Parker Fitzgerald Managing Partner, Scott Vincent, comments on the FCA’s proposed implementation of the Senior Managers Regime (SMR)
“Although this new regime and conduct code shift the burden of proof from the regulator onto the regulated, it still does not address the issue of too-big-to-manage. As we approach the implementation deadline in March next year we may see some major brands sound the alarm. Attesting to the good conduct and controls of a global institution will be enormously challenging for all international banks.
“It would have been interesting to see what the SMR would have looked like had its definition been left to the regulators, rather than policymakers and politicians. Although this is certainly a positive step for the UK, I am still not confident the new rules will be enough to guarantee good conduct unless they are adopted globally. A G-SIFI must not be able to point to a conflict of legislation between its home regulators and those it answers to in the UK.
“Finally, it’s now clear that if the FCA believes there are long-term, inherent conduct risks within a regulated institution, there is a number of powerful tools it can deploy to force firms into taking immediate action. These now include increased capital requirements and denial of market access, as well as fines and the removal of individual bad apples”.
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