UK Conduct Regulator Announces Expectations for Approved Persons Regime for Benchmark Administrators During COVID-19
06/30/2020The U.K. Financial Conduct Authority has announced its expectations for benchmark administrators and firms using Appointed Representatives that are subject to the Approved Persons Regime during COVID-19. The APR has been superseded by the Senior Managers and Certification Regime for most solo- and dual-regulated firms. However, as benchmark administrators were a new category of authorized firm, they were granted a one-year extension from the roll-out of the SM&CR and so remain subject to the APR until December 7, 2020, when the SM&CR for benchmark administrators that do not undertake other regulated activities will be implemented.
The FCA acknowledges that firms may require adjustments to the APR in light of complications arising from COVID-19, and has therefore set out the following expectations for benchmark administrators and Appointed Representatives:
- 12-week rule: the FCA intends to issue a modification by consent to the "12-week rule", which normally allows an individual to cover for an Approved Person without FCA approval for up to 12 weeks; the modification means benchmark administrators and Appointed Representatives will be able to appoint such individuals for up to 36 weeks;
- Furloughed staff: where benchmark administrators or Appointed Representatives furlough Approved Persons, those Approved Persons will be able to retain their approval without the need for re-approval upon their return, but the benchmark administrator or Appointed Representative's principal will remain responsible for ensuring those people are fit and proper;
- Notification and documentation: firms are not required to use Form D to notify the FCA of their use of the temporary amendments to the 12-week rule or furloughed staff (although benchmark administrators and Appointed Representatives' principals should notify the FCA if they intend to use the extension to the 12-week rule), but firms should internally document these arrangements.
View the FCA's statement on the APR for benchmark administrators.
View details of the FCA's extension of the SM&CR to benchmark administrators.
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