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FSA reminds CEOs to carefully vet appointments

The FSA has written to the CEOs of 5,000 relationship-managed firms reminding them that responsibility for assessing whether candidates are fit and proper to carry out a role rests with firms.

The letter reinforces how the FSA’s regulatory approach applies to approving and supervising senior personnel performing significant influence functions.

It says CEOs should ensure there are robust recruitment, referencing and due diligence processes in place.

As part of the SIF approval regime, the FSA has said it will undertake close vetting of appointments and will expect to interview candidates applying for SIF roles.

The FSA says: “Firms are being encouraged to engage with the FSA early in the recruitment process and for major firms, this should be at the point of drawing up a shortlist rather than waiting until the preferred candidate stage.”

Firms are also urged to provide information with their applications and the rationale they have used to conclude that the candidate is fit to proper to perform the role.

In the 12 months since October 2008 the FSA has conducted 172 SIF interviews, resulting in 18 candidates withdrawing their applications.

FSA director of permissions, decisions and reporting Graeme Ashley-Fenn says: “It is crucial that at a time when effective governance has never been more important, candidates have the right levels of competence and capability to perform these senior roles and that they are fully aware of their responsibilities.

“The onus is on firms to ensure candidates applying for influential positions are fit and proper to perform the role. Our individually tailored approval interviews will help us assess whether the individual has the right experience and understanding but also whether they will enhance the overall management strength and insight of the firm.”


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