Part 7: Part 7: Individuals and Controlled Functions
Article 41 - Approval of Persons performing Controlled Functions(1) An
Authorised Firmmust ensure that no individual acting for:(A) the Authorised Firm; or(B) a contractor of the Authorised Firmperforms a Controlled Functionfor that Authorised Firmunless the individual is approved by the Regulatory Authorityas an Approved Individual.(2) Controlled Functionmeans 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 customersand is specified as a Controlled Functionin Rulesissued by the Regulatory Authorityfrom time to time.(3) The Regulatory Authorityshall make Rulesdetailing:(A) the procedure for Applicationto the Authority for registration as an Approved Individualincluding requirements as to the form and content of the Application, any fees payable by an Authorised Firmin respect of its Approved Individualsand the procedures for modification or withdrawal of an Approved Individual'sregistration;(B) principles or other requirements to which Approved Individualsare required to adhere in the performance of Controlled Functions;(C) requirements for Approved Individualsto report to the Regulatory Authority; and(D) the circumstances in which registration of an Approved Individualmay be withdrawn at the instance of the Regulatory Authority.
Article 42 - Form and content of Application(1) An
Applicationfor approval under Article 41 shall be in such form and contain such information as may be prescribed by the Regulatory Authorityfrom time to time.(2) The Regulatory Authoritymay waive any of its requirements as to form and contents of an Applicationunder 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 Authoritymay require the Applicantto provide further information which it reasonably requires to be able to decide whether to approve an Applicationunder Article 41.(4) If at any time between the making of an Applicationunder this Article and the grant, modification or withdrawal of approval by the Authority, the Applicant, the Personin respect of whom the Applicationis made or the signatories to the relevant Applicationforms become(s) aware of a material change which is reasonably likely to be relevant to the Application, the Applicant, Personor signatories (as the case may be) shall inform the Regulatory Authoritywithout delay. Amended by QFC Reg 2010-2 (as from 9th December 2010)
Article 43 - Grant of approval or variation(1) The
Regulatory Authoritymay:(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 Authoritymay make Rulessetting out the criteria which the Personin respect of whom the Applicationfor 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 Applicationfor approval or variation of an approval under Article 41, the Regulatory Authoritymust notify the Authorised Firmaccordingly; or(B) rejects an Applicationfor approval or variation of an approval, the Regulatory Authorityshall promptly inform the Authorised Firmin 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 Authoritygrants an Applicationfor approval or variation of an approval it must also notify the Authorised Firmof the Controlled Functionswhich that person can carry out (and any conditions, restrictions or requirements applicable to the approval) in a format which the Regulatory Authorityconsiders appropriate and where an Applicationfor withdrawal is granted, the Regulatory Authoritymust notify the Authorised Firmaccordingly.
Article 44 - Status of Approval
An approval granted under Article 43 is not transferable.
Article 45 - Misconduct(1) The
Regulatory Authoritymay take action against any Personunder this Article if:(A) it appears to the Regulatory Authoritythat the Personis guilty of misconduct; and(B) the Regulatory Authorityis satisfied that it is appropriate to take action against him.(2) A Personis guilty of misconduct if:(A) he performs any function in contravention of a prohibition order issued by the Regulatory Authorityunder Article 62;(B) whilst a Approved Individual, he breaches any Rulesissued by the Regulatory Authoritydetailing matters set out under Article 41(3)(B) and (C); or(C) the Personhas been knowingly, recklessly or negligently involved in a Contraventionof any Law, Regulationsor Rulesby an Authorised Firmor in a Contraventionof any requirement imposed on an Authorised Firmby 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 Authoritymay 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 Individualis failing, or is likely to fail, to satisfy the criteria referred to in Article 43(2) (Suitability and Related Requirements);(B) an Approved Individualhas failed, during a period of at least 12 months, to carry on a Controlled Functionfor 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 Firmor the Financial System;(D) an Approved Individualor the Authorised Firmin respect of which the Approved Individualis 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 Individualor the Authorised Firmin respect of which the Approved Individualis approved is otherwise in breach of, or has otherwise been in breach of, the QFC Law, these Regulationsor any Rulesor other relevant legislation; or(F) a request to that effect has been received from an Overseas Regulatorin 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 Firmto:(A) impose or vary such conditions, restrictions and requirements on the approval of an Approved Individualas the Regulatory Authorityshall consider appropriate;(B) require an Approved Individualspecified in the condition, restriction or requirement to take or refrain from taking such action as the Regulatory Authorityconsiders appropriate; or(C) withdraw the Approved Individual'sapproval or vary its approval to remove one or more Controlled Functions.(3) Subject to Article 46(4), the Regulatory Authoritymay only exercise powers or take steps pursuant to Article 46(2) where it has provided the relevant Authorised Firmbeforehand with an appropriate opportunity to make representations to the Regulatory Authorityin 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 Authorityunder paragraph 46(3) above shall not apply:(A) where the Regulatory Authorityconcludes 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 Authorityshall provide the Authorised Firmwith 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 Authoritypursuant to Part 9 (Disciplinary and Enforcement Powers) or a decision by the Appeals Bodyor Tribunalrelating to or affecting the Authorised Firmin question.