The FCA’s new regulatory framework for individuals and how it affects you

Last month, the FCA announced a significant framework for the banking sector that provides firms and regulators with the tools to hold individuals to account. The new policies, Senior Managers Regime and Certification Regime, were designed to encourage individuals to take greater responsibility for their actions and for firms to take full responsibility for the fitness and propriety of their staff.

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Andrew Bailey, Deputy Governor, Prudential Regulation and Chief Executive Officer of the PRA said:

The combination of clearer individual responsibilities and enhanced risk management incentives will encourage individuals in banks to take greater responsibility for their actions. We believe that enhancing individual accountability and improving the alignment of risk and reward should have a positive impact on behaviour and culture within banks and will help to ensure that they are managed in a way that promotes the safety and soundness of individual institutions.

The Senior Managers Regime affects individuals performing a Senior Management Function in the UK or overseas for UK banks, building societies, credit unions and PRA-designated investment firms. As well as clarifying the lines of responsibility and giving the regulators greater powers to hold senior individuals to account, the SMR requires banks to regularly assess that senior staff understand and conform to the relevant standards.

The Certification Regime requires that all UK bank, building society, credit union and PRA-designated investment firm employees performing a role relating to their firm’s regulated activities which is not a Senior Management Function but could pose a risk of significant harm to the firm or its customers, to be assessed and certified as competent at least annually.

Both policies, which come into play on 7 March 2016, will be underpinned by a new set of Conduct Rules which set out the required standards of behaviour.  The FCA will publish a Policy Statement with final rules on the new accountability regime in the spring/summer 2015.

How does it affect you?

The new regulation highlights that it’s never been more important to ensure you have the correct systems, training and controls in place to ensure that every relevant member of staff conforms to the requirements, is competent to undertake their role and also understands their individual responsibilities.

To help you meet these challenges, Unicorn have joined forces with leading financial services consulting and training specialists, FSTP, to introduce, ComplianceServe, an enhanced sector-specific compliance learning solution aimed at FCA regulated firms.

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ComplianceServe gives firms and their employees access to industry-leading online compliance training which is constantly evolving in line with regulatory change, such as the Senior Managers Regime and Certification Regime.

ComplianceServe is hosted on our learning and performance platform, SkillsServe, ranked global top LMS for financial services and 5th overall across all sectors in the Top 50 LMSs Report 2015, compiled by leading global eLearning analyst and consultant Craig Weiss.

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To find out more call us on 0845 130 5138 or email enquiries@unicorntraining.com

One response to “The FCA’s new regulatory framework for individuals and how it affects you”

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