FCA Calls for Individual Responsibility with New Proposal for Regulated Firms
by
Colin Firth
FCA proposes to make its certification regime mandatory for all regulated firms.
In a bid to promote individual responsibility and integrity, the Financial Conduct Authority (FCA)) has extended the Senior Managers and Certification Regime (SM&CR) to all sectors of the financial services industry.
The FCA views these measures as a tool to further protect clients from harm, and to improve the integrity of the market as a whole, by bringing in individual responsibility and diligence.
The FCA has proposed that all the firms that it regulates adhere to a specific set of requirements, which it calls the 'core regime', and for those very large and complex firms it proposes an extra set of requirements, called an 'enhanced regime'.
The FCA proposes three parts to the SM&CR:
1. Five conduct rules that will apply to all financial services staff at FCA authorised firms. This simple set of rules means that individuals must act with integrity, due care, skill and diligence, be open and cooperative with regulators, pay due regard to customer interests and treat them fairly, and observe proper standards of market conduct.
2. The responsibilities of senior managers will be clearly set out and, should something in their area of responsibility go wrong, they will be personally held to account. Senior managers will be approved by the FCA and appear on the FCA register.
3. Under the certification regime, firms will certify individuals for their fitness, skill and propriety at least once a year, if they are not covered by the senior managers regime but their jobs significantly impact customers or firms.
Individual responsibility
Jonathan Davidson, Executive Director of Supervision- Retail and Authorisations at the FCA, said: “Culture and governance in financial services and its impact on consumer outcomes is a priority for the FCA. The extension of the Senior Managers and Certification Regime is key to driving forward culture change in firms.”
He added: “This is about individuals, not just institutions. The new Conduct Rules will ensure that individuals in financial services are held to high standards, and that consumers know what is required of the individuals they deal with. The regime will also ensure that Senior Managers are accountable both for their own actions, and for the actions of staff in the business areas that they lead.”
Up until now, when things went wrong the focus was on the companies and not an individual or a group, even though the latter are the ones at fault.
By making sure that the responsibility is distributed to individuals as well, the FCA would look to ensure that employees also understand the regulatory requirements and feel responsible to act accordingly and keep customers interests paramount while making decisions.
In a bid to promote individual responsibility and integrity, the Financial Conduct Authority (FCA)) has extended the Senior Managers and Certification Regime (SM&CR) to all sectors of the financial services industry.
The FCA views these measures as a tool to further protect clients from harm, and to improve the integrity of the market as a whole, by bringing in individual responsibility and diligence.
The FCA has proposed that all the firms that it regulates adhere to a specific set of requirements, which it calls the 'core regime', and for those very large and complex firms it proposes an extra set of requirements, called an 'enhanced regime'.
The FCA proposes three parts to the SM&CR:
1. Five conduct rules that will apply to all financial services staff at FCA authorised firms. This simple set of rules means that individuals must act with integrity, due care, skill and diligence, be open and cooperative with regulators, pay due regard to customer interests and treat them fairly, and observe proper standards of market conduct.
2. The responsibilities of senior managers will be clearly set out and, should something in their area of responsibility go wrong, they will be personally held to account. Senior managers will be approved by the FCA and appear on the FCA register.
3. Under the certification regime, firms will certify individuals for their fitness, skill and propriety at least once a year, if they are not covered by the senior managers regime but their jobs significantly impact customers or firms.
Individual responsibility
Jonathan Davidson, Executive Director of Supervision- Retail and Authorisations at the FCA, said: “Culture and governance in financial services and its impact on consumer outcomes is a priority for the FCA. The extension of the Senior Managers and Certification Regime is key to driving forward culture change in firms.”
He added: “This is about individuals, not just institutions. The new Conduct Rules will ensure that individuals in financial services are held to high standards, and that consumers know what is required of the individuals they deal with. The regime will also ensure that Senior Managers are accountable both for their own actions, and for the actions of staff in the business areas that they lead.”
Up until now, when things went wrong the focus was on the companies and not an individual or a group, even though the latter are the ones at fault.
By making sure that the responsibility is distributed to individuals as well, the FCA would look to ensure that employees also understand the regulatory requirements and feel responsible to act accordingly and keep customers interests paramount while making decisions.
BGC Group Secures Backing from Global Banks for New $600M Trading Platform
Network, Learn, Grow | FMAS:24
Network, Learn, Grow | FMAS:24
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Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
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Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
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Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
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Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
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Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
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