The Financial Conduct Authority (FCA) will consult on several proposals to strengthen its Senior Managers and Certification Regime, saying "there is still more to do" to improve accountability and governance at financial firms.
As part of the measures, the FCA will consult on guidance for senior managers on their duty of responsibility; a new requirement for UK branches of overseas banks to tell their UK-based employees about the whistleblowing services offered by the regulator; and the extension of conduct rules to all non-executive directors of banks and insurers.
In addition, the FCA will publish a discussion paper about how those heading up the legal function in firms should be treated.
The Senior Managers and Certification Regime was introduced in March this year and will be extended to all regulated financial services firms, including asset managers, in 2018.
It was designed to make sure senior managers and staff who could pose a risk of significant harm to a firm or its customers can be held accountable for any misconduct that falls within their areas of responsibilities.
Writing in The Guardian today, FCA CEO Andrew Bailey said that, generally, firms are taking their responsibilities seriously and have broadly got the regime right, but there is still more work to do in this area.
He said: "Since the regime was introduced, we have been undertaking work to ensure that senior manager responsibilities are properly allocated and understood in firms. In some cases, we have seen evidence of overlapping or unclear allocation of responsibilities.
"In other cases, firms appear to be sharing responsibility among more junior staff, obscuring who is genuinely responsible. This goes against the intention of the senior managers and certification regime and should not continue."
He added: "Responsibility, accountability and governance in financial services firms and their impact on conduct has been, and remains, a priority for the FCA with a focus on the most significant drivers of good or poor mindsets and behaviours. This includes incentives and remuneration, and the steps firms take which address associated risks."
