The Controlled Functions of the Financial Conduct Authority (FCA) are simplifying code names given to various functions within the financial services and relating to the carrying on of regulated activities by a firm. These are specified, under section 59 of the Financial Services and Markets Act which still stands as the reference after the FSA split into the FCA and the PRA. The FCA is solely responsible for all applications for approval for FCA Designated Controlled Functions for all FCA solo regulated firms.
Controlled functions applicable for UK and overseas firms
Significant influence functions
CF 1 Director function
If a firm is a body corporate (other than a limited liability partnership), the Director Function is the function of acting in the capacity of a director (other than non-executive director) of that firm.
If a firm is a body corporate (other than a limited liability partnership), the director function is also the function of acting in the capacity of a person: who is a director, partner, officer, member (if the parent undertaking or holding company is a limited liability partnership), senior manager, or employee of a parent undertaking or holding company of the firm; and whose decisions or actions are regularly taken into account by the governing body of the firm. (1) does not apply if that parent undertaking or holding company has a Part 4A permission or is regulated by an EEA regulator. (1) does not apply to the function falling into SUP 10A.6.13 R (non-executive director of the parent undertaking or holding company).
CF 2 Non-executive director function
If a firm is a body corporate, the non-executive director function is the function of acting in the capacity of a non-executive director of that firm.
If a firm is a body corporate, the non-executive director function is also the function of acting in the capacity of a person: who is a non-executive director of a parent undertaking or holding company; and whose decisions or actions are regularly taken into account by the governing body of the firm. However, (1) does not apply if that parent undertaking or holding company has a Part 4A permission or is regulated by an EEA regulator.
CF 3 Chief executive function
The chief executive function is the function of acting in the capacity of a chief executive of a firm.
This function is having the responsibility, alone or jointly with one or more others, under the immediate authority of the governing body: for the conduct of the whole of the business (or relevant activities); or in the case of a branch in the United Kingdom of an overseas firm, for the conduct of all of the activities subject to the UK regulatory system.
For a branch in the United Kingdom of an overseas firm, the FCA would not normally expect the overseas chief executive of the firm as a whole to be FCA-approved for this function where there is a senior manager under him with specific responsibility for those activities of the branch which are subject to the UK regulatory system. In some circumstances, the person within the firm responsible for UK operations may, if the function is likely to enable him to exercise significant influence over the branch, also perform the chief executive function (see SUP 10A.7.4 G).
A person performing the chief executive function may be a member of the governing body but need not be. If the chairman of the governing body is also the chief executive, he will be discharging this function. If the responsibility is divided between more than one person but not shared, there is no person exercising the chief executive function. But if that responsibility is discharged jointly by more than one person, each of those persons will be performing the chief executive function.
Note that a body corporate may be a chief executive. If so, it will need to be approved (if the firm in question is an FCA-authorised person) to perform the chief executive function.
The chief executive function does not apply in relation to a PRA-authorised person. PRA approval is required instead.