We are consulting on proposals to apply the new individual accountability regime for banks, building societies, credit unions and PRA-designated investment firms (relevant authorised persons) to individuals working in UK branches of foreign banks (incoming branches).
Why are we publishing this paper?
The Treasury have consulted on a draft order to extend the definition of a relevant authorised person to incoming branches. On 3 March 2015, the Treasury announced in a Written Ministerial Statement (WMS) to Parliament that it would apply the new accountability regimes to incoming branches. In anticipation of the secondary legislation extending the regime to incoming branches, this consultation puts forward proposals to extend and, where appropriate, tailor the new regime to incoming branches.
The regime is comprised of a Senior Managers Regime, Certification Regime and Conduct Rules, and aims to encourage individuals to take greater responsibility for their actions and make it easier for both firms and the regulators to hold individuals to account.
Consultation paper 15/10 [PDF][1]
Who should read this paper?
The proposals in this consultation relate to incoming branches of relevant authorised persons. In addition to the incoming branches themselves, the proposals will affect a large number of individuals within those firms, including, but not limited to, all their existing Approved Persons. This consultation paper does not apply to incoming branches of any firms other than relevant authorised persons.
What other publications are relevant?
Alongside this paper, we are issuing a paper (CP15/9)[2] providing feedback on the responses received to our previous consultation on the new individual accountability regime for UK firms in July 2014 and setting out our policy intentions as a result. CP15/9 signposts where the FCA intends to change its original proposals for UK firms and where it intends to also apply the relevant change to incoming branches, and should therefore be read alongside this CP. CP15/9 also includes a consultation element concerning further more detailed guidance on the application of the presumption of responsibility to all relevant authorised persons, including incoming branches.
In addition to CP15/9, incoming branches should also have regard to our previous consultations on individual accountability:
- PRA CP14/14 / FCA CP14/13[3] on Strengthening accountability in banking: a new regulatory framework for individuals, published in July 2014
- PRA CP28/14 / FCA CP14/31[4] on Strengthening accountability in banking: forms, consequential and transitional aspects, published in December 2014
- PRA CP7/15 / FCA CP15/5[5] on Approach to Non-Executive Directors in banking and Solvency II insurance firms & Application of the Presumption of Responsibility to Senior Managers in banking firms
Next steps
We want to know what you think of our proposals and welcome comments by 25 May 2015.
Please send your responses to both regulators at the following addresses:
[email protected] and [email protected].
We plan to publish a policy statement containing final rules for incoming branches in summer 2015.