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FCA proposes clarification to rules around long term leave for Senior Managers

On 4 December 2020, the FCA published its Quarterly Consultation (No 30).

One of the proposals on which both the FCA and the PRA will consult for 2 months relates to long-term absence of Senior Managers.  Specifically, the FCA and PRA propose to clarify the status of a Senior Manager who takes temporary leave for longer than 12 weeks (“long-term leave”) and the notifications required of firms in these circumstances.

Both the FCA and the PRA accept that their guidance is not sufficiently clear on whether Senior Managers can retain approval during periods of long-term leave.  As such, they propose to implement the following changes:

 

Senior Manager long-term leave
Firm intends to keep the role open
Firm aware that individual will not return to role

01. Firm will NOT need to notify the FCA/PRA that the individual’s approval should be removed.1

01. Firm should notify FCA/PRA that individual’s approval should be removed.1

02. Firm should notify FCA/PRA that the individual is on long-term leave.2

03. The Financial Services Register will continue to show the individual’s approval to perform the relevant SMF(s).

04. Firm should appoint another individual to perform the SMF during the interim period.

05. Firms will NOT be required to seek re-approval for the individual once they have returned to their role.

06. Firms are expected to re- allocate any prescribed responsibilities to another individual performing a SMF in the firm.3

07. Where it becomes clear that the individual will not be returning to their role, the firm should notify the FCA/PRA that the individual’s approval should be removed.1

1Using Form C (Notice of ceasing to perform controlled function) or Form E (internal transfer of approved person).

2 Using amended Form D (Changes to personal information/application details and conduct breaches / disciplinary action related to conduct).

3 Using Form J (Notification of Significant Changes in Responsibilities of a Person Performing a Senior Management Function).

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