The Financial Services (Banking Reform) Act 2013 (the Act) created a legal framework for the senior managers’ regime and certification regime in the UK banking sector. The Act also gave HM Treasury the power to extend the reforms to cover UK branches of third country banks and certain third country investment firms by statutory instrument and imposed an obligation to consult representative organisations and other appropriate persons.
HM Treasury has now published a consultation paper and draft statutory instrument that would apply the senior managers’ regime and certification regime to UK branches of third country banks and third country investment firms that carry on the regulated activity of dealing in investments as principal in the UK and are regulated by the PRA. The draft statutory instrument would not make a senior manager in such a branch potentially liable to the new offence relating to a decision causing a financial institution to fail as set out in section 36 of the Act.
The deadline for responding to the consultation paper is 30 January 2015.