The FSA consults on changes to the approved persons’ regime to improve corporate governance. On 28 January 2010, the FSA published a consultation paper entitled: “Effective corporate governance (Significant influence controlled functions and the Walker review)” (CP10/3). The FSA’s proposals reflect its ongoing work on governance in regulated firms and address a number of the recommendations made by the Walker review in November 2009. The amendments to the approved persons regime proposed in CP10/3 include: Introducing a new framework for significant influence controlled functions. This will entail the introduction of:

six new governing functions

1. 1. chairman,
   2. chairman of risk committee,
   3. chairman of audit committee,
   4. chairman of remuneration committee,
   5. senior independent director, and
   6. “Parent entity SIF”

three new systems and controls functions

1. 1. finance function,
   2. risk function, and
   3. Internal audit function.

The introduction of the “parent entity SIF” controlled function supersedes the amendments introduced by the FSA in July 2009 that apply to individuals exerting influence over firms from a parent or holding company. Clarifying the scope of the approved regime to capture more individuals exerting significant influence upon firms when based outside those firms.

Expanding on the October 2009 Dear CEO letter on the FSA’s thinking on the approval and supervision of individuals carrying out significant influence functions. Setting out the FSA’s expectations of non-executive directors at regulated firms. The FSA originally consulted on these proposals in CP08/25 but held back from a final decision until the outcome of the Walker Review.

Implementing the Walker Review recommendations on risk and stakeholder engagement. The FSA will address the Walker Review recommendations on remuneration in its ongoing work on that topic and has not addressed them in this consultation.

The FSA also invites comments on HM Treasury’s proposal for amendments to the approved persons’ regime in respect of individuals with responsibility for firms’

1. client assets and
2. Individuals performing the role of a Business Resolution Officer (BRO).

These proposals were made in HM Treasury’s consultation on resolution arrangements in December 2009.

The FSA will publish a consultation paper on client assets in the first quarter of 2010 which will consider the client assets controlled function. It will consider the BRO role further once HM Treasury has finalised its proposals.

Comments can be made on the proposals in CP10/3 until 28 April 2010.

The FSA intends to publish a policy statement in the third quarter of 2010.

Read more

http://www.fsa.gov.uk/pubs/cp/cp10_03.pdf