• Part 7: Part 7: Individuals and Controlled Functions

    • Article 41 - Approval of Persons performing Controlled Functions

      (1) An Authorised Firm must ensure that no individual acting for:
      (A) the Authorised Firm; or
      (B) a contractor of the Authorised Firm
      performs a Controlled Function for that Authorised Firm unless the individual is approved by the Regulatory Authority as an Approved Individual.
      (2) Controlled Function means a function which involves:
      (A) the exercise of significant influence over the conduct of the firm's affairs in relation to Regulated Activities;
      (B) dealing directly with clients or customers in relation to Regulated Activities; or
      (C) dealing with the property of clients or customers
      and is specified as a Controlled Function in Rules issued by the Regulatory Authority from time to time.
      (3) The Regulatory Authority shall make Rules detailing:
      (A) the procedure for Application to the Authority for registration as an Approved Individual including requirements as to the form and content of the Application, any fees payable by an Authorised Firm in respect of its Approved Individuals and the procedures for modification or withdrawal of an Approved Individual's registration;
      (B) principles or other requirements to which Approved Individuals are required to adhere in the performance of Controlled Functions;
      (C) requirements for Approved Individuals to report to the Regulatory Authority; and
      (D) the circumstances in which registration of an Approved Individual may be withdrawn at the instance of the Regulatory Authority.

    • Article 42 - Form and content of Application

      (1) An Application for approval under Article 41 shall be in such form and contain such information as may be prescribed by the Regulatory Authority from time to time.
      (2) The Regulatory Authority may waive any of its requirements as to form and contents of an Application under Article 41 provided that it is satisfied that the required information is provided by other means, or the information is not necessary in the circumstances.
      (3) The Regulatory Authority may require the Applicant to provide further information which it reasonably requires to be able to decide whether to approve an Application under Article 41.
      (4) If at any time between the making of an Application under this Article and the grant, modification or withdrawal of approval by the Authority, the Applicant, the Person in respect of whom the Application is made or the signatories to the relevant Application forms become(s) aware of a material change which is reasonably likely to be relevant to the Application, the Applicant, Person or signatories (as the case may be) shall inform the Regulatory Authority without delay.
      Amended by QFC Reg 2010-2 (as from 9th December 2010)

    • Article 43 - Grant of approval or variation

      (1) The Regulatory Authority may:
      (A) grant or vary an approval under Article 41 either without conditions restrictions or requirements or with such conditions restrictions or requirements as it considers appropriate; or
      (B) reject the Application.
      (2) The Regulatory Authority may make Rules setting out the criteria which the Person in respect of whom the Application for approval under Article 41 is made must satisfy. Such criteria shall include requirements relating to:
      (A) suitability requirements to be met by an individual seeking approval as an Approved Individual, including the criteria used to assess fitness and propriety; and
      (B) requirements as to qualifications and competence of Approved Individuals.
      (3) Where the Regulatory Authority:
      (A) grants an Application for approval or variation of an approval under Article 41, the Regulatory Authority must notify the Authorised Firm accordingly; or
      (B) rejects an Application for approval or variation of an approval, the Regulatory Authority shall promptly inform the Authorised Firm in writing of such refusal and, where requested by the Authorised Firm, the reasons for such refusal and of the applicant's right to appeal that decision to the Appeals Body.
      (4) Where the Regulatory Authority grants an Application for approval or variation of an approval it must also notify the Authorised Firm of the Controlled Functions which that person can carry out (and any conditions, restrictions or requirements applicable to the approval) in a format which the Regulatory Authority considers appropriate and where an Application for withdrawal is granted, the Regulatory Authority must notify the Authorised Firm accordingly.

    • Article 44 - Status of Approval

      An approval granted under Article 43 is not transferable.

    • Article 45 - Misconduct

      (1) The Regulatory Authority may take action against any Person under this Article if:
      (A) it appears to the Regulatory Authority that the Person is guilty of misconduct; and
      (B) the Regulatory Authority is satisfied that it is appropriate to take action against him.
      (2) A Person is guilty of misconduct if:
      (A) he performs any function in contravention of a prohibition order issued by the Regulatory Authority under Article 62;
      (B) whilst a Approved Individual, he breaches any Rules issued by the Regulatory Authority detailing matters set out under Article 41(3)(B) and (C); or
      (C) the Person has been knowingly, recklessly or negligently involved in a Contravention of any Law, Regulations or Rules by an Authorised Firm or in a Contravention of any requirement imposed on an Authorised Firm by the Regulatory Authority.
      Amended by QFC Reg 2010-2 (as from 9th December 2010)

    • Article 46 - Own initiative action by the Regulatory Authority

      (1) The Regulatory Authority may exercise any of the powers or take any of the steps set out in Article 46(2) at any time where it is satisfied that:
      (A) an Approved Individual is failing, or is likely to fail, to satisfy the criteria referred to in Article 43(2) (Suitability and Related Requirements);
      (B) an Approved Individual has failed, during a period of at least 12 months, to carry on a Controlled Function for which he has been approved;
      (C) it is desirable to take such steps to exercise such power in order to protect the interests of clients or customers of an Authorised Firm or the Financial System;
      (D) an Approved Individual or the Authorised Firm in respect of which the Approved Individual is approved is in breach of, or has been in breach of, one or more conditions, restrictions or requirements applicable to his approval or its Authorisation;
      (E) an Approved Individual or the Authorised Firm in respect of which the Approved Individual is approved is otherwise in breach of, or has otherwise been in breach of, the QFC Law, these Regulations or any Rules or other relevant legislation; or
      (G) a request to that effect has been received from an Overseas Regulator in accordance with Article 20 (International Relations and Co-operation).
      (2) The powers and steps referred to in Article 46(1) are by written notice to the Regulated Firm to:
      (A) impose or vary such conditions, restrictions and requirements on the approval of an Approved Individual as the Regulatory Authority shall consider appropriate;
      (B) require an Approved Individual specified in the condition, restriction or requirement to take or refrain from taking such action as the Regulatory Authority considers appropriate; or
      (C) withdraw the Approved Individual's approval or vary its approval to remove one or more Controlled Functions.
      (3) Subject to Article 46(4), the Regulatory Authority may only exercise powers or take steps pursuant to Article 46(2) where it has provided the relevant Authorised Firm beforehand with an appropriate opportunity to make representations to the Regulatory Authority in relation to the proposed steps and has given due consideration to those representations in determining the steps to be taken.
      (4) The requirement on the Regulatory Authority under paragraph 46(3) above shall not apply:
      (A) where the Regulatory Authority concludes that any delay likely to arise as a result of the requirement to allow representations contained in Article 46(3) is prejudicial to the interests of the clients or customers of the Authorised Firm, or the Financial System (provided in such case that the Regulatory Authority shall provide the Authorised Firm with an opportunity to make such representations promptly after such powers have been exercised or steps taken and shall give due consideration to such representations); or
      (B) the powers to be exercised or steps to be taken follow a determination by the Regulatory Authority pursuant to Part 9 (Disciplinary and Enforcement Powers) or a decision by the Appeals Body or Tribunal relating to or affecting the Authorised Firm in question.

    • Article 47 - Right to refer matters to the Appeals Body

      Any decision by the Regulatory Authority pursuant to Articles 43, 45 or 46 may be referred to the Appeals Body by the Person or Authorised Firm affected.