FCA Approved Persons

An approved person is an individual who has been approved by the FCA to perform one or more controlled functions on behalf of an authorised firm. To become an approved person, a candidate must first apply to the FCA. Approval must be obtained before a person can perform a controlled function.

What is the FCA’s fit & proper test?

Before approving an individual, the FCA will assess whether the candidate is fit and proper to perform the controlled function(s) applied for.

The FCA consider three criteria:

  1. Honesty, Integrity & Reputation
  2. Competence & Capability
  3. Financial Soundness

As part of the fit and proper test, the candidate will be asked about their current and previous circumstances, including (but not limited to):

What are the responsibilities of an approved person(s)?

Being an approved person brings with it a number of important responsibilities. They have a duty to be aware of and comply with FCA regulatory requirements and expectation. Specifically, approved persons must:

Non-compliance with these regulatory requirements may result in the FCA taking enforcement action against the approved person.

Who should be the approved person(s)?

Approved persons performing controlled functions are generally:

Does an approved person have to be a controller of the business?

No, the approved person does not need to be a controller but usually is.

Rules about controllers of businesses

A controller is any individual with a shareholding of 20% or more in an authorised firm.  For example, if a limited company has four directors each holding 25% of the shares, then the business would have to register all four as controllers. You will need to complete a ‘controllers and influencers’ form as part of your application.

Note:  Personal details of both the approved person(s) and the controllers have to be supplied with the application, including copies of their CVs.

What is a controlled function?

Controlled functions are a list of functions that relate to the carrying on of a regulated activity by a firm.  When applying for authorisation, the applicant firm must put forward at least one person to be an approved person who will then be responsible for performing the controlled function(s).

Typical controlled functions include (but are not limited to):

In summary

An approved person is someone who carries out controlled functions. A controller is some with a shareholding of 20% or more in the business.  A controller does not necessarily have to be an approved person (but usually is). Both approved persons and controllers have to be registered with the FCA as part of the application process.

Where are the forms for registering approved persons & controllers?

The forms are available via the main application screen on Connect (the FCA application software) and are at the foot of the page and referred to as ‘additional related applications’.

This article is based on information found on the FCA’s website