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Screenshot of a breaking news alert e-mail from Q2 2017
In March this year, the Financial Conduct Authority (FCA) confirmed its approach toward improving responsibility and accountability in the banking sector.
At that time, the British regulator implemented a new Senior Managers Regime (SMR) which sought to promote a clear allocation of responsibilities to key decision-makers and strengthen their individual accountability through a robust initial and ongoing assessment of their fitness and propriety (by firms as well as by regulators) and strengthened powers of approval and enforcement for the regulators. Following a detailed consultation across industry and with stakeholders, it was decided the regime would not apply to those NEDs who do not perform delegated responsibilities.
Today, Marshall Bailey, President and Global Head of the ACI Financial Markets Association has provided his introspective on the SMR.
Mr. Bailey is a senior banking industry professional whose career expands across leadership positions in many large institutions, as well as non-executive directorships at CIBC World Markets and UK Financial Investments.
“The Financial Conduct Authority’s (FCA) final rules regarding the Senior Managers Regime (SMR) highlight the importance of managerial responsibility to ensure appropriate conduct at an individual level. This announcement is the latest example of a shift in culture towards a more proactive approach to self-regulation. The ACI FMA has long maintained that instilling individual accountability and ensuring individuals are educated on ethical conduct are the the most effective ways of changing behaviour” stated Mr. Bailey.
“Education is crucial if we are to rebuild the reputation of the financial industry, which has been tarnished by the actions of a small minority acting in an unethical manner. The FCA presents a clear framework to ensure that individuals are aware of exactly what is expected of them, and it will go a long way to embedding high standards of conduct and practices within organisations” he continued.
“However it is critical that individual knowledge is continuously tested and monitored, at all levels – from the most junior ranks up to senior management at board level – to ensure that they acknowledge and abide by an enforceable code of conduct.”
“Initiatives such as the ACI’s e-Learning and Certification (ELAC) Portal allow individuals and their managers to continually assess their knowledge of the Model Code, ensuring that they can quickly adopt new guidance, address any knowledge or conduct gaps and most importantly, uphold the highest standards of professionalism and behaviour” concluded Mr. Bailey.