The Financial Conduct Authority (FCA) has announced that it will consult on new measures to reinforce individual accountability, six months after the Senior Managers and Certification Regime was introduced.

The proposed measures include:

  • Providing new guidance on the "Duty of Responsibility";
  • A new requirement for UK branches of overseas banks to tell their UK-based employees about the whistleblowing services offered by the FCA and the PRA; and
  • Extending the conduct rules to all non-executive directors of banks and insurers.

The FCA has also indicated that it will publish a discussion paper about how those heading up the legal function in firms should be treated under the Senior Managers and Certification Regime.

Andrew Bailey, Chief Executive of the FCA, 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."
The overall message from the FCA is positive and provides comfort to those firms who will become subject to the regime in 2018. However, the FCA has reported that they have seen evidence of overlapping or unclear allocation of responsibilities, or that some responsibilities have been shared amongst more junior staff. This goes against the intent of the Senior Managers and Certification Regime and must be addressed.

If you have any questions regarding the allocation of responsibilities, or the proposed changes for overseas banks with UK branches and the plans to bring non-executive directors within the existing conduct rules, please do get in touch.

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