6
Role-scale limited approvals
22.
Where a firm is expanding, transforming its business model or its risk profile and there are identifiable upcoming milestones, the PRA may wish to link the duration of one or more Senior Managers’ approvals to these milestones.
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23.
An example might be an unlisted bank or insurer which currently operates only in the United Kingdom but is planning an initial public offering and a number of overseas acquisitions which are projected to treble the size of its balance sheet and give it a global footprint over the next three years.
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24.
The incumbent Chief Finance function (SMF2) holder has never managed the financial resources of an institution as large or complex as this firm intends to become. In this situation, it may be appropriate to either:
- limit their approval to three years (the projected time for completing the expansion); or
- link it to certain expected milestones (ie the point at which the firm’s balance sheet exceeds a predetermined size) at which point their fitness and propriety would be reassessed in light of the new circumstances.
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25.
The imposition of a role-scale-linked time limit on a Senior Manager’s approval would apply without prejudice to other obligations which may arise on a firm in those circumstances, such as the duty to provide the PRA and FCA with a revised Statement of Responsibilities if the relevant Senior Manager’s responsibilities undergo a ‘significant change’ (section 62A of FSMA) and to meet any information or verification requirements imposed by the PRA under that section and under Applications and Notifications 5.3 and 6.3, Insurance – Senior Managers Regime - Applications and Notifications 5.3 and 6.3, Large Non-Solvency II Firms – Senior Managers Regime - Applications and Notifications 5.3 and 6.3, or Non-Solvency II Firms - Senior Managers Regime – Applications and Notifications 5.3 and 6.3.
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