FSA streamlines approved persons regime

The FSA confirmed its intention to merge various controlled functions in August with the publication of CP06/15 ‘Reforming the Approved Persons regime’, including feedback on CP05/10, which first looked at the issue. The individual systems and controls functions (CF13-15) that cover finance, risk management and internal audit will be combined into a single new CF28, ‘Systems and controls’. CF16-20, the significant management functions for designated investment business, other business operations, insurance underwriting, financial resources and settlement, will also be replaced by a CF29 ‘Significant management’ function. The regulator notes that the individual job roles will persist under the new broader controlled functions and it will still expect firms to ensure that the employees who fill them meet the associated standards when they apply for approval. CF28 and CF29 will take effect on 1 November 2007. The sole trader function, CF7, will cease to operate from 1 February 2007. A sole trader’s skills and control framework will continue to be reviewed during corporate authorisation and if the individual engages in designated investment business they will still be approved elsewhere under the Approved Persons regime.