C6 Part V Performance of Regulated Activities
Approval
C1I1C2C3C459 Approval for particular arrangements.
C51
An authorised person (“A”) must take reasonable care to ensure that no person performs a controlled function under an arrangement entered into by A in relation to the carrying on by A of a regulated activity, unless F3the appropriate regulator approves the performance by that person of the controlled function to which the arrangement relates.
2
An authorised person (“A”) must take reasonable care to ensure that no person performs a controlled function under an arrangement entered into by a contractor of A in relation to the carrying on by A of a regulated activity, unless F4the appropriate regulator approves the performance by that person of the controlled function to which the arrangement relates.
F23
“Controlled function”—
a
in relation to the carrying on of a regulated activity by a PRA-authorised person, means a function of a description specified in rules made by the FCA or the PRA, and
b
in relation to the carrying on of a regulated activity by any other authorised person, means a function of a description specified in rules made by the FCA.
4
“The appropriate regulator”—
a
in relation to a controlled function which is of a description specified in rules made by the FCA, means the FCA, and
b
in relation to a controlled function which is of a description specified in rules made by the PRA, means the PRA with the consent of the FCA.
5
The FCA may specify a description of function under subsection (3)(a) or (b) only if, in relation to the carrying on of a regulated activity by an authorised person, it is satisfied that the function is—
a
a customer-dealing function, or
b
a significant-influence function.
6
The PRA may specify a description of function under subsection (3)(a) only if, in relation to the carrying on of a regulated activity by a PRA-authorised person, it is satisfied that the function is a significant-influence function.
7
In determining whether a function is a significant-influence function, the FCA or the PRA may take into account the likely consequences of a failure to discharge the function properly.
7A
“Customer-dealing function”, in relation to the carrying on of a regulated activity by an authorised person (“A”), means a function that will involve the person performing it in dealing with—
a
customers of A, or
b
property of customers of A,
in a manner substantially connected with the carrying on of the activity.
7B
“Significant-influence function”, in relation to the carrying on of a regulated activity by an authorised person, means a function that is likely to enable the person responsible for its performance to exercise a significant influence on the conduct of the authorised person's affairs, so far as relating to the activity.
F67C
A regulator may not exercise the power in subsection (3) so as to provide for a function to be a controlled function in relation to the carrying on of the regulated activity of managing an AIF by an AIFM which—
a
is also an AIF;
b
does not manage any AIF other than itself;
c
is a body corporate; and
d
is not a collective investment scheme.
8
Neither subsection (1) nor subsection (2) applies to an arrangement which allows a person to perform a function if the question of whether he is a fit and proper person to perform the function is reserved under any of the single market directives F1or the emission allowance auctioning regulation to an authority in a country or territory outside the United Kingdom.
F59
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10
“Arrangement”—
a
means any kind of arrangement for the performance of a function of A which is entered into by A or any contractor of his with another person; and
b
includes, in particular, that other person’s appointment to an office, his becoming a partner or his employment (whether under a contract of service or otherwise).
11
“Customer”, in relation to an authorised person, means a person who is using, or who is or may be contemplating using, any of the services provided by the authorised person.
Pt. V (ss. 56-71) modified (1.12.2001) by S.I. 2001/3592, arts. 1(2), 114(3)(a), 128(3)(a) (with art. 23(2))