1. The Building Societies Association (BSA) represents mutual lenders and deposit takers in the UK including all 47 UK building societies. Mutual lenders and deposit takers have total assets of over £375 billion and, together with their subsidiaries, hold residential mortgages of £245 billion, 20% of the total outstanding in the UK. They hold more than £250 billion of retail deposits, accounting for 22% of all such deposits in the UK. Mutual deposit takers account for 31% of cash ISA balances. They employ approximately 50,000 full and part-time staff and operate through approximately 2,000 branches.
2. We welcome the opportunity to comment on the FSA’s proposals for the PRA and FCA regimes for Approved Persons and the changes being put forward to existing regulatory rules and guidance that are necessary because of the introduction of the new regime.
Responses to the questions in Annex 3
Question 1 – Do you have any suggestions about how we could achieve the desired outcomes we were trying to achieve with the introduction of CF31 as an interim measure and without the need of systems developments?
3. Rather than attempt to introduce a temporary measure that might need to be unravelled at a later stage, we suggest that it would be best to wait until formal arrangements can be fully thought through and developed.
Question 2 – Do you as agree with this approach to ensuring that the PRA and FCA will continue to be able to assess a person’s suitability for all the key aspects of their role, without routinely requiring applications to be made to both regulators? If not, please explain your concerns and any suggestions for an alternative approach?
4. The proposals are sensible. The BSA strongly favours minimum duplication between the regulators and what is proposed is consistent with a sensible and pragmatic outcome.
Question 3 – Do you agree that we have identified where PRA and FCA controlled functions are most likely to overlap (see Table 2)?
5. Yes. See reply for Question 2.
Question 4 – Do you agree with our proposed approach for managing situations where someone changes their role and moves between the PRA and FCA controlled functions?
6. We welcome the streamlining of the FCA application process and understand why there will be duplication in some circumstances.
Question 5 – Do you agree with our proposed approach to the non executive director function?
7. While these things are not easy issues, the proposals represent a reasonable approach.
Question 6 – Do you agree with our approach toCF28 and how it operates where someone also performs an FCA governing function?
8. The proposals are sensible.
Question 7 – Do you agree with our proposals to extend the scope of the APER standards in the ways set out above? If not, please explain the reasons for your objection?
9. On the basis of the explanation in paragraph 4.13, his seems to be acceptable. However, as with other new additional powers, it would need to be exercised applicably and proportionately.
Question 8 – Do you agree that these proposals to amend the wording and application of the Statements of Principle in APER are appropriate, given the responsibilities of the PRA and FCA?
10. We can envisage circumstances where it could be more efficient for one regulator to bring a single enforcement case. However, as with certain other new powers, great care would need to be taken to ensure the appropriateness of such a course of action in a particular case.
11. This response has been prepared by the BSA in consultation with its members. If you have any comments or queries on this response, please contact Paul Broadhead firstname.lastname@example.org