New regulators to get wider approved persons powers

With the Financial Conduct Authority and Prudential Regulation Authority coming into existence early next year, the FSA yesterday issued a consultation paper on how regulatory reform will affect the Approved Persons regimes.

Among the key provisions will be to allow both regulators to discipline an approved person who has breached a statement of principle that it has issued, irrespective of whether or not it has approved the individual.

Furthermore, these statements of principle, which are contained in the Code of Practice for Approved Persons, could relate to the conduct expected not just in relation to the controlled functions they perform, but also in relation to other functions, where they relate to the firm for which they hold their approval for carrying on regulated activities.

Although it accepted this widened scope could be seen as a "significant change", the FSA said it would make clear the standards of behaviour expected.

"We do not believe this will result in any significant changes for most people - for example, we would expect that the vast majority of approved persons still act with integrity and due skill, care and diligence when they perform aspects of their role that fall outside of their controlled function," it added.

The consultation paper also addressed the ongoing efforts by the FSA to introduce a mortgage customer function (CF31).

While committed to introducing the function, it said there would be a delay as an information systems programme of work, a result of the regulatory upheaval, was taking priority.

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• Topics
• Regulation
• FSA
• FCA
• PRA (Prudential Regulatory Authority)
• approved persons