On 9 May 2016, the Financial Services (Banking Reform) Act 2013 (Commencement No 11) Order 2016 (SI 2016/568) and the Bank of England and Financial Services Act 2016 (Commencement No 1) Regulations 2016 (SI 2016/569) were published, marking the coming into force of sections 66A and 66B of the Financial Services and Markets Act 2000 (FSMA) in relation to misconduct by approved persons.
Sections 66A and 66B of FSMA were originally introduced by section 32(2) of the Financial Services (Banking Reform) Act 2013. Under these provisions, senior managers were deemed to be guilty of misconduct if there had been a breach of any regulatory requirement in an area for which they were responsible, unless they could prove that they had taken reasonable steps to avoid the breach happening, otherwise known as “presumption of responsibility".
Section 25 of the recent Bank of England and Financial Services Act 2016 amended sections 66A and 66B of FSMA to reverse the presumption of responsibility, so that no senior manager will be guilty of misconduct unless the FCA or the PRA can prove that reasonable steps were not taken by them to avoid the breach occurring or continuing.
Both sections 66A and 66B came into force on 10 May 2016.