The FCA has published Consultation Paper 17/42: The Duty of Responsibility for insurers and FCA solo-regulated firms (CP17/42).

In CP17/42 the FCA consults on extending the duty of responsibility (that already applies to firms currently subject to the Senior Managers and Certification Regime (SM&CR)) to FCA solo-regulated firms and insurance and reinsurance firms.

In CP17/42 the FCA summarises its position regarding certain matters relating to the duty of responsibility, these include:

  • the FCA’s guidance at DEPP 6.2.9 – A G, states that, in an action brought by the FCA against a senior manager under the duty of responsibility, the senior manager is not bound by a finding of the FCA’s Regulatory Decisions Committee, a court or a tribunal to which they were not privy nor party;
  • the FCA will decide whether to take action based on the duty of responsibility by applying its published criteria in DEPP;
  • the FCA will not apply standards retrospectively or with the benefit of hindsight;
  • the FCA has not stated in its guidance that the duty of responsibility will only apply in relation to a senior manager’s responsibilities set out in their statement of responsibilities. This is because it is possible for senior managers to be responsible for the management of activities at their firm that fall outside their prescribed responsibilities and such guidance could fetter the regulator’s ability to rely on the duty in a way not specified by Parliament; and
  • all the considerations in DEPP 6.2.9 – E G are potentially relevant to an assessment of the steps reasonably expected of all senior managers, whatever their role and responsibilities.

The deadline for comments on CP17/42 is 21 February 2018.

View CP17/42: The Duty of Responsibility for insurers and FCA solo-regulated firms, 13 December 2017