Next phase of the new accountability regime for UK financial services

Next phase of the new accountability regime for UK financial services

Six months on from implementation of the senior managers and certification regime, the regulators have announced further steps in the development of accountability in financial services. Andreas White, a partner at Kingsley Napley, indicates that the latest rules, guidance and consultation papers from the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) demonstrate their continued focus on culture, personal accountability and responsibility.

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FCA publishes new rules and proposals on firms’ culture

The Financial Conduct Authority (FCA) has published a number of documents which set out new rules concerning the senior managers and certification regime, provide feedback on its implementation so far and propose measures to further strengthen the regime. The proposed rules will reinforce the importance of individual accountability at the most senior levels of organisations.

PRA outlines accountability, remuneration rules and whistleblowing requirements

PRA consultations, supervisory statements and policy statements: The PRA has published a package of final rules, guidance and proposals on accountability, remuneration and whistleblowing. These give important clarity to the PRA’s supervisory approach in these areas.

What is the background to the latest rules, guidance and proposals?

They form part of the on-going development of the new regulatory framework for financial services contained in the senior managers and certification regime, and the new conduct rules. Since the Parliamentary Commission on Banking Standards there has been a concerted drive to improve the culture of financial services, to avoid future financial scandals and ensure that there is accountability and responsibility for risk management, compliance and wrongdoing from the top down.

How have the regulators dealt with regulatory references in their final rules?

The regulators have now published their final rules on regulatory references. The full reference regime will come into effect on 7 March 2017 (at the same time as the full certification regime and the application of the conduct rules to the

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About the author:
Melanie Ball joined LexisNexis in February 2015 having previously been an associate at Orrick Herrington & Sutcliffe LLP within the Financial Institution Regulatory practice. Melanie was also a member of Orrick’s European Litigation Group. Prior to joining Orrick in 2012, Melanie worked in an advisory role at Morgan Stanley and was a solicitor at DLA Piper UK LLP.