Passing the test

The FSA has now made changes to application form 'A' for approved persons. The revised form will require all firms to provide supplementary information based on the competence and capability of the candidate.

In particular firms will be asked to provide information on why the appointment complements the firm's business strategy, activity and the markets in which it operates, and how the appointment was agreed, including details of any discussions at governing body level where this is appropriate.

In addition, the FSA will interview candidates for all chief executive, CF3, non-executive chairman, CF2, and finance director, CF1, controlled functions at groups and firms classed as high impact. The FSA will also be asking all firms to confirm the due diligence carried out on candidates for SIF roles as part of the application process.

The FSA has also confirmed that it will no longer apply controlled functions CF9, EEA investment business oversight, and CF10, compliance oversight, in relation to individuals with responsibility for non-MiFID business carried out by incoming European Economic Area firms, including credit institutions.

Due to MiFID, the FSA is unable to apply controlled function CF9 and CF10 in relation to MiFID business carried out by incoming EEA firms. The reason for this is that these controlled functions fall within the responsibility of the home state regulator.

The FSA believes that it can supervise CF9 and CF10 activities through the remaining controlled functions set out in SUP 10.1.13R and SUP 10.1.14R and the statements of principle and code of practice for approved persons.

All CF9s and CF10s are to be withdrawn from the FSA register. The waiver by consent disapplying CF9 and CF10 for incoming EEA firms will also be withdrawn as it is no longer necessary.

Simon Lovegrove is a lawyer with the financial services group at Norton Rose LLP