This paper sets out the our revised approach to independent non-executive directors (NEDs) in UK banks, building societies, credit unions and PRA-designated investment firms (relevant authorised persons) and Solvency II firms.
Why are we publishing this paper?
The revised approach takes into account feedback to the consultation on Strengthening accountability in banking: a new regulatory framework for individuals[1], published in July 2014, which expressed concern about the proposed approach to NEDs under the SMR as set out in that CP. Under the revised approach the PRA and FCA will only make the following NEDs subject to approval and inclusion in the Senior Managers Regime (SMR) for relevant authorised persons:
- Chairman
- Chair of the Risk Committee
- Chair of the Audit Committee
- Chair of the Remuneration Committee
- Chair of the Nomination Committee
- Senior Independent Director
For the FCA, this paper also consults on:
- the approach to NEDs in the approval and individual accountability regime for Solvency II firms, which the PRA and FCA propose to align to the scope of the SMR for relevant authorised persons
- FCA guidance on the role and responsibilities on the role and responsibilities of NEDs
Who should read this paper?
This paper affects relevant authorised persons and Solvency II firms.
This paper does not affect insurance firms that are not subject to the Solvency II directive (non-directive firms). It applies to UK branches of Solvency II firms that are headquartered overseas (incoming Solvency II branches) but not to UK branches of relevant authorised persons that are headquartered overseas (incoming relevant authorised person branches).
Next steps
We want to know what you think of our proposals and welcome comments by 27 April 2015. Please send your responses to both regulators at the following addresses: [email protected] and [email protected].