UK regulators propose fewer misconduct reports and manager checks
Plans reported on 22 October would narrow misconduct reporting and remove extra checks for an estimated 140,000 financial managers.
The Bank of England and Financial Conduct Authority announced plans on 22 October to reduce misconduct reporting and checks on managers across the UK financial sector, the Guardian reported. The proposals would ease parts of an accountability regime introduced after the 2008 banking crisis; the reported changes have not yet taken effect.
About 140,000 managers would be freed from extra checks under the plans, according to the Guardian. Only the most senior executives, including chief executives and chief financial officers, would have to demonstrate each year and before taking a new job that they are fit and proper. The report did not specify when the changes would begin.
How misconduct reporting would change
Firms would no longer have to report first warnings or lower-level misconduct of limited relevance to regulators, such as staff arriving late or dropping calls, the Guardian reported. Regulators would instead require reports of serious misconduct and cases ending in a final warning or dismissal. Initial misconduct cases would still have to be flagged to senior executives, including chief executives and chief financial officers.
The Bank of England and FCA said the changes would save businesses about £2bn over 10 years. Their reported estimates also put annual reductions in the Bank of England’s costs at £11.5m and the FCA’s at £229m. Those figures are regulators’ projections for the proposed changes.
Why the Senior Managers Regime exists
The Senior Managers Regime was introduced in the mid-2010s amid anger that few bank bosses were held accountable for actions contributing to the financial crisis, the Guardian reported. Initially covering banks, it was later extended to financial services firms including asset managers and hedge funds. The Bank of England says the regime applies to relevant authorised persons and insurers; its Conduct Rules cover specified senior managers, employees in certification functions and certain directors.
The proposals come as regulators pursue a government objective to make UK firms more competitive internationally, the Guardian reported. They were announced while the regulators hosted a dinner for City executives at London’s Mansion House. In a joint statement quoted by the Guardian, the Bank of England and FCA said ‘high standards of individual accountability and conduct will remain unchanged’, including their commitment to holding people accountable for misconduct affecting society and their employers.
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Sources and context
- UK to relax post-2008 rules that hold City bosses accountable for wrongdoingThe Guardian
- Senior Managers RegimeBank of England
AI-assisted article checked against the listed sources. NewsJaws did not conduct interviews or attend the reported events.
