171.Section 18 amends section 59 of FSMA. Under section 59, the appointments of all individuals who are to perform certain roles in a financial services firm require the prior approval of the regulator (the FCA or the PRA) that has specified that role as a “controlled function” in its rules. Subsection (2) omits section 59(5) of FSMA. This has the effect of enabling the FCA to designate any role in any authorised person as a controlled function. If the FCA specifies a role which meets the definition of a senior management function in new section 59ZA, new section 59(6A) (inserted by subsection (4)) provides that the controlled function must be designated as a senior management function in the FCA’s rules. “Relevant authorised person” is defined by section 71A of FSMA, which is inserted by section 33.
172.Subsection (3) inserts into FSMA a new section 59(6) providing for the PRA to have the power only to specify as controlled functions roles in PRA-authorised persons which meet the definition of a senior management function in new section 59ZA. If the PRA does so and the authorised person is a relevant authorised person, new section 59(6B) (inserted by subsection (4)) provides that the controlled function must be designated as a senior management function in the PRA’s rules.