How to Write a Certificate for Certification Functions

Posted on by Know Your Compliance

Certification Functions are those that cover specific functions that are not not specified as Senior Management Functions, but that can still have a significant impact on customers, the firm and/or market integrity. The FCA does not approve those individuals performing certification functions in the same way that they do Senior Managers. Instead, the firm itself is responsible for assessing and verifying that the employee is fit and proper for the relevant function.

To do this, it is important that each firm develops a fitness and propriety assessment program and record to enable them to check the FCA’s criteria and requirements against each individual. Using this assessment program, the firm is then able to assess and verify their Senior Managers prior to submitting them to the FCA for approval. The firm can also use the same assessment process to validate and assess the employees who will hold certification functions; enabling the firm to then issue the mandatory certificate.

Certification Functions

  • CASS oversight
  • Proprietary trader
  • Significant management
  • Functions requiring qualifications
  • Managers of certification employees
  • Material risk takers
  • Client-dealing
  • Algorithmic trading

FIT Assessment Considerations

  • Qualifications obtained
  • Relevant training undergone (or undergoing)
  • Skill and level of competence
  • Personal characteristics
  • Experience and function knowledge

Anyone performing a certification function should be assessed as fit and proper and then be issued with a certificate.

There is no set certificate template provided by the FCA for those employees performing a certification function. However, section 63F of the Act (and section SYSC 27.2.9 G of the FCA Handbook) states that a certificate issued by a firm to a person must: –

  1. state that the firm is satisfied that the person is fit and proper to perform the function to which the certificate relates; and
  2. set out the aspects of the affairs of the firm in which the person will be involved in performing the function

Ensure that your certificate template is drafted onto headed paper and gives a brief summary of what the certificate is for and the assessment criteria used to approve the individual to perform a certification function. You should insert the employees’ name into the CF certificate and also state which certification function(s) they have been approved to perform. To meet the criteria of the requirements set out above by the FCA, you should also include alongside the function, the exact duties or activites being performed and any other information relevant to the role.

Ensure that you include the date of issue as certificates last for only 12 months, at which time the assessment and certification process needs to be carried out again. You should also include the name of the person issuing the certificate, along with their signature.

If you would like a simple to customise template for the certification function certificate, we include one in our SM&CR Toolkit. Our market leading toolkit have helped over 3000 organisations to meet the regulatory requirements and comply with laws and regulations such as the FCA, GDPR and AML.

Our extensive SMCR Document Pack is only £145 (exc vat) and contains: –

  • Instruction Sheet
  • SM&CR Document
  • Certification Function Certificate Template
  • Statement of Responsibilities Template
  • Management Responsibilities Map Template
  • FIT Assesment Process & Record
  • SMF Handover Policy
  • SM Register Template
  • SMF Due Diligence Checklist
  • SMF Due Diligence Questionnaire
  • SMF Induction Checklist
  • Conduct Rules Policy
  • Conduct Rules Training Guidance