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FSA proposes extension of controlled function powers

FSA Financial Services Authority 480

The FSA has proposed extending the powers of the Financial Conduct Authority so people can be held responsible for failures outside their existing controlled function.

The regulator published a consultation paper last week outlining the approach of the Financial Conduct Authority and the Prudential Regulation Authority to approved persons.

The paper includes a series of changes to the ‘Statements of Principle and Code of Practice for Approved Persons’, or APER.

Currently, individuals are only responsible for failures in their own specific controlled function. The FSA wants to extend this so people can be held responsible for the failure of any controlled function they interact with.

The consultation says: “The standards laid out in both regulators’ versions of APER will apply beyond the function for which the person has been approved.

“The FCA’s APER will therefore apply to the performance of any activity, insofar as it relates to the carrying on of a regulated activity by the firm which originally sought the approval.

“We recognise that extending the scope of APER to also include activities outside of a person’s control function could be seen as a significant change. However, it would make it clear that we expect individuals to apply the same standards of behaviour in their wider roles regardless of whether specific activities are caught under a controlled function or not.”

AWD Chase de Vere head of communications Patrick Connolly says: “It seems reasonable that if someone has a significant influence over another function, that person should be held partly responsible if something goes wrong.”


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