Bankers To Face 'Annual MOT' Under FCA Rules

Written By Unknown on Senin, 16 Maret 2015 | 23.33

By Mark Kleinman, City Editor

Lenders will be required to annually certify the fitness of staff to perform their roles under a new framework that will reinforce the City watchdog's new-found status as one of the world's toughest banking supervisors.

Sky News understands that the Financial Conduct Authority (FCA) will announce on Monday that proposed final rules for banks operating in the UK will put the onus on affected companies to assess and certify the propriety of thousands of staff working in the industry.

The new rules will be confirmed in a speech by Martin Wheatley, the FCA chief executive, and will demonstrate the extent to which banking regulators are attempting to increase industry accountability following a series of mis-selling and market-rigging scandals in the aftermath of the financial crisis.

Industry sources described the development as a blow to the banking industry's hopes of limiting the bureaucratic burden of the new regime.

Following a report in 2013 by the Parliamentary Commission on Banking Standards, which recommended a new template for supervising bankers' behaviour, some banks had argued that the FCA itself should be responsible for certifying those working in the industry.

In a consultation document last year, the FCA said: "The (Banking Reform) Act has introduced… the requirement for firms to certify certain employees as being fit and proper to perform certain functions.

"This originated from the PCBS's recommendation that a 'licensing regime' be introduced to address concerns that the existing Approved Persons Regime brought too narrow a set of individuals within the scope of regulation, and that firms took insufficient responsibility for the fitness and propriety of their staff."

Mr Wheatley hinted in December that banks should expect the new rulebook to increase the burden on them, saying: "The management of conduct and culture, as issues that have escalated over the last few years, are perhaps complicated by a lack of institutional attention to dealing with them in the past.

"What should not be difficult… is for individuals to take responsibility for their actions. You should not need a rule book to determine right from wrong.

"Indeed, it would be impossible and, frankly, undesirable for any regulator to attempt to codify the limits of what is, or is not, morally acceptable."

The Prudential Regulation Authority (PRA), which sits within the Bank of England, has also issued a new rulebook covering the responsibilities of senior managers, who will be presumed to be responsible for the failure of an institution unless they can demonstrate that they took reasonable steps to prevent it.

Last month, the two watchdogs said they would limit the presumption of responsibility to non-executive directors carrying out delegated duties, absenting some board members from the scope of the framework.

The PRA is also planning to publish further details of its plans for regulating banks on Monday, covering those working at UK branches of overseas firms.

The FCA and PRA both declined to comment on Sunday.


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