Financial watchdog broadens rules in bid to clean up banking sector
Britain's financial watchdog has broadened the scope of rules aimed at cleaning up banking culture to take in all sectors of the financial services industry.
The Financial Conduct Authority (FCA) published proposals on Wednesday to extend the Senior Managers Regime to almost all regulated firms.
The aim of the new regime, the FCA said, is to "reduce harm to consumers" and "strengthen market integrity" by making individuals more accountable for their conduct and competence.
Jonathan Davidson, the FCA's executive director of supervision, said: "This is about individuals, not just institutions.
"The new conduct rules will ensure that individuals in financial services are held to high standards, and that consumers know what is required of the individuals they deal with.
"The regime will also ensure that senior managers are accountable both for their own actions, and for the actions of staff in the business areas that they lead."
The Senior Managers Regime was brought in as part of an attempt to rebuild public trust in an industry blighted by numerous scandals stemming from the financial crisis.
The FCA said the regime aims to encourage a culture of staff at all levels taking personal responsibility for their actions and to ensure firms and workers clearly understand and can demonstrate where responsibility lies.
Grant Lee, financial services risk and regulation partner at PwC, said: "Firms need to engage now - some banks failed to engage early with the proposals and found the subsequent process more challenging than they expected.
"Firms are already flat-out tackling other regulatory issues such as MiFID II, the Insurance Distribution Directive, PRIIPs and GDPR, let alone managing the uncertainty of Brexit so the FCA must be pragmatic in its approach, expectations and deadlines."