Commentary Amendments of FSMA Section 27: Statement of policy
188.Section 27 inserts new sections 63ZD and 63ZE into FSMA. These sections require the regulators to prepare and issue statements of policy about the giving of approvals subject to conditions or time limits.
189.Section 63ZD requires both regulators to prepare and issue a policy about how they will use the power to give conditional or time-limited approval for performance of a designated senior management function in relation to a relevant authorised person, and how they will vary such approvals after they have been given (whether on application by a firm or on their own initiative). The regulators will be free to update their policy at any time, but they must always ensure the most recent policy has been published (so that it is accessible to those whom it may affect).
190.Section 63ZE sets out the procedure to be followed before issuing a statement of policy. Subsection (1) requires the regulators to consult each other before publishing a statement of policy (or revising a previously published statement). However, the FCA only has to consult the PRA where the policy relates to FCA-designated senior management functions in PRA-authorised persons. Subsection (1) also requires a regulator to publish a draft of a statement of policy. The draft policy must be accompanied by a notice inviting representations within a specified time (subsection (3)). The issuing regulator must have regard to any representations made ((subsection (4)) and, if it goes ahead and issues the statement, it must also publish a general account of the representations made to it and its response to them (subsection (5)). The process must be repeated if the regulator decides to proceed with a significantly different policy and it must also publish details of the differences (subsection (6)). If a regulator proposes to alter or replace an existing statement it must also follow the procedural requirements set out in this section.