The UK’s Financial Conduct Authority (FCA) has proposed a series of measures to strengthen the senior managers’ and certification regime in order to reinforce the importance of individual accountability for senior level executives at financial services firms.
The regime, introduced in March 2016, is run by the FCA and the Prudential Regulation Authority (PRA).
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The regulators said that the regime should now apply to all non-executive directors of banks and insurers. The proposed rules will also require UK branches of overseas banks to tell their UK based staff about the whistleblowing services offered by the FCA and the PRA.
In addition, the watchdog also launched a discussion to clarify how executives heading legal function at regulated firms should be treated under the regime.
Prior to the regime’s introduction, firms sent detailed grandfathering notifications, statements of responsibilities and firm responsibilities maps.
“In some cases, the FCA has seen evidence of overlapping or unclear allocation of responsibilities. In other cases firms appear to be sharing responsibility amongst more junior staff, obscuring who is genuinely responsible. This goes against the intent of the Senior Managers and Certification Regime and must be addressed,” FCA said.
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By GlobalDataFrom 2018 onwards, the regime will be extended to all regulated financial services firms, including asset managers and hedge funds.
FCA CEO Andrew Bailey said: “Generally, we have observed that firms are taking their responsibilities seriously and have broadly got the regime right. But we recognise culture change takes time and there is still more to do. So we have to keep a watchful eye on the progress firms are making.”
