Lack of controlled IT function - glitch delays FSA implementation of Approved Person rules

28 March 2011

The FSA announced last week it was delaying the implementation of its new rules on Controlled Functions because it had been unable to complete the necessary changes to its Online Notifications and Applications (ONA) system to process the new Controlled Function applications and notifications.

The FSA announced the introduction of a new framework for Controlled Functions in a policy statement last September.  The FSA is creating a new CF00 for directors and employees of parent companies who exercise a significant influence on UK authorised firms, requiring separate approval for chairmen, senior independent directors, the Chairman of Risk Committee, Chairman of Audit Committee, Chairman of Remuneration Committee and Heads of Finance, Risk and Internal Audit.  The new rule had an unusually long lead time, having been formally made by the FSA Board on 23 September 2010 but only scheduled to come into force on 1 May 2011.

The FSA has now announced (albeit only on page 17 of Handbook Notice 108) that it is deferring the implementation of the new Rules because it has been unable to make the necessary changes to its ONA system to accept the new applications and notifications. Two months' notice will be given of the new implementation date.

Anyone who has been through a major IT project will sympathise with the FSA's difficulties in overrunning. But we wonder how sympathetic the FSA would be to a firm which was unable to comply with the Rules because of IT difficulties!

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