The FCA has published Feedback Statement 15/3: Strengthening accountability in banking: UK branches of foreign banks (FS15/3).
In FS15/3 the FCA provides near-final rules in anticipation of secondary legislation coming into force that will extend the statutory elements of the new individual accountability regime to incoming branches. By publishing near-final rules ahead of this legislation, the FCA intends to give firms as much time as possible to prepare for the changes. The FCA plans to publish final rules later in the year, as soon as it is possible after the secondary legislation is finalised.
The majority of the feedback to the FCA’s earlier consultation asked for further clarity about the intention and application of its proposals in practice and the FCA has sought to address this feedback in FS15/3 and near-final rules.
In relation to the senior managers’ regime the FCA has made changes to its regime to address the feedback received and clarify the rules. In particular, for non-EEA branches it has amended the list of senior management functions and its guidance on remote booking. In particular for non-EEA branches the FCA is splitting what was originally one senior management function, the Overseas Branch Senior Manager into an Executive Director and Other Local Responsibility functions. For EEA branches it has provided further guidance on the EEA branch senior manager function and has clarified what the responsibilities map for EEA branches should include.
In relation to the certification regime the FCA has provided additional guidance on what is meant by the term ‘client in the UK’, and additional information to assist firms in identifying any of their overseas staff who meet the definition of a certified person.
Previously the FCA consulted on the conduct rules having a wide application to employees in incoming branches; however the conduct rules will only apply to staff in EEA branches in relation to matters that are within the UK’s scope of responsibilities as the host state regulator. The FCA reports that respondents requested examples of where the conduct rules might not apply in EEA branches. The FCA states that it has not made any changes to its rules in this regard, as whether the conduct rules apply will depend on the particular circumstances of the matter in question.
View FS15/3: Strengthening accountability in banking: UK branches of foreign banks – Feedback on FCA CP15/10 / PRA CP9/15, 13 August 2015