Part V U.K. Performance of Regulated Activities

Modifications etc. (not altering text)

C1 Pt. 5 modified (1.12.2001) by S.I. 2001/3592, arts. 1(2), 114(3)(a), 128(3)(a) (with art. 23(2))

C2 Pt. 5 modified (7.11.2018) by The EEA Passport Rights (Amendment, etc., and Transitional Provisions) (EU Exit) Regulations 2018 (S.I. 2018/1149), regs. 1(2), 23 (with regs. 4, 22, 26(1)(2)) (as amended (31.1.2020 immediately before exit day) by The Financial Services (Consequential Amendments) Regulations 2020 (S.I. 2020/56), regs. 1, 6(2))

C3 Pt. 5 modified by S.I. 2018/1149, reg. 69 (as inserted (1.3.2019) by The Financial Services Contracts (Transitional and Saving Provision) (EU Exit) Regulations 2019 (S.I. 2019/405), regs. 1(2), 4)

[F1 Certification of employees U.K.

Textual Amendments

F1 Ss. 63E, 63F inserted (25.7.2014 for specified purposes, 7.3.2016 for the insertion of s. 63F otherwise, 7.3.2017 in so far as not already in force) by Financial Services (Banking Reform) Act 2013 (c. 33), ss. 29, 148(5); S.I. 2014/1819, art. 2(2)(b); S.I. 2015/490, art. 2(1)(a)(2) (with savings and transitional provisions in S.I. 2015/492 (as amended by S.I. 2015/1660))

63E Certification of employees by [F2 relevant] authorised persons U.K.

(1) [F3 A relevant] [F3 An] authorised person (“A”) must take reasonable care to ensure that no employee of A performs a specified function under an arrangement entered into by A in relation to the carrying on by A of a regulated activity, unless the employee has a valid certificate issued by A under section 63F.

(2) “Specified 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.

(3) The FCA may specify a description of function under subsection (2)(a) or (b) only if, in relation to the carrying on of a regulated activity by [F4 a relevant] [F4 an] authorised person of a particular description—

(a) the function is not a controlled function in relation to the carrying on of that activity by [F4 a relevant] [F4 an] authorised person of that description, but

(b) the FCA is satisfied that the function is nevertheless a significant-harm function.

(4) The PRA may specify a description of function under subsection (2)(a) only if, in relation to the carrying on of a regulated activity by a [F5 relevant] PRA-authorised person of a particular description—

(a) the function is not a controlled function in relation to the carrying on of that activity by a [F5 relevant] PRA-authorised person of that description, but

(b) the PRA is satisfied that the function is nevertheless a significant-harm function.

(5) A function is a “significant-harm function”, in relation to the carrying on of a regulated activity by an authorised person, if—

(a) the function will require the person performing it to be involved in one or more aspects of the authorised person's affairs, so far as relating to the activity, and

(b) those aspects involve, or might involve, a risk of significant harm to the authorised person or any of its customers.

(6) Each regulator must—

(a) keep under review the exercise of its power under subsection (2) to specify any significant-harm function as a specified function, and

(b) exercise that power in a way that it considers will minimise the risk of employees of [F6 relevant] authorised persons performing significant-harm functions which they are not fit and proper persons to perform.

F7 (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8) In this section—

• “controlled function” has the meaning given by section 59(3);

• [F8 “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;]

• [F8 “customer”—

  (a)

  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; and

  (b)

  in relation to an authorised person carrying on a regulated claims management activity, also means (so far as not included in paragraph (a)) a person who has or may have a claim within the meaning of section 419A in respect of which the authorised person is carrying on a regulated claims management activity.]

• [F9 “relevant PRA-authorised person” means a PRA-authorised person that is a relevant authorised person.]

(9) In this section any reference to an employee of a person (“A”) includes a reference to a person who—

(a) personally provides, or is under an obligation personally to provide, services to A under an arrangement made between A and the person providing the services or another person, and

(b) is subject to (or to the right of) supervision, direction or control by A as to the manner in which those services are provided.

(10) [F10 For the meaning of “relevant authorised person”, see section 71A.]]

Textual Amendments

F2 Word in s. 63E heading omitted (13.9.2018 for specified purposes, 18.7.2019 for specified purposes, 9.8.2019 for specified purposes, 10.12.2019 for specified purposes, 31.3.2021 for specified purposes) by virtue of Bank of England and Financial Services Act 2016 (c. 14), s. 41(3), Sch. 4 para. 11(2); S.I. 2018/990, reg. 2(1)(2)(4) (with regs. 3-6); S.I. 2019/1136, reg. 2(2)(3)(6) (with regs. 3, 7)

F3 Word in s. 63E(1) substituted (13.9.2018 for specified purposes, 18.7.2019 for specified purposes, 9.8.2019 for specified purposes, 10.12.2019 for specified purposes) by Bank of England and Financial Services Act 2016 (c. 14), s. 41(3), Sch. 4 para. 11(3); S.I. 2018/990, reg. 2(1)(2)(4) (with regs. 3-6); S.I. 2019/1136, reg. 2(2)(3) (with reg. 7)

F4 Word in s. 63E(3) substituted (13.9.2018 for specified purposes, 18.7.2019 for specified purposes, 9.8.2019 for specified purposes, 10.12.2019 for specified purposes) by Bank of England and Financial Services Act 2016 (c. 14), s. 41(3), Sch. 4 para. 11(4); S.I. 2018/990, reg. 2(1)(2)(4) (with regs. 3-6); S.I. 2019/1136, reg. 2(2)(3) (with reg. 7)

F5 Word in s. 63E(4) omitted (13.9.2018 for specified purposes, 18.7.2019 for specified purposes, 9.8.2019 for specified purposes, 10.12.2019 for specified purposes) by virtue of Bank of England and Financial Services Act 2016 (c. 14), s. 41(3), Sch. 4 para. 11(5); S.I. 2018/990, reg. 2(1)(2)(4) (with regs. 3-6); S.I. 2019/1136, reg. 2(2)(3) (with reg. 7)

F6 Word in s. 63E(6)(b) omitted (13.9.2018 for specified purposes, 18.7.2019 for specified purposes, 9.8.2019 for specified purposes, 10.12.2019 for specified purposes) by virtue of Bank of England and Financial Services Act 2016 (c. 14), s. 41(3), Sch. 4 para. 11(6); S.I. 2018/990, reg. 2(1)(2)(4) (with regs. 3-6); S.I. 2019/1136, reg. 2(2)(3) (with reg. 7)

F7 S. 63E(7) omitted (31.12.2020) by virtue of The Financial Services and Markets Act 2000 (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/632), regs. 1(3), 26; 2020 c. 1, Sch. 5 para. 1(1)

F8 Words in s. 63E(8) substituted (E.W.S.) (29.11.2018 for specified purposes, 1.4.2019 in so far as not already in force) by The Financial Services and Markets Act 2000 (Claims Management Activity) Order 2018 (S.I. 2018/1253), arts. 1(2)(3), 91(4)

F9 Words in s. 63E(8) omitted (13.9.2018 for specified purposes, 18.7.2019 for specified purposes, 9.8.2019 for specified purposes, 10.12.2019 for specified purposes) by virtue of Bank of England and Financial Services Act 2016 (c. 14), s. 41(3), Sch. 4 para. 11(7); S.I. 2018/990, reg. 2(1)(2)(4) (with regs. 3-6); S.I. 2019/1136, reg. 2(2)(3) (with reg. 7)

F10 S. 63E(10) omitted (13.9.2018 for specified purposes, 18.7.2019 for specified purposes, 9.8.2019 for specified purposes, 10.12.2019 for specified purposes) by virtue of Bank of England and Financial Services Act 2016 (c. 14), s. 41(3), Sch. 4 para. 11(8); S.I. 2018/990, reg. 2(1)(2)(4) (with regs. 3-6); S.I. 2019/1136, reg. 2(2)(3) (with reg. 7)