The Financial Conduct Authority has announced that it is now possible for another person to deputise for an absent senior manager for a period of up to 36 weeks, instead of the usual 12 weeks, where the reason for the manager’s absence is related to the coronavirus outbreak.
The amendment to SUP 10.3.13R in the Handbook applies to all authorised firms and lasts until April 30 2021.
The special permission applies where one of two circumstances applies:
- An individual who has previously been approved as a Senior Manager is absent due to Covid-19
- The recruitment process to replace a Senior Manager is delayed due to the health emergency
The ideal position is that, if a senior manager is unable to work due to the coronavirus situation, it would be another senior manager or managers who would assume their responsibilities until they were able to return. Individuals in senior management roles should have all received specific approval from the FCA.
If a senior manager is absent and the firm decides it is not feasible to transfer all of their responsibilities to other FCA-approved senior managers, the firm would obviously need to consider who was the best candidate to step in on a temporary basis. It is the firm’s responsibility to ensure the individual in question has the skills, qualifications, experience and competence to deputise for the Senior Manager.
Once the relevant individual has been identified, the firm should apply to the FCA for a ‘modification of consent’, to allow another person to carry out senior manager tasks for up to 36 weeks. In order to be as flexible as possible, the regulator will allow firms to apply for a modification by consent as a precautionary measure, in advance of actually needing it.
The health emergency has also prompted the FCA to relax the notification requirements for firms who make internal transfers of responsibilities between existing Senior Managers.
All authorised firms are expected to have Statements of Responsibilities (SoR) that document the responsibilities of their senior managers. In normal circumstances, the firm should inform the FCA and submit updated SoRs where certain responsibilities are transferred from one manager to another. However, the regulator recognises that the current situation may require firms to change senior manager responsibilities at short notice, for example, a manager may be forced into self-isolation because they are displaying symptoms, or a family member falls ill.
With this in mind, the FCA has said that there is no need for an affected firm to submit an updated SoR to the FCA where the following criteria are satisfied:
- The changes have been made in response to the pandemic
- The changes are of a temporary nature and, in the longer term, the firm expects to revert back to its previous arrangement
However, while firms don’t have to send the updated SoR to the FCA, they are expected to document the change in responsibility that has occurred and to retain a copy of this document internally.
The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware of the facts, circumstances or legal position may change after publication of the article