of section 388 of the Insolvency Act 1986;
2. (2) a nominee in relation to a voluntary arrangement under Parts I (Company Voluntary Arrangements) and VIII (Individual Voluntary Arrangements) of the Insolvency Act 1986;
3. (3) an insolvency practitioner within the meaning of article 3 of the Insolvency (Northern Ireland) Order 1989; or
4. (4) a nominee in relation to a voluntary arrangement under Parts II (Company Voluntary Arrangements) and VIII (Individual Voluntary Arrangements) of the Insolvency (Northern Ireland) Order 1989;
5. (5) a person acting as a resolution administrator appointed by the Bank of England in accordance with section 62B of the Banking Act 2009;
6. (6) a person appointed by the Bank of England as a director or senior manager to a bank, building society, stabilisation vehicle or banking group company for any purpose in connection with the exercise of a stabilisation option or a stabilisation power; or
7. (7) a person appointed by the Treasury as a director or a senior manager to a bank, building society or banking group company for any purpose in connection with the exercise of the temporary public ownership stabilisation option, throughout the period of 2 years beginning with the date of that appointment.

1. (1) ‘banking group company’ has the meaning in section 81D of the Banking Act 2009;
2. (2) ‘senior manager’ means a person who exercises executive functions and is responsible, and directly accountable to the directors, for the day-to-day management of a bank, building society, stabilisation vehicle or banking group company;
3. (3) ‘stabilisation option’ means any of the stabilisation options listed in section 1(3) of the Banking Act 2009;
4. (4) ‘stabilisation power’ means any of the stabilisation powers listed in section 1(4) of the Banking Act 2009;
5. (5) ‘stabilisation vehicle’ means a bridge bank as defined in section 12(1) of the Banking Act 2009 or an asset management vehicle as defined in section 12ZA(2) of the Banking Act 2009; and
6. (6) ‘temporary public ownership stabilisation option’ means the transfer to temporary public ownership in accordance with section 13 of the Banking Act 2009.

For Swiss general insurers, references in this chapter to parts of the PRA Rulebook for ‘Solvency II firms’ are to be read as references to the corresponding parts of the PRA Rulebook applying to large non-directive insurers.

In accordance with section 59 of the Act (Approval for particular arrangements), a function specified in this chapter is an FCA controlled function only to the extent that it is performed under an arrangement entered into by:

1. (1)

   a firm; or

2. (2)

   a contractor of the firm;

in relation to the carrying on by the firm of a regulated activity.

Each FCA-designated senior management function is one which comes within the definition of a senior management function.

1. (1) for up to 12 weeks; or
2. (2) up to the time when the FCA determines the application for the approval of the permanent replacement, as long as that application is made within the first 12 weeks following departure. 

If:

1. (1) a firm appoints an individual (I) who is a member of the conduct rules staff of the firm to perform a function which, but for this rule, would be an FCA-designated senior management function;
2. (2) the appointment is to provide cover for an SMF manager who is an individual and whose absence is:
   1. (a) temporary; or
   2. (b) reasonably unforeseen; and
3. (3) the appointment is for less than 12 weeks in a consecutive 12-month period (subject to SUP 10C.3A.8R);

the description of the relevant FCA-designated senior management function does not relate to those activities of that individual.

1. (1) the ‘absent manager’ means the SMF manager who has become absent as described in SUP 10C.3A.6R(2);
2. (2) the ‘temporary replacement’ means ‘I’ as defined in SUP 10C.3A.6R(1); and
3. (3) an SMF manager being absent includes the SMF manager ceasing to perform their FCA-designated senior management function.

1. (1) This rule deals with an appointment by a firm under SUP 10C.3A.6R where:
   1. (a) the absence is reasonably unforeseen; or
   2. (b) an absence of over 12 weeks is reasonably unforeseen.
2. (2) If, before the period under SUP 10C.3A.6R(3) would have expired but for this rule, the firm makes a valid and complete application for the approval for the performance by a person of the FCA-designated senior management function that was performed by the absent manager:
   1. (a) the period for which the function performed by the temporary replacement is not an FCA-designated senior management function is extended until that application is finally determined; and
   2. (b) the period for which the temporary replacement may perform the function without approval is extended accordingly.
3. (3) An application is finally determined for the purpose of (2) when:
   1. (a) the application is withdrawn; 
      (b) the FCA grants the application;
   2. (c) (where the FCA has refused or not granted the application and the matter is not referred to the Tribunal) the time for referring the matter to the Tribunal has expired; or
   3. (d) (where the FCA has refused or not granted the application and the matter is referred to the Tribunal) the reference, and any appeal against the Tribunal’s determination, has been finally disposed of.
4. (4) In this rule, the ‘absent manager’ and the ‘temporary replacement’ have the meanings in SUP 10C.3A.7R.

1. (1) The material in FIT is relevant to the assessment in SUP 10C.3A.13R.
2. (2) The assessment may take into account that the replacement will only be in post for a limited period.
3. (3) A firm should ensure that the replacement has the skills, personal characteristics, knowledge and expertise necessary for the discharge of the responsibilities allocated to them under SUP 10C.3A.6R, including any FCA-prescribed senior management responsibilities or any responsibilities under SYSC 26 (Senior managers and certification regime: Overall and local responsibility) re-allocated from the absent manager.

1. (1) use SUP 10C.3A.6R and SUP 10C.3A.8R reasonably;
2. (2) not use those rules unless it needs to, even if the firm is otherwise entitled to use them;
3. (3) use those rules as infrequently as reasonably possible; and
4. (4) limit the time a substitute is in place under the rules to as short a time as reasonably possible. 

1. (1) having in place and operating effective and up-to-date succession plans for each of its SMF managers;
2. (2) using notice periods effectively to identify candidates to fill the place of the departing SMF manager and to apply for approval for the replacement quickly;
3. (3) submitting an application for the approval of the individual who is to fill the place of the absent or departing SMF manager as soon as reasonably possible; and
4. (4) ensuring that the application in (3) is of good quality and, in particular, ensuring that the FCA does not have to ask for explanations of the material submitted under the application or to request further information.  

1. (1) including sufficiently long notice periods in the terms of engagement of its SMF managers; and
2. (2) ensuring any fixed term of engagement of an SMF manager is sufficiently long.

1. (1) A firm may be required to notify the FCA of the absence of an SMF manager using a Form C or D under SUP 10C.14 (Changes to an FCA-approved person’s details) but it is not otherwise required routinely to report the use of SUP 10C.3A.6R or SUP 10C.3A.8R (The 12-week rule: The main rules).
2. (2) A firm should, however, report the use of those rules if there is something about the appointment that the FCA would reasonably expect to know – for instance, under Principle 11 (Relations with regulators).
3. (3) An example of (2) may be if the firm concludes that the person filling in for the departed or absent SMF manager is suitable for the role but that the FCA might have reasonable doubts about whether that person is suitable.

1. (1) A firm to which SYSC 26 (Senior managers and certification regime: Overall and local responsibility) applies may have allocated responsibilities under that chapter to an SMF manager who is absent under SUP 10C.3A.6R or SUP 10C.3A.8R (The 12-week rule: The main rules).
2. (2) SYSC 26.4.6R (Exclusion where the 12-week rule applies) deals with how those responsibilities may be reallocated during the SMF manager’s absence.
3. (3) SYSC 26.4.8G explains that SYSC 26.4.6R, SUP 10C.3A.6R and SUP 10C.3A.8R apply to a person performing the other overall responsibility function or the other local responsibility function as well as to other designated senior management functions.

1. (1)

   Each function described in SUP 10C.4.3R is an FCA controlled function.

2. (2)

   In accordance with section 59(6A) of the Act (Approval for particular arrangements), the FCA designates each function in (1) as a senior management function.

SUP 10C Annex 1 (What functions apply to what type of firm) sets out which of the functions in SUP 10C.4.3R apply to which kind of firm.

1. (1)

   For a UK SMCR firm, the executive director function is the function of acting in the capacity of a director (other than a non-executive director) of a the firm.

2. (2)

   For an overseas SMCR firm, the executive director function is the function of acting in the capacity of a director (other than a non-executive director) in relation to its branch in the United Kingdom where the person performing that function has responsibility for managing one or more aspects of the firm’s affairs so far as relating to the activities of the branch.

3. (3)

   Paragraph (2) includes a person who is a member (other than a non-executive member) of the branch’s governing body.

4. (4)

   The executive director function does not apply to a UK SMCR firm that is:

   1. (a)

      a partnership; or

   2. (b)

      a limited liability partnership.

In the case of the Society, the executive director function also includes the function of acting in the capacity of an executive member of a committee to which the Council of the Society directly delegates authority to carry out the Society’s regulatory functions.

1. (1)

   This rule applies to a non-directive friendly society.

2. (2)

   The executive director function is the function of directing the affairs of the firm, either alone or jointly with others. Each such person is referred to in this rule as a “director”.

3. (3)

   The executive director function includes the function of being or acting in the capacity of:

   1. (a)

      a member of the firm’s governing body; or

   2. (b)

      (in the case of an FCA-authorised firm) the chief executive.

   The term director also includes each such a person.

4. (4)

   If the principal purpose of the firm is to carry on regulated activities, each director performs the FCA controlled function.

5. (5)

   If the principal purpose of the firm is other than to carry on regulated activities, a director performs the FCA controlled function only to the extent that they have responsibility for a regulated activity.

6. (6)

   Each person on the firm’s governing body will be taken to have responsibility for its regulated activities, unless the firm has apportioned this responsibility to one particular person to whom it is reasonable to give this responsibility.

7. (7)

   The “particular” person referred to in (6) need not be a member of the firm’s governing body.

8. (8)

   The executive director function does not include acting in the capacity of a non-executive director.

9. (9)

   This rule applies in place of SUP 10C.5.1R.

1. (1)

   This rule applies to a small non-directive insurer.

2. (2)

   The executive director function includes being a chief executive of the firm.

1. (1)

   This rule applies to a UK SMCR firm that is a partnership.

2. (2)

   The partner function is the function of being or occupying the position of a partner in that firm.

3. (3)

   The partner function also includes:

   1. (a)

      the function of being or occupying the position of a partner in that firm (by whatever name called); and

   2. (b)

      acting as a member of the firm’s governing body.

1. (1)

   This rule applies to a UK SMCR firm that is a limited liability partnership.

2. (2)

   The partner function is the function of being or acting in the capacity of:

   1. (a)

      a member in that firm or a person occupying the position of a member (by whatever name called);

   2. (b)

      a person appointed to direct the firm’s affairs;

   3. (c)

      a member of the firm’s governing body; or

   4. (d)

      a person in accordance with whose directions or instructions (not being advice given in a professional capacity) the members or directors are accustomed to act.

If a partnership is registered under the Limited Partnership Act 1907, the partner function does not extend to any function performed by a limited partner.

1. (1)

   This rule applies to an SMCR firm that is an FCA-authorised person to which the partner function applies.

2. (2)

   If the principal purpose of the firm is to carry on one or more regulated activities, each person in SUP 10C.5.14R to SUP 10C.5.16R (a “partner”) performs the partner function.

3. (3)

   If the principal purpose of the firm is other than to carry on regulated activities:

   1. (a)

      a partner performs the partner function to the extent only that they have responsibility for a regulated activity; and

   2. (b)

      a partner in a firm will be taken to have responsibility for each regulated activity except where the firm has apportioned responsibility to another partner or group of partners.

1. (1)

   The chief executive function is the function of acting in the capacity of a chief executive of a firm.

2. (2)

   This function does not apply to a non-directive friendly society.

1. (1)

   This rule applies to an overseas SMCR firm.

2. (2)

   The head of third country branch function is the function of having responsibility alone or jointly with others, for the conduct of all activities of the United Kingdom branch of the firm which are subject to the UK regulatory system.

If the firm has a nomination committee, the chair of the nomination committee function is the function of acting in the capacity of the chair of that committee.

If the firm has a with-profits committee, the chair of the with-profits committee function is the function of acting in the capacity of a non-executive chair of the committee.

If the firm has a with-profits advisory arrangement, the chair of the with-profits committee function is the function of being whichever of the following applies to the firm:

1. (1)

   the independent person referred to in paragraph (a) of the definition of with-profits advisory arrangement; or

2. (2)

   the non-executive directors referred to in paragraph (b) of that definition.

The chair of the governing body function is the function of having responsibility for chairing, and overseeing the performance of the role of, the governing body of the firm.

The chair of the risk committee function is the function of having responsibility for chairing, and overseeing the performance of, any committee responsible for the oversight of the risk management systems, policies and procedures of the firm, including, where applicable to the firm, a committee established in accordance with the risk control requirements for SMCR firms.

The chair of the audit committee function is the function of having responsibility for chairing, and overseeing the performance of, any committee responsible for the oversight of the internal audit system of the firm including, where applicable to the firm, a committee established in accordance with the internal audit requirements for SMCR firms.

The chair of the remuneration committee function is the function of having responsibility for chairing, and overseeing the performance of, any committee responsible for the oversight of the design and the implementation of the remuneration policies of a firm, including, where applicable to the firm, a committee established in accordance with:

1. (1)

    [deleted]

2. (2)

    SYSC 19B.1.9R (AIFM Remuneration Principle 3: Governance);

3. (3)

    [deleted]

4. (4)

    rule 7.4 of the PRA Remuneration Rules, as applied by SYSC 19D.1A.1R(1);

5. (5)

    SYSC 19E.2.9R (UCITS Remuneration Principle 3: Governance); and

6. (6)

    MIFIDPRU 7.3.3R (Remuneration committee).

The senior independent director function is the function of performing the role of a senior independent director, and having particular responsibility for leading the assessment of the performance of the person performing the chair of the governing body function.

1. (1)

   The group entity senior manager function is the function of having a significant influence on the management or conduct of one or more aspects of the affairs of a firm in relation to its regulated activities.

2. (2)

   This controlled function does not include having such influence in the course of performance of another designated senior management function for that firm.

3. (3)

   This controlled function only applies if it is performed by:

   1. (a)

      a person employed by; or

   2. (b)

      an officer of:

   any of the following:

   1. (c)

      a parent undertaking or holding company of the firm; or

   2. (d)

      another undertaking which is a member of the firm’s group.

1. (1) The chief financial officer of a group can be used as an example of how SUP 10C.5B.5G applies.
2. (2) If the group’s chief financial officer limits their role to strategic functions, such as setting the broad financial policies that members of the group should follow and monitoring the application of those policies, it is unlikely that they will be performing the group entity senior manager function.
3. (3) The group’s chief financial officer does not carry out the group entity senior manager function just because they are responsible for the allocation of group capital to the firm. That is a function of the investing member of the group, not of the firm.
4. (4) If the group’s chief financial officer is responsible for implementing the group’s strategy in the firm or is responsible for the day-to-day management of the firm’s financial resources or of the firm’s finance function, the chief financial officer is likely to be performing the group entity senior manager function.
5. (5) If the firm has its own chief financial officer, that may make it less likely that the group’s chief financial officer is performing the group entity senior manager function.
6. (6) If:
   1. (a) the group’s chief financial officer does not implement decisions at the firm level (see (4)) and instead makes proposals to the firm’s chief financial officer about the operation of the firm’s finance function; and
   2. (b) the firm’s chief financial officer has sufficient discretion in how they apply and respond to such proposals,
   3. the group’s chief financial officer will generally not be performing the group entity senior manager function; instead, the group chief financial officer will be carrying on a group-level function rather than performing a function on behalf of the firm.
7. (7) One way of looking at it is to ask whether the influence and authority of the group chief financial officer cuts back the ability of the firm’s chief financial officer to manage the firm’s financial affairs to such an extent that it would be unreasonable to see the firm’s chief financial officer as controlling the firm’s financial resources alone (subject to the firm’s governing body and any director of the firm to whom they report).
8. (8) Another way of looking at it is to consider:
   1. (a) whether it would be reasonable to see the group’s chief financial officer as giving instructions to the firm’s chief financial officer or as making proposals that it would be expected that the firm’s chief financial officer would generally follow (in which case the group’s chief financial officer is likely to be performing the function); or
   2. (b) (within the framework of policies and proposals set as described in (2)) whether the firm’s chief financial officer considers proposals from the group’s chief financial officer on their merits and in the light of the interests of the firm and its customers (in which case the group’s chief financial officer is not likely to be performing the function).

1. (1) SUP 10C.5B.5G and SUP 10C.5B.5AG also apply where the influence is applied by a management committee of the group or its holding company.
2. (2) Therefore, if the firm’s governing body has sufficient discretion in how it applies and responds to proposals coming from group committees, approval would generally not be required for individuals on such a committee. In this case, the committee and its members will be carrying on a group-level function rather than performing a function on behalf of the firm.

1. (1) a firm has in place the relevant SMF managers based in the firm; and
2. (2) those SMF managers are effective and have sufficient control over the firm,

the FCA would not routinely expect the firm to have persons performing the group entity senior manager function in place.

1. (1)

   The parent of a subsidiary firm cannot itself perform the group entity senior manager function.

2. (2)

   A shareholder in the parent will also not perform this function unless the shareholder is also a director, officer or employee of the parent and is exerting significant influence over the firm through that role.

1. (1) SUP 10C.5B.1R(1) says that the group entity senior manager function only applies in relation to the firm’s regulated activities.
2. (2) This does not mean that it is limited to having direct influence on the conduct of regulated activities. It simply reflects the link that section 59 of the Act (Approval for particular arrangements) requires between a senior management function and regulated activities. It emphasises the point made by SUP 10C.3.6R (Definition of FCA controlled function: arrangements).
3. (3) Therefore, the group entity senior manager function can cover support functions.

1. (1) financial resources (so that the firm’s group’s chief financial officer may be within the scope of the function);
2. (2) technology (so that the firm’s group’s chief information and technology officer may be within the scope of the function); or
3. (3) human resources (so that the firm’s group’s head of human resources may be within the scope of the function).

The compliance oversight function is the function of acting in the capacity of a person who is allocated the function in:

1. (1)

   SYSC 6.1.4R(2);

2. (2)

    SYSC 6.1.3-CR;

3. (3)

    [deleted]

4. (4)

   SYSC 6.1.4CR;

5. (5)

   SYSC 3.2.8R; or

6. (6)

   (for a full-scope UK AIFM) article 61(3)(b) of the AIFMD level 2 regulation.

The money laundering reporting function is the function of acting in the capacity of the money laundering reporting officer of a firm.

The conduct risk oversight (Lloyd’s) function is the function of acting in the capacity of a person who is allocated the function in SYSC 3.2.9AR.

The limited scope function is the function of acting in the capacity of a person:

1. (1)

   responsible for the apportionment function and/or the oversight function set out in SYSC 4.4.5R;

2. (2)

   who has the responsibility allocated under MAR 8.5.2R (Responsibility for benchmark activities: regulated benchmark administrators); or

3. (3)

   performing the role of the senior manager described in MAR 8.5.4R(2) (Responsibility for benchmark activities: regulated benchmark administrators).

The chief finance officer function is the function of having responsibility for management of the financial resources of the firm, including reporting directly to the governing body of the firm in relation to its financial affairs.

The chief risk officer function is the function of having responsibility for overall management of the risk controls of a firm, including:

1. (1)

   the setting and managing of the firm’s risk exposures; and

2. (2)

   reporting directly to the governing body of the firm in relation to its risk management arrangements.

The head of internal audit function is the function of having responsibility for management of the internal audit function of the firm, including reporting directly to the governing body of the firm on the internal audit function.

1. (1)

   The chief operations function is the function of having overall responsibility for managing all or substantially all the internal operations or technology of the firm or of a part of the firm.

2. (2)

   In deciding whether a person has overall responsibility for managing all or substantially all the matters described in (1) for the purposes of this rule, the following are left out of account if one or more other persons have overall responsibility for them:

   1. (a)

      the matters to which the internal audit requirements for SMCR firms, the compliance requirements for SMCR firms or the risk control requirements for SMCR firms relate;

   2. (b)

      the matters to which any of the FCA required functions relate; or

   3. (c)

      any part of the firm responsible for advising other parts of the firm.

3. (3)

   (2) applies to a firm whether or not the requirements in (2)(a) or the functions in (2)(b) apply to it.

4. (4)

   The chief operations function does not include the function of acting in the capacity of a chief executive of a firm.

5. (5)

   A person (P) does not perform the chief operations function by managing the internal operations or technology of a part of a firm that carries out other functions (such as a part of the firm that carries on regulated activities with clients) as part of P’s function of managing that part of the firm.

6. (6)

   A firm’s SMCR legal function is not included in the firm’s internal operations or technology for the purpose of the definition of the chief operations function.

This section applies to a firm:

1. (1)

   to which SYSC 26 (Senior managers and certification regime: Overall and local responsibility) applies; and

2. (2)

   that is a UK SMCR firm.

A person performs the other overall responsibility function in relation to a firm if that person:

1. (1)

   is performing:

   1. (a)

      a function allocated to that person under SYSC 26.3.1R (Main rules) in relation to the firm;

   2. (b)

      FCA-prescribed senior management responsibility (z) in the table in SYSC 24.2.6R (functions in relation to CASS) allocated to that person under SYSC 24.2 (Allocation of FCA-prescribed senior management responsibilities: Main allocation rules); or

   3. (c)

      (if the firm has allocated such a function to someone) the function of having overall responsibility for any of the activities, business areas and management functions of the firm excluded from SYSC 26.3 (Main rules) by SYSC 26.4.18R (Exclusion for AIFMD); and

2. (2)

   does not have an approval to perform any other designated senior management function in relation to the firm.

The other overall responsibility function does not apply if approved for another function

A person does not perform the other overall responsibility function in relation to a firm by performing a function allocated to that person under SYSC 26.4.6R (Exclusion where the 12-week rule applies) in relation to the firm.

A person does not perform the other overall responsibility function by having overall responsibility for the SMCR legal function under SYSC 26.3.

1. (1) A person performing the other overall responsibility function should be the most senior person in the firm who has responsibility for the area being managed as part of the other overall responsibility function.
2. (2) This follows from SYSC 26.6 (Meaning of local and overall responsibility: General), SYSC 26.7 (Meaning of local and overall responsibility: Reporting to the governing body) and SYSC 26.8 (Meaning of local and overall responsibility: Not reporting to the governing body). A firm should consider those provisions when deciding whether the person it is considering for appointment to carry out the other overall responsibility function is eligible for appointment.
3. (3) Paragraph (1) also applies to SUP 10C.7.1R(1)(b) and (c).

This section:

1. (1)

   applies to an overseas SMCR firm to which SYSC 26 (Senior managers and certification regime: Overall and local responsibility) applies; and

2. (2)

   does not apply to an EEA SMCR firm.

A person performs the other local responsibility function in relation to a branch maintained in the United Kingdom by an overseas SMCR firm if that person:

1. (1)

   is performing:

   1. (a)

      a function allocated to that person under SYSC 26.3.1R (Main rules) in relation to the firm; or

   2. (b)

      FCA-prescribed senior management responsibility (z) in the table in SYSC 24.2.6R (functions in relation to CASS) allocated to that person under SYSC 24.2 (Allocation of FCA-prescribed senior management responsibilities: Main allocation rules); and

2. (2)

   does not have an approval to perform any other designated senior management function in relation to the branch.

A person does not perform the other local responsibility function in relation to a firm by performing a function allocated to that person under SYSC 26.4.6R (Exclusion where the 12-week rule applies) in relation to the firm.

A person does not perform the other local responsibility function by having local responsibility for the SMCR legal function under SYSC 26.3.

This section applies to an EEA SMCR firm.

1. (1)

   A person performs the EEA branch senior manager function in relation to the branch in the United Kingdom of an EEA SMCR firm if that person has significant responsibility for one or more significant business units of the branch that carry on any of the activities listed in (2).

2. (2)

   The activities listed in this paragraph are:

   1. (a)

      designated investment business other than dealing in investments as principal, disregarding article 15 of the Regulated Activities Order;

   2. (b)

      processing confirmations, payments, settlements, insurance claims, client money and similar matters, in so far as this relates to designated investment business;

   3. (c)

      the activity of accepting deposits from banking customers and activities substantially connected to that activity to the extent that it does not fall within (a) or (b), above; and

   4. (d)

      activities that are subject to CASS.

3. (3)

   In considering whether a person performs the functions in (2), only activities carried on from the branch are relevant.

4. (4)

   Paragraph (2)(d) only applies in relation to the regulated activities of a firm that are not passported activities as defined in (5) and (6).

5. (5)

   For the purposes of this rule, “passported activities” of an EEA PTV firm means regulated activities that meet the following conditions:

   1. (a)

      they are included in the permission of the EEA SMCR firm under the EEA Passport Rights (Amendment, etc., and Transitional Provisions) (EU Exit) Regulations 2018; and

   2. (b)

      the firm was entitled to carry them on in the United Kingdom immediately before IP completion day by virtue of section 31(1)(b) or (c) of the Act as it was in force immediately before IP completion day.

6. (6)

   For the purposes of this rule, “passported activities” of an EEA SMCR firm also mean regulated activities that were subject to an EEA right applicable to the category of firm into which the EEA SMCR firm falls and which the firm is entitled to carry on in its Home State. For these purposes EEA right has the meaning that it did in Schedule 3 of the Act as it was in force immediately before IP completion day and Home State has the meaning that it did in the Glossary as it was in force immediately before IP completion day.

A person (referred to as ‘A’ in this rule) is not performing an FCA governing function (referred to as the ‘particular’ FCA governing function in this rule) in relation to a PRA-authorised person (referred to as ‘B’ in this rule), at a particular time, if:

1. (1)

   A has been approved by the PRA to perform any PRA-designated senior management function in relation to B;

2. (2)

   throughout the whole of the period between the time of the PRA approval in (1) and the time in question, A has been the subject of a current PRA approved person approval to perform a PRA-designated senior management function in relation to B;

3. (3)

   at the time of the PRA approval referred to in (1), A was not subject to a current FCA approved person approval to perform the particular FCA governing function in relation to B;

4. (4)

   as part of the application for the PRA approval referred to in (1), B notified the PRA that A would start to perform what would otherwise have been the particular FCA governing function (referred to as the ‘potential’ FCA governing function in this rule) at or around the time of the PRA approval in (1); and

5. (5)

   A started to perform the potential FCA governing function at, or around the time of, the PRA approval in (1) and has continued to perform it up to the time in question (ignoring any occasions on which A has temporarily ceased to perform that function because, for example, of holidays or illness).

Unless the context otherwise requires, in SUP 10C.10 (Application for approval and withdrawing an application for approval) to SUP 10C.15 (Forms and other documents and how to submit them to the FCA), where reference is made to a firm, this includes an applicant for Part 4A permission and other persons seeking to carry on regulated activities as an SMCR firm.