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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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There is one comment at the moment, we would love to hear your opinion too.

  1. I seem to recall that when Hector Sants appeared before the TSC in March last year he was asked to name just which individuals had been responsible for the FSA’s assorted failings in various aspects of its statutory responsibilities.

    But no matter how many times the question was repeated, all he would say was that the faults were attributable to failings in the collective culture within the FSA rather than being attributable to any particular individual/s (the exception, of course, having been Clive Briault, and we know all too well just what his “punishment” was).

    So, as usual, it’s a case of one rule for the industry but quite another for the regulator itself. I don’t have a problem with individuals being held to account for wrongdoing, but are we not reasonably entitled to expect a bit of quid pro quo?

    At least that might give us some sense that the regulator applies to its own people the same standards of accountability as it demands from the firms it regulates.

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