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FSA - CP 12/26 – Regulatory Reform: the PRA and FCA regimes for Approved Persons

Q2: Do you agree with this approach to ensuring that the PRA and FCA will continue to be able to assess a person’s suitability for all the key aspects of their role, without routinely requiring applications to be made to both regulators? If not please explain your concerns and any suggestions for an alternative approach.  

We agree with this approach and appreciate that applications will not routinely have to be made to 2 regulators.  This is especially important with regard to credit unions where individuals may be carrying out a number of roles within the firm.  The complexities of regulatory processes, such as approved persons, under the new regime will be a key element in ensuring proportionate treatment of the sector and we welcome any moves which will avoid duplication.  As small firms, credit unions can be disproportionately burdened if their needs are not taken into account at times of change such as these.  

Q3: Do you agree that we have identified where PRA and FCA controlled functions are most likely to overlap (see Table 2)?

We think that the most likely overlaps have been identified.  Credit unions at the moment do value the guidance produced by them for the FSA which helps credit unions to identify which controlled functions apply to roles within credit unions.  Revised specific guidance will be appreciated by credit unions as they navigate their way through the new system.  

Q4: Do you agree with our proposed approach for managing situations where someone changes their role and moves between the PRA and FCA controlled functions?

Yes

Q5: Do you agree with our proposed approach to the nonexecutive director function?

Yes.  This is an example though where clear guidance for credit unions will be useful, as the CF2 function refers in credit unions to members of the Supervisory Committee.  

Q6: Do you agree with our approach to CF28, and how it operates where someone also performs an FCA governing function?

Yes

To conclude, we are broadly satisfied with the measures that are proposed in respect of moving responsibility for approved persons from the FSA to its successor bodies.  We appreciate the steps that have been taken to minimise the burden of applying to two bodies instead of one.  However we are keen that consideration is given to proportionality, appropriateness and clarity in order that our members, who are likely to find difficulty in adapting to the new regime, are not unfairly burdened by the new regime and so that a level-playing field for mutuals can be secured.

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