On 7 June 2019, the FCA published its latest Quarterly Consultation (No. 24).
The Quarterly Consultation provides for the following proposed changes to the FCA Handbook:
- chapter 2 – modifications to General Provision (GEN) and fees and levy rate rules (FEES) for 2019/20 in relation to Gibraltar based firms;
- chapter 3 – the introduction of new notification procedures for changes to the management body;
- chapter 4 – amending Handbook form SUP10C Annex 10D: Statement of Responsibilities; and
- chapter 5 – updating Handbook form SUP 8 Annex 2 Application form for a waiver or modification of rules.
In chapter 3 the FCA proposes changes to its existing MiFID supplementary forms to provide an easy way for firms to provide it with the required information and to help ensure that FCA solo-regulated firms subject to MiFID and CRD IV remain compliant with their requirements following the commencement of the Senior Managers and Certification Regime (SM&CR).
The issue of competent authorities being required to receive certain information on all members of the management body at MiFID firms previously arose when the SM&CR was introduced for dual-regulated banking firms in March 2016 and insurers in December 2018. The approach taken then by the PRA was to introduce a new notification form (Form M). This is a streamlined version of the application form to perform senior management function (SMF) roles (Form A) and ensures sufficient information is received on non-SMF Directors to meet MiFID requirements.
For solo-regulated firms, the FCA proposes to amend the two supplementary MiFID forms that it already uses for Approved Persons and SMF managers requiring FCA approval. These are: (i) SUP 10A Annex 10 – MiFID Article 4 APER Information Form; and SUP 10C Annex 11 – MIFID members of the management body and key function holders – Article 4 Information Form (SMR).
The changes will allow both firms and the FCA to remain compliant with MiFID requirements following the extension of the SM&CR, as firms will still be able to notify the FCA of changes in their management bodies with respect to Directors and non-executive directors who are not senior managers. These notifications would be made through the FCA’s Connect system.
Following the extension of the SM&CR to solo-regulated firms, the Statements of Principle and Code of Practice for Approved Persons (APER) will be replaced by conduct rules in the FCA Handbook. As a result, the FCA will be renaming the current ‘MiFID Article 4 APER Information Form’ to ‘Notification Procedures for Changes to the Management Bodies for non-SMF Directors’. This form will be moved to Chapter 15 of the Supervision sourcebook (Notifications to the FCA).
The deadline for responses to the Quarterly Consultation is 7 August 2019.