Financial Services (Banking Reform) Act 2013

Financial Services (Banking Reform) Act 2013

2013 CHAPTER 33

Commentary

Part 4 – Conduct of Persons Working in Financial Services Sector

Amendments of FSMA

Section 29: Certification of employees by relevant authorised persons

193. Section 29 inserts new sections 63E and 63F in FSMA. Under new section 63E the regulator may specify in its rules functions which, although not controlled functions requiring approval, are “significant-harm functions” (that is, functions which may give rise to a risk of significant harm either to the firm or to its customers). A relevant authorised person may not employ a person to perform a function that has been specified under this power unless the relevant authorised person has been able to certify under new section 63F that the person concerned is a fit and proper person to exercise the function. The regulators are required to keep the power to specify functions under review, with a view to minimising the risk that anyone would be employed to perform a significant-influence function which they are not a fit and proper person to perform.

194. New section 63F sets out the rules under which a relevant authorised person (“RAP”) may issue a certificate to one of its employees. The RAP must be satisfied that the person concerned is a fit and proper person to perform the function covered by the certificate, having considered whether they have the qualifications, training, level of competence and personal characteristics required by rules made by the regulators in relation to the function in question. The certificate will describe the role to which the person concerned is being appointed, and will confirm that the person is fit and proper to act in that role. It will be valid for twelve months. Where the RAP decides not to issue such a certificate, it must give the person concerned written notice of that fact, including details of the steps the RAP proposes to take in consequence and the reasons for them.