Approved persons carry out certain activities on a firm's behalf and must be regulated by us. Learn about our requirements, conduct rules and 'fit and proper' test.
An 'approved person' is someone who we approve to do one or more activities for an authorised firm. We call these activities 'controlled functions'. A subset of controlled functions are 'senior management functions' (SMFs).
Whether you're the firm applying or the person or firm that's the candidate to be an approved person, you should read this page and any other relevant pages in this section about:
At all times, approved persons must:
Approved persons have a responsibility to be aware of – and comply with – our regulatory requirements and understand how they apply to carrying out each controlled function.
We use this as a benchmark to assess whether a candidate is suitable to perform a controlled function or SMF – it's not an exam they have to pass.
Before submitting your application, your firm must be confident that the candidate is fit and proper to perform the role. If we're not satisfied, we won't approve them (this applies when we're reassessing approved persons too).
We look for the candidate's:
We expand on this below. There's more detail in our Handbook.
The individual your firm is applying for must understand the importance of being honest with us from the start.
Your application must provide information on everything we ask for. If in doubt, let us know as much as possible, even if it may not seem relevant. And where you think that something you're disclosing about the individual shouldn't affect their fitness or propriety, explain why.
Giving us false or misleading information may be a criminal offence.
If you're not sure about disclosing convictions, you should seek legal advice.
Before applying, you must establish your own criteria of due diligence.
To help, here are some of the things we look for when assessing the candidate’s fitness and propriety:
Make sure that your firm and the candidate complete the relevant parts of your application, and that it's accurate and discloses all information. You should both then sign 2 copies, retaining one and sending us the other.
You'll need references from the candidate’s previous employer(s) – unless you're a sole trader, in which case you don't need to seek regulatory references for yourself.
‘Regulatory references’ (references from other authorised firms) are particularly important. If you're applying for SMF candidates or Non-Executive Directors (NEDs) who aren't Senior Managers, your firm must:
And at any time, not just in the past 6 years, you must tell us if the candidate was involved in a case of serious misconduct.
Your firm will also need to update regulatory references where new, significant information comes to light.
Authorised firms must give your firm a reference as soon as possible after you ask for one, in line with our Handbook rules.
If they don't do this, you should:
Our conduct rules apply to all employees within a firm, not just approved persons.
There are 2 tiers of conduct rules which apply to all firms.
The first is a set of general rules that apply to most employees and directors in a firm. The second set of rules only applies to Senior Managers, and in one case also to NEDs.
Tier 1: individual conduct rules
Tier 2: Senior Manager conduct rules
We will take disciplinary action, which could include fines, suspensions of approval, imposing restrictions and issuing a public statement about the misconduct.
Examples of approved persons not complying include if they act in a way that's inconsistent with the rules for SMFs, or if they knowingly work together to breach their firm’s rules.