The new individual accountability regime is set to come into force on the 9th December 2019. The Financial Conduct Authority published what have been branded their ‘near-final’ rules on how solo regulated firms should implement the Senior Managers & Certification Regime earlier this year.
The Senior Managers & Certification Regime is designed to make sure companies, organisations and their employees understand and are able to outline which tasks are completed by which individuals. The regime has also been introduced to underline the importance of personal responsibility and to improve the quality of staff conduct within organisations.
The FCA also plans to launch a new public directory of individuals working within financial services. The new directory would complement the current FCA Register and would include certified individuals as well as non-senior manager function directors and some individuals working in customer-facing roles.
The Individual Accountability Regime is being introduced to encourage companies and organisations working within finance to comply with Senior Management Regime, Certification Regime and Conduct rules, helping them manage accountability. The new regulations have been designed to strengthen the alignment of risk and reward within the financial sector.
Senior management functions now need pre-approval from the regulators, and firms are set to be re-assessed against the new conduct rules on an annual basis. All breaches must be reported to regulators, and organisations must be able to provide evidence of compliance upon request. Plans to address issues must be outlined and individuals must be certified as “fit and proper” for their roles within a business.
The requirement for individual accountability is a global trend, with more and more countries tightening up their regulations. The main reasons for this are to reduce risk-taking, mitigate the risk of misconduct and to hold senior managers to account in the event of regulatory breaches. The new regime has also been implemented to enhance competency amongst staff.
The three components of the accountability regime are the senior managers regime, the certification regime and the new conduct rules. The senior managers regime aims to heighten senior manager accountability and responsibility, whilst the certification regime is designed to ensure firms can certify that their employees that are not senior managers but do have considerable responsibility are ‘fit and proper’ to perform their role. The new conduct rules are a number of behavioural standards that have been set for senior individual standards and employees to abide by.
Redland can come to your assistance if you are in need of individual accountability software. The company has won a number of accolades over recent years, being named as the RegTech Solution in 2018. The software offered by Redland allows finance companies and organisations to deliver effective, efficient management of the Individual Accountability Regime. Software is also available for streamlining business processes, quality checking, training and competency and performance oversight of KPIs. Contact Redland today by calling +44 (0)1527 871938 or by sending a message to firstname.lastname@example.org.
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