SYSC 26.9 Who functions should be allocated to

The FCA expects that anyone who has overall or local responsibility for a matter:

1. (1)

   will be sufficiently senior and credible; and

2. (2)

   will have sufficient resources and authority;

to be able to exercise their management and oversight responsibilities effectively.

1. (1)

   The FCA would not consider it unusual if a person who has overall or local responsibility for a particular function was not a member of the firm’s governing body or equivalent.

2. (2)

   For example, in some firms, the head of compliance may report directly to the firm’s governing body even though the head of compliance is not a member of the governing body.

Other parts of this chapter dealing with seniority are:

1. (1)

   SYSC 26.7.3G (seniority of someone with overall responsibility for a function under the management of a firm’s governing body);

2. (2)

   SYSC 26.8.3G and SYSC 26.8.4G (seniority of someone from elsewhere in the firm having local responsibility in a branch); and

3. (3)

   SYSC 26.8.5G (seniority of someone within a UK SMCR firm with overall responsibility for a function not under the management of a firm’s governing body).

1. (1)

   It will be common for a small non-complex firm to divide overall or local responsibility for its activities under the management of its governing body between members of its governing body and not to assign overall or local responsibility for any activity to someone who is not a member.

2. (2)

   However, when deciding how to divide up overall or local responsibility for its activities, a firm should avoid assigning such a wide range of responsibilities to a particular person that the person is not able to carry out those responsibilities effectively.

3. (3)

   Therefore, in a large or complex firm, the FCA expects overall or local responsibility for some functions to be assigned to persons in the layer of management below the governing body. Anyone in that layer having overall or local responsibility for an activity will be performing a designated senior management function.

SYSC 26.9.4G(2) also applies to allocating responsibility for functions that are not under the management of the firm’s or branch’s governing body.

The following provisions of SYSC 24.3 (Who prescribed responsibilities should be allocated to) also apply to allocations under this chapter so far as those provisions deal with sharing responsibilities:

1. (1)

   SYSC 24.3.8G (responsibilities should generally not be shared);

2. (2)

   SYSC 24.3.9G (when responsibilities may be shared); and

3. (3)

   SYSC 24.3.11G (statements of responsibilities);

1. (1)

   The material in SYSC 24.3 (Who prescribed responsibilities should be allocated to) about splitting of responsibilities is not directly relevant to this chapter. This is because SYSC 24 deals with functions that have been defined in the FCA Handbook whereas this chapter does not define the areas into which a firm’s activities should be divided when allocating responsibilities to its SMF managers.

2. (2)

   However SYSC 24.3.10G (responsibilities should be grouped together appropriately) is also relevant for deciding whether responsibility for a particular set of matters should be allocated to one SMF manager or allocated between several.