Pre Employment Screening & Validation Services

1D Mereworth Business centre,
Hermitage Farm, Danns Lane,
Wateringbury, Kent. ME18 5LW

Tel: 01622 817580
Fax: 01622 813675
email:

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FCA Compliant Screening including
Approved Person Regime & Controlled Functions

The FCA’s regulatory objectives are:

  • 1. Maintaining market confidence in the financial system
  • 2. Public awareness and promoting public understanding of the financial system
  • 3. The protection of consumers, and securing the appropriate degree of protection for consumers
  • 4. The reduction of financial crime by reducing the extent to which it is possible for a regulated person/company to be used for a purpose connected with financial crime

To comply with the regulatory objectives FCA regulated companies are required to screen anyone in an Approved role and carrying out a controlled function


FCA Regulated companies must be satisfied that all employees in an Approved Function are Fit & proper to perform the controlled function applied for. The act does not describe the measures required to be taken into account when determining the Fitness & Propriety but the onus is on the company to demonstrate that the candidate is competent to carry out the controlled function.


MIFID Under Article 5(1)(d) of the MiFID Implementing Directive and Article 31 and 32 of MiFID, the requirement to employ personnel with the knowledge, skills and expertise necessary for the discharge of the responsibilities allocated to them is reserved to the firm's Home State. Therefore, in assessing the fitness and propriety of a person to perform a controlled function solely in relation to the MiFID business of an incoming EEA firm, the FCA will not have regard to that person's competence and capability.


Approved Persons

Once someone has been approved by the FCA they are allowed to perform a “controlled functions” on behalf of an authorised firm. In order to carry out a controlled function, the indevidual must have been approved by the FCA to that controlled function/s and must adhere to all the Principles and Code of Conduct.


FCA Regulated companies must be satisfied that all employees in an Approved Function are Fit & proper to perform the controlled function applied for. The act does not describe the measures required to be taken into account when determining the Fitness & Propriety but the onus is on the company to demonstrate that the candidate is competent to carry out the controlled function.


Prior Approval must be obtained before a person can perform any controlled function and approval cannot be applied for ahead of a company becoming Authorised


Controlled Functions

A controlled function relates to the carrying on of a regulated activity by a firm, which is specified, under section 59 of the Financial Services and Markets Act.

Controlled functions applicable for UK and overseas firms

  • • CF1  Directors
  • • CF2  Non-Executive Directors
  • • CF3  Chief Executives
  • • CF4  Partners
  • • CF5  Directors of an unincorporated association
  • • CF6  Small friendly society functions

Significant influence functions (all firms, covering the activities of directors and senior managers):

  • • CF8  Apportionment and oversight (Non-MiFID business only)
  • • CF10  Compliance oversight
  • • CF11  Money laundering reporting
  • • CF12  Actuarial function (in insurance cases)
  • • CF12A  With profits actuary function
  • • CF12B  Lloyds actuary
  • • CF28 System and controls function
  • • CF29 Significant management function

Customer functions:

  • • CF30  Customer function

Controlled function applicable for incoming EEA firms

Significant influence functions

  • • CF9 EEA investment business oversight function (Non-MiFID business only)
  • • CF10 Compliance oversight function (Non-MiFID business only)
  • • CF11 Money laundering reporting function
  • • CF12 Actuarial function
  • • CF12A With profits actuary function
  • • CF12B Lloyd’s Actuary function
  • • CF29 Significant management function

Customer functions:

  • • CF30  Customer function

On 10 November 2007, the FCA converted the following controlled functions:

 

CF 13-15 has been merged to become CF 28 (Systems and Controls function).

CF 16-20 has been merged to become CF 29 (Significant Management function).

CF 21-27 has been merged to become CF30 (Customer function).

 

The Register has now been updated to reflect these changes. Previous controlled function(s) have been end-dated as at 31/10/2007, with the new function(s) beginning 1/11/2007.

 


Consequences of Approval

The “Statements of Principle” and “Code of Practice” specifies the behaviour and conduct that the employee is expected to comply with once in an Approved position. The “Code of Practice” also details behaviour that does not comply with the principles.

The “Statements of Principle” specifies 7 key principles of which 4 apply to all in approved functions and then 3 that apply to persons who are involved in roles that include functions of significant influence.



Withdrawal of Approval

The FCA may decide to withdraw approval if they decide that the approved person is no longer regarded as fit and proper. The factors considered are the same as those applied to the approval process.

The decision to revoke approval is based on whether the individual’s knowledge, skills and expertise that are necessary to the discharge their responsibilities are no longer regarded as fit and proper or has failed to comply with the Principles and Code of Practice.

Screening Levels

Industry Quotes


“30% of job applications contain discrepancies. 85% of serious fraud is committed by companies own staff.”

Ernst and Young's 8th global fraud survey

Quote of the Week


“"Life is an opportunity, benefit from it. Life is beauty, admire it. Life is a dream, realize it. Life is a challenge, meet it. Life is a duty, complete it. Life is a game, play it. Life is a promise, fulfill it. Life is sorrow, overcome it. Life is a song, sing it. Life is a struggle, accept it. Life is a tragedy, confront it. Life is an adventure, dare it. Life is luck, make it. Life is too precious, do not destroy it. Life is life, fight for it." .”
Mother Teresa


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