The Approved Persons Regime (APER) continues to be used by Benchmark Administrators and Appointed Representatives (ARs). In recognition that firms may need longer periods of temporary arrangements if, for example, an Approved Person is absent because of coronavirus, or if recruitment to replace an Approved Person has been delayed due to the pandemic, the FCA has set out its expectations in regards to certain aspects of APER on its website.
Below is a summary of the clarifications.
12 week rule
The 12-week rule allows an individual to cover for an Approved Person without being approved, where the absence is temporary or reasonably unforeseen, and the appointment is for less than 12 consecutive weeks. To provide further flexibility to firms at this time, the FCA intends on issuing a modification by consent to the 12-week rule, which will allow temporary arrangements for up to 36 weeks.
The FCA has confirmed that if staff are furloughed during this period for reasons relating to the coronavirus, they will not require re-authorisation or approval upon their return to work.
Notification and documentation
Where firms seek modifications to the 12 week rule or seek to reintroduce furloughed staff – they will not need to notify the FCA by way of Form D. They will, however, be required to keep internal records of these temporary measures.
Responsibilities of the Principal Firm
The FCA also reminded those firms that use ARs of the responsibilities of Principal Firms in regards to their ARs, namely:
- the controllers, directors, partners, proprietors and managers of an AR are fit and proper
- the AR is solvent and suitable to act for the firm
- the principal has adequate controls over the AR’s activities
- the appointment does not prevent the firm from satisfying and continuing to satisfy the threshold conditions
- the principal is able to monitor and enforce compliance with relevant requirements.
To view the FCA webpage on the above, please click here.