The willingness of financial regulators to get tough with individuals has never been greater. The financial crisis and high profile cases of misconduct have contributed to a sense of cultural and behavioural problems in the financial services industry that regulators want to be seen to be tackling. However, despite increasing levels of enforcement action against firms, the UK’s Financial Conduct Authority (the FCA) and Prudential Regulation Authority (the PRA) have relatively modest records of enforcement action against individuals arising from high profile misconduct or mis-management.
The FCA and the PRA published draft rules in December 2014 and further clarifications in February 2015. Near final rules were published by the FCA on March, 16 2015. On the same day, the FCA and PRA issued a joint consultation paper on applying the senior managers regime to UK branches of foreign banks. On March, 23 2015, the PRA also published a policy statement titled, ‘Strengthening individual accountability in banking and insurance’, and setting out certain finalized rules. The PRA expects to publish a further set of finalized rules later in 2015. The UK government has announced that the new regime will take effect from March, 7 2016. This briefing considers the changes and their implications for the industry.
