FCA publishes final rules on strengthening accountability in banking

Financial Services Regulatory Alert


On 4 February 2016, the FCA set out further final rules on the new Senior Managers Regime (PS16/3: Strengthening Accountability in Banking - Feedback on CP15/22 (July 2015) and CP15/31 (October 2015); rules on extending the certification regime to wholesale market activities and interim rules on referencing).

The publication follows the final rules, published in July 2015 for UK relevant authorised persons (RAPs) and December 2015 for Foreign Branches, which set out the FCA and PRA's approach for strengthening accountability in the banking sector.

The policy statement confirmed that the new certification regime, which aims to hold individuals to the appropriate standards of conduct throughout all levels in banks, will now be extended to those performing two new functions - the "client-dealing" and the "algorithmic trading" functions.

Firms have until 7 September 2016 to identify and train staff for these two new functions. This is three months longer than for all other Significant Harm Functions (SHFs). The requirement to have certificates for all those identified as SHFs (including the new 'algorithmic trading' and 'client dealing' functions) by 7 March 2017 will remain unaffected.