The rules are aimed mainly at those holding top positions in banks, building societies and certain large-scale investment firms. However, some will cover all staff deemed to pose a risk of significant harm to the firm or its customers, including those who give investment advice or submit to benchmarks.
“Today we have given clarity on rules that will embed personal accountability into the culture of the City,” said Martin Wheatley, Financial Conduct Authority chief executive.
“New conduct rules will add further momentum to improving standards across the industry,” he said.
Under the new system a Senior Managers Regime (SMR) will ensure that top level managers in the banking sector can be held accountable for any misconduct that falls within their areas of responsibilities. While a Certification Regime and new Conduct Rules will aim to hold individuals working at all levels in banking to appropriate standards of conduct.
“New conduct rules will add further momentum to improving standards across the industry.”
The Certification Regime requires that, while staff who give investment advice won’t have to be pre-approved by the regulators, firms will need to put in place procedures for assessing their fitness and propriety, for which the companies will be accountable to the regulators.
The FCA said these procedures will be important for both recruiting new staff and when conducting appraisals each year of existing staff who are subject to the regime.
The Conduct Rules set out a basic standards for behaviour that all those covered by the new regimes will be expected meet. Firms will have to ensure all staff subject to them understand and know how they affect them.
