On 15 October 2015, the Bank of England and Financial Services Bill 2015-2016 was published.
Of most note is Part 2 of the Bill, which amends the Financial Services and Markets Act 2000 (FSMA), extending the Senior Managers regime to all firms which are authorised to provide financial services under FSMA.
Section 22 of the Bill also amends the definition of ʺmisconductʺ so that, where there has been a regulatory contravention in an area for which they are responsible, senior managers no longer have to prove that they have taken reasonable steps to prevent that contravention to avoid being found guilty of misconduct. Instead, regulators will be required to prove that a senior manager has not taken such steps before they can bring disciplinary proceedings against a senior manager on this ground.
Whilst reinstatement of the principle of “innocent until proven guilty” is a welcome change, the extension of the Senior Managers Regime will mean that more executives now stand to be accountable. Those who will be performing senior management functions for the first time once this Bill hits the statute book need to give consideration to the changes they will be required to implement as a consequence.Contact Us