Below are a number of regularly asked questions about terminology within a regulatory umbrella. This is by no means an exhaustive list so please get in touch with any questions!
What is a regulatory umbrella?
A regulator umbrella is the mechanism by which a Principal firm, who is directly authorised by the FCA, has the ability to grant regulatory permissions to other firms and individuals so that they too can conduct regulated activity. Through a combination of Appointed Representatives and Approved Persons, a regulatory solution can be structured accordingly. This structure is also known as a regulatory hosting platform or regulatory umbrella.
What is an Appointed Representative?
An Appointed Representative is a firm that conducts regulated business on behalf of a directly FCA-authorised firm, who is its ‘principal’. The Principal firm takes regulatory responsibility for the Appointed Representative, and must ensure it meets FCA requirements.
What is an Approved Person?
An Approved Person is an individual who has been approved by the FCA to conduct an activity for an authorised firm. These activities are called Controlled Functions.
What are Controlled Functions?
Controlled Functions are carried out by two kinds of approved persons – the CF30 or ‘customer’ function, and the Significant Influence Functions (SIFs) that are carried out by those closely involved in the running of the firm.
Examples of Controlled Functions include:
- being a director of a regulated firm
- overseeing the firm’s systems and controls
- being responssible for compliance with our rule
An individual can hold more than one Controlled Function, eg, a director can perform the director function and the compliance oversight function, but you must show in your application that the individual can manage multiple roles.