Employees at the holding companies of regulated firms may need to apply for FSA approved person status under new rules proposed today.
In an extension to its approved persons regime consultation, the regulator says individuals that are likely to exert a "significant influence" on a firm will need to be approved.
The rules are part of the FSA's supervisory enhancement programme (SEP), which aims to clarify what the FSA expects of individuals who currently perform a 'significant influence' function at a regulated firm.
In its original paper, the FSA stated it would place greater emphasis on the role of senior management, including non-executive directors (NEDs).
Today it extends the rules to include "those persons employed by an unregulated parent undertaking or holding company", as well as those deemed "proprietary traders who are not senior managers but who are likely to exert significant influence on a firm".
In addition, it has amended the application of the approved persons regime to UK branches of overseas firms based outside the EEA.
"It is important that directors and senior managers at firms understand their regulatory obligations and have the relevant competencies and experience to carry out their roles with integrity," Graeme Ashley-Fenn, FSA director of permissions, decisions and reporting division, says.
"Since October 2008, the FSA has carried out 115 interviews for ‘significant influence' posts at high impact firms. Nine applications have been withdrawn as a result.
"Once in post, where individuals fail to meet the required standards the FSA will consider enforcement action."
These changes will come into effect on 6 August 2009 with a transitional period of six months. Firms should now begin assessing which individuals require approval and submit timely applications to comply with the end of the transitional period.
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