Section 37

A regulated person must take reasonable care to ensure that no person performs a controlled function under a particular arrangement entered into

{a)

by a regulated person; or

{b)

by a representative of a regulated person, m relation to the carrying on of any regulated activity, unless the Authority approves the performance by that person of the controlled function to which the arrangement relates.

In this section

"arrangement"

{a)

means any kind of arrangement for the performance of a function of a regulated person which is entered into by the regulated person or any contractor of his with another person; and

{b)

includes, in particular, that other person's appointment to an office

(including that of a senior management position}, his becoming a partner or his employment (whether under a contract of service or otherwise).

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"client", in relation to a regulated person, means a person who is using, or who is or may be contemplating of using, any of the services provided by the regulated person;

"controlled function" means a function of a description specified in the regulations.

The Authority may specify a description of function under subsection

only if, in relation to the carrying on of a regulated activity by a regulated person, it is satisfied that one of the following conditions are met -

{a} that the function is likely to enable the person responsible for his performance to exercise a significant influence on the conduct of the affairs of the regulated person so far as relating to the regulated activity;

{b}

that the function will involve the person performing it in dealing with clients of the regulated person in a manner substantially connected with the carrying on of the regulated activity;

{c}

that t~e function will involve the person performing it in dealing with property of clients of the regulated person in a manner substantially connected with the carrying on of the regulated activity.

Application for approval to exercise controlled function.