Senior Managers and Senior Insurance Managers Regimes: approvals

The Senior Managers Regime (SMR) and Senior Insurance Managers Regime (SIMR) came into force on 7 March 2016. They were introduced to support a change in culture at firms.
The Senior Managers/Insurance Managers Regimes replace the Approved Persons regime as part of implementing the recommendations in the final report of the Parliamentary Commission on Banking Standards  to support a change in culture at all levels at banks, building societies, credit unions and PRA-designated investment firms (collectively referred to as relevant authorised persons or RAPs), and insurers.

Who do the regimes apply to?

The regimes apply to the most senior executive management and directors who are subject to regulatory approval.

The ‘Certification Regime’ for deposit-taking firms (excluding credit unions) requires relevant firms to assess the fitness and propriety of certain employees who could pose a risk of significant harm to the firm or any of its customers.

Firms must allocate prescribed responsibilities across their senior managers, setting out their duties. This forms part of the overall firm management and governance map.

Conduct rules now apply to relevant authorised persons and Solvency II firms with notification requirements in certain circumstances.

Under section 59 of the Financial Services and Markets Act 2000 (FSMA), authorised firms are required to ensure that individuals seeking to perform one or more of the PRA–designated Senior Management Functions seek our approval before taking up their position. Not getting approval before taking up the role may lead to enforcement action against the firm and/or the individual.

For dual-regulated firms, the PRA leads the assessment of applications for the approval of the PRA-designated Senior Management Functions. The authorisation of an individual to carry on PRA-regulated activities will not be granted unless both the PRA and the Financial Conduct Authority (FCA) are satisfied that the applicant meets the standards laid out in FSMA. The FCA is required to give its consent to the PRA before any final decision can be made on an application.

Find out more about the development of the Senior Managers and Senior Insurance Managers regimes.

Senior Managers Regime: how to apply

All firms must submit all applications via the Connect application system. In exceptional circumstances an exemption from the FCA Customer Contact Centre may be granted.

The exceptions to this are the following forms (which cannot be submitted via the Connect application system):

  • Form B (notice to withdraw)
  • Form M (notification of non SMF/SIMF appointment)
  • Form L (notification of disciplinary action in relation to an employee performing a certification function).

Please see application forms available to download below.

These three forms and all applications and notifications from those who have obtained the dispensation can be submitted by post or email to: Authorisations Division, Prudential Regulation Authority, 20 Moorgate, London EC2R 6DA or PRA-ApprovedPersons@bankofengland.co.uk

We do not charge a fee to process these applications for approval.

Applications should be made by the firm ('the applicant') and countersigned by the individual ('the candidate'). In submitting the application, both the applicant and the candidate verify that the information contained within the application is complete and accurate.

Before submitting an application, firms may wish to engage with us, particularly where the application may be of a sensitive nature and/or for a key role. Firms should contact their usual supervisory contact to discuss such cases. 

Firms must undertake sufficient due diligence to satisfy themselves on the appropriateness of the applicant before submitting the application and provide evidence to support this, including:

  • the due diligence undertaken in appointing the candidate
  • confirmation they have obtained and scrutinized regulatory references and completed a Disclosure and Barring Service (DBS) check
  • details of the rationale the firm has used to conclude that the candidate is fit and proper to perform the role for which approval is sought.

Should approval be required by a specific date, the firm should enter the role effective date in the ‘Arrangements and controlled functions’ section of the application. We will make every reasonable effort to meet with this timeline. However, this may not always be possible.

4 July 2018: Updated versions of the forms below have been published as part of PS15/18 'Strengthening individual accountability in insurance: Extension of the Senior Managers and Certification Regime to insurers', and are available in Appendix 4. These forms will go live on 10 December 2018. Firms should continue to use the forms below until that point.

Application forms: Senior Managers Regime

Senior Managers Regime application forms are set out below:

Forms for relevant authorised persons (excluding third-country branches)

Form Description Guidance notes
A - Long Application to perform controlled functions (long) PRA-regulated firms may find it useful to refer to the Financial Conduct Authority’s guidance notes
A - Short Application to perform controlled functions (short) 
B Notice to withdraw an application to perform controlled functions  
C Notice of ceasing to perform controlled functions  
D Changes to personal information/application details and conduct breaches/disciplinary action related to conduct  
E Internal transfer of an approved person PRA-regulated firms may find it useful to refer to the Financial Conduct Authority’s guidance notes
I Application for the variation of a conditional approval for the performance of a Senior Management Function  
J Notification of significant changes in responsibilities of a Senior Management Function manager  
L Notifications of disciplinary action in relation to an employee performing a certification function  
M Notification of non-executive director or key function holder   
SOR Statement of responsibilities  
  ESMA Template  Relevant to designated investment firms only
  MiFID Article 4 SMR Information Form  Relevant to designated investment firms only

 

Forms for third-country relevant authorised persons

Form Description Guidance notes
A - Long Application to perform controlled functions (long)  PRA-regulated firms may find it useful to refer to the Financial Conduct Authority’s guidance notes
A - Short Application to perform controlled functions (short) 
B Notice to withdraw an application to perform controlled functions
C Notice of ceasing to perform controlled functions
D Changes to personal information/application details and conduct breaches/disciplinary action related to conduct
E Internal transfer of an approved person PRA-regulated firms may find it useful to refer to the Financial Conduct Authority’s guidance notes
I Application for the variation of a conditional approval for the performance of a Senior Management Function
J Notification of significant changes in responsibilities of a Senior Management Function manager
L Notifications of disciplinary action in relation to an employee performing a certification function
M Notification of non-executive director or key function holder 
SOR Statement of responsibilities
 

Applications forms: Senior Insurance Managers Regime

Senior Insurance Managers Regime application forms are set out below:

Forms for Solvency II firms

Form Description Guidance notes
A - Long Application to perform controlled functions (long) PRA-regulated firms may find it useful to refer to the Financial Conduct Authority’s guidance notes
A - Short Application to perform controlled functions (short)
B Notice to withdraw an application to perform controlled functions  
C Notice of ceasing to perform controlled functions  
D Notification of changes in personal information or application details  
E Internal transfer of an approved person  PRA-regulated firms may find it useful to refer to the Financial Conduct Authority’s guidance notes
M Notification of non-Senior Insurance Management Function appointment  
SOR Scope of responsibilities  

 

Forms for large non-Solvency II firms

Form Description Guidance notes
A - Long Application to perform controlled functions (long) PRA-regulated firms may find it useful to refer to the Financial Conduct Authority’s guidance notes
A - Short Application to perform controlled functions (short)
B Notice to withdraw an application to perform controlled functions
C Notice of ceasing to perform controlled functions
D Notification of changes in personal information or application details
E Internal transfer of an approved person PRA-regulated firms may find it useful to refer to the Financial Conduct Authority’s guidance notes
M Notification of non-Senior Insurance Management Function appointment
SOR Scope of responsibilities

 

Forms for small non-Solvency II firms

Form Description Guidance notes
A - Long Application to perform controlled functions (long) PRA-regulated firms may find it useful to refer to the Financial Conduct Authority’s guidance notes
A - Short Application to perform controlled functions (short)
B Notice to withdraw an application to perform controlled functions
C Notice of ceasing to perform controlled functions
D Notification of changes in personal information or application details
E Internal transfer of an approved person PRA-regulated firms may find it useful to refer to the Financial Conduct Authority’s guidance notes
SOR Scope of responsibilities

Time limited approvals

For more information on time limited approvals, please see the PRA Statement of Policy 'Conditions, time limits and variations of approval'.

The test and process

A time limited approval can only be imposed by the PRA (a firm cannot apply for a time-limited approval) if it would advance its objectives, which can be due to multiple reasons, such as a desire for cover and continuity of a specific Senior Management Function (SMF) following a departure. 

Imposing a time limit on an SMF approval triggers the statutory notice procedure under the Financial Services and Markets Act 2000 (FSMA) (see s.61(2B) of FSMA), which includes publication of statutory notices (see s.391(4) and s.391(6A) of FSMA).

Publication

Pursuant to s.391(4) of FSMA, the PRA must publish such information about the matter to which a decision notice or final notice relates as it considers appropriate. However, pursuant to s.391(6A) of FSMA, the PRA may not publish information if, in its opinion, publication would be unfair to the firm and/or candidate or prejudicial to the safety and soundness of PRA-authorised persons. For further information please refer to the PRA Statement of Policy ‘The Prudential Regulation Authority's approach to enforcement: statutory statements of policy and procedure'.

If the PRA decides to publish a decision or final notice relating to a time-limited approval it will do so here and the notice will be removed upon the expiry or the removal of the time limit.

The publication of a decision or final notice relating to a time limited approval does not, of itself, imply concerns or an adverse finding as to the individual’s fitness and propriety and therefore publication of a notice should not be treated as indicating a concern by the PRA as to a person’s fitness and propriety.

Disclosure of information

Firms are required to disclose all matters relating to a candidate’s fitness and propriety. If a firm is not sure whether something may have an impact on a candidate’s fitness and propriety, the information should be disclosed. We take non-disclosure very seriously and may consider it to be evidence of current dishonesty. If in doubt, disclose.

In the event that a candidate discloses adverse information to the firm (or the applicant knows of adverse information by some other means) the applicant has a duty to disclose that information to us.

In the event that adverse information comes to light after the application form has been submitted, or after the individual has been approved, the firm must still inform us at the earliest opportunity.

How we assess and determine Senior Managers/Insurance Managers Regime applications

Under section 61 of the Financial Services and Markets Act 2000 (FSMA), we may approve an individual only where it is satisfied that a candidate is fit and proper to perform the Senior Management Function(s)/Senior Insurance Management Function(s) applied for. When considering a candidate’s fitness and propriety, we take into account and must be satisfied of the candidate’s:

  • honesty, integrity and reputation, i.e that they will be open and honest in their dealings and able to comply with the requirements imposed on them
  • competence and capability, i.e. that they have the necessary skills to carry on the function they are to perform
  • financial soundness.

The length of time taken to determine an application will vary, particularly where there is evidence of non-disclosure and/or adverse information, or where an interview is required to assess the candidate’s competence and capability. In these cases, we may require the applicant to submit further information we consider necessary to determine the application. As a result, the statutory clock will be stopped until we have received that information and/or the interview has taken place. Nevertheless, we have a statutory obligation to undertake our review of the application within 90 days of receipt.

We will take a proportionate approach in our assessment of applications, taking into account all matters relating to an individual’s fitness and propriety. Where appropriate, we may also interview candidates as part of our assessment. This is particularly the case for the most senior roles at the largest firms although, at our discretion, we may also choose to interview other candidates.

Where both the PRA and the FCA wish to interview a candidate we will, so far as possible, seek to co-ordinate a single joint interview with the applicant. Both organisations do, however, reserve the right to conduct solo interviews, where appropriate.

If a decision is made to approve the application, we will inform the firm by issuing an approval notice. If the PRA and/or the FCA are minded to refuse the application, the PRA will inform the applicant by issuing a warning notice, which will include details of the appeals process.

During the course of their assessment, case officers may request further information from firms via email to help reach a decision. If the firm does not respond to this request within four weeks, they are considered a ‘non-responder’. We will make further reasonable effort to obtain the required information, but we may reject a non-responder’s application at our discretion if the information is not forthcoming.

Compliance with the Senior Managers/Insurance Managers Regime

All Senior Management/Senior Insurance Management Functions must comply with and meet the fit and proper test for approved senior managers, as set out in section 61 of FSMA, on an ongoing basis. The FIT section of the PRA Rulebook provides further guidance on what we will take into account when assessing individuals against this. Approved persons must inform their firm and the PRA of any matter that may impact their ongoing fitness and propriety.

We have various powers against an individual approved to perform a Senior Management Function where an individual acts in a manner inconsistent with our conduct rules or standards expected of an approved person, or if an individual knowingly consorts in a breach of their firm expectations. This action may include a fine, a suspension of the approval, imposing restrictions or issuing of a public statement relating to the misconduct.

Where we believe that a person is no longer fit and proper to perform the function, approval may be withdrawn or the individual may be prohibited from holding approval status in the future. 

Privacy notice

How we use your information

Information we collect

Through our authorisations forms, the Bank of England (the ‘Bank’) collects personal data about you. This personal data could include (depending on the application or notification form submitted) personal identification details, contact information, addresses, employment history and information relating to fitness and propriety such as criminal, civil and regulatory matters. Each form clearly states what personal data is being gathered. The Bank may make further enquiries and seek similar information from third parties and other data sources as we think appropriate to identify and verify information that we consider relevant to the application or notification, this could include criminal, credit and other background checks.                                                                                               

Why we need your personal data

The Bank collects personal data to process a range of authorisation applications and notifications, which include:

  • New firm authorisations
  • Senior Management and Senior Insurance Management Functions
  • Waivers and Modifications of rules
  • Variations and cancelling of Permissions
  • Change in Control
  • Standing Data
  • Passporting

This information is used to assist the Bank of England in discharging its functions, in particular the statutory functions of the Prudential Regulation Authority under the Financial Services and Markets Act 2000 and other relevant legislation.

What we do with your personal data

In complying with applicable laws and for law enforcement purposes, we may disclose information to any government entity, regulatory authority or to any other person the Bank reasonably considers necessary. This may mean that personal data is transferred outside the European Economic Area. Otherwise, we will not disclose your information without your permission. Your personal data will be retained in accordance with the Bank’s records management schedule. 

Your rights

You have a number of rights under data protection laws.  For example, you have the right to ask us for a copy of the personal data the Bank holds about you. You can also ask us to change how we process or deal with your personal data, and you may have the right in some circumstances to have your personal data amended or deleted. To contact us about those rights, including making a request for the personal data we hold about you, or to find out more about privacy and data protection at the Bank, please see the Privacy and the Bank of England page.

This page was last updated 08 October 2018
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