This week Economic Secretary to the Treasury Andrea Leadsom MP announced that new rules for senior individuals in the banking industry will be introduced from this time next year. The Senior Managers and Certification Regime (SM&CR), expected to be published later this year, are envisaged to enable the FCA and PRA to fine or sanction senior bankers for misconduct that occurs in their areas of responsibility.
These sanctions are to include a new criminal offence relating to decisions causing a financial institution to fail. As stated in the Government’s recent press release,
From 7 March 2016, senior managers in UK banks, building societies and PRA-regulated investment firms (but not credit unions or foreign banks) whose reckless misconduct causes their institution to fail could face up to 7 years in prison.
It has been confirmed that these rules will also apply to UK branches of foreign banks from the same date, and such firms have until 8 February 2016 to notify regulators of the names of their senior staff.
While we await the publication of the SM&CR, please contact Alan Knowles (Partner in our Banking & Finance team) or our expert business ethics compliance Partner Paul Marshall if you have any queries about how to prepare for the introduction of these rules.
On March 5, 2015