The Bank of England andf Financial Services Bill 2015-16 has been published following its first reading. The Bill contains amendments to existing primary legislation, including the Bank of England Act 1998 (BoE Act) and the Financial Services and Markets Act 2000 (FSMA), in respect of the Bank of England and the senior managers and certification regime (SM&CR).
In particular the Bill replaces the Approved Persons Regime by extending the SM&CR to all financial services firms and introduces a statutory duty of responsibility to be applied to all senior managers across the financial services industry.
HM Treasury has also released a policy paper detailing these proposals. Key features of SM&CR include:
- An approval regime focused on the personal responsibilities of senior management.
- A statutory requirement for senior managers to prevent breaches in their area of responsibility.
- A requirement on firms to certify any individual who performs functions that could cause significant harm to the firm or its customers.
- Power of regulators to enforce Rules of Conduct to any individual.
The SM&CR will come into effect for banks, building societies, credit unions and PRA-regulated investment firms on 7 March 2016 (with banking sector firms being given until 7 March 2017 to complete certification).