HM Treasury has published a policy paper entitled Senior Managers’ and Certification Regime: extension to all FSMA authorised persons.
In the policy paper the UK Government proposes to extend the senior managers regime, certification regime and new conduct rules to all authorised financial services firms including mortgage brokers and consumer credit firms.
Chapter 4 of the policy paper covers reforms to the Senior Managers’ and Certification Regimes, noting that:
- the UK Government has decided to introduce a statutory duty of responsibility to be applied consistently to all senior managers across the financial services industry. This supersedes the ‘reverse burden of proof’ which would have applied to banking sector firms when they become subject to the new regimes in March 2016;
- the underlying obligation will remain on the individual to ensure that they take reasonable steps to prevent regulatory breaches in the areas of the firm for which they are responsible, but the burden will be on the regulators to prove that a senior manager has failed to do this;
- the Bank of England and Financial Services Bill (the Bill) provides for the PRA and FCA to be able to make new conduct rules that apply to non-executive directors; and
- the Bill also removes the provision in the Financial Services and Markets Act 2000 (as amended) that requires banking sector firms to report all known or suspected breaches of rules of conduct by any employees subject to those rules to the regulators.
The UK Government intends to implement the extended regime so that it comes into operation during 2018.
View Senior Managers and Certification Regime: extension to all FSMA authorised persons, 15 October 2015