The regime, which aims to ensure individual accountability at senior level, will be extended to all financial services firms from 2018. Its scope includes incentives, remuneration and the steps firms take to address associated risks.
FCA chief executive Andrew Bailey, said that most firms who were regulated in March sent detailed grandfathering notifications and have engaged with the process from board level down. However, the regulator has seen evidence of overlapping or unclear allocation of responsibilities and in some cases firms appear to be sharing responsibility amongst more junior staff, obscuring who is genuinely responsible.
“Six months on and, in a great many cases, firms have made a substantial effort to get this right and embrace the importance of the key principles underlying the Senior Managers and Certification Regime, namely responsibility and accountability,” he said.
“Generally, we have observed that firms are taking their responsibilities seriously. 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 proposed measures to further strengthen the regime will reinforce the importance of individual accountability at the most senior level of organisations. The regulator has also confirmed final rules on regulatory references – the information firms must share in recruiting for key roles.
It will now consult on guidance for senior managers on the ‘duty of responsibility’; a new requirement for overseas banks to tell UK employees about whistleblowing services; and extending the conduct rules to all non-executive directors of banks and insurers.
In addition, the FCA will publish a discussion paper on how those heading up the legal function in firms should be treated under the regime.
All the consultations and tailored feedback to the firms already regulated by the regime can be found at https://www.fca.org.uk/publications
