SFC licensing and compliance hints – Nov 2014

Not just box-ticking:  Responsible officer applicants must check a box on the application form to declare that the board of directors has already passed a resolution appointing him/her as a responsible officer to supervise the business of regulated activities. This means responsible officer application forms cannot be signed until after the board resolution has  been passed.  

When a responsible officer/director  signs an SFC application/notification form on behalf of their firm, they need to formally declare that “all the information provided in the form is complete … [and that they understand] that providing false or misleading information is an offence … and that the SFC may take disciplinary action against a person who has made a false or misleading representation”. Care therefore needs to be taken by responsible officers/directors in signing these forms to ensure that they have enough information to confirm that all the details in the form are accurate:  if there is any uncertainty, they should ask questions to confirm the situation before proceeding to sign.

Bonus time, liquid capital crunch time: Licensed companies that do not accrue bonuses on an ongoing basis and only do so immediately prior to payment, e.g. at year end, need to anticipate and take appropriate action on the financial resources rules (FRR) implications of this approach.  If a company does not accrue bonuses on an ongoing basis, the effect of a sudden and big provision prior to year end can have a significant impact on the company’s liquid capital position.  To avoid FRR breaches and SFC notifications, it is important therefore to work with the finance team to do a FRR impact assessment in advance of making any bonus provisions.

Final call CPT 2014: This is our last reminder for 2014. All licensed individuals should have already fulfilled or be close to fulfilling their 2014 CPT requirement. If your company has licensed individuals who still need CPT hours, they need to act quickly.  Note that additional CPT hours in 2015 cannot compensate for a 2014 deficit.