Strengthening accountability in banking: an update on regulatory references and extension of the certification regime to wholesale market activities

Written on 9 Feb 2016

On 4 February 2016 the Financial Conduct Authority published Policy Statement 16/3 which confirms an interim regime for regulatory references and an extension of the Certification Regime to wholesale market activities.

Contents of the Policy Statement

The Policy Statement confirms that:

  • The certification regime will be extended to individuals performing client-dealing and algorithmic trading functions. Firms will have until 7 September 2016 to identify staff in these functions and train them in the conduct rules.
  • There will be a 30-day grace period for FCA significant harm functions (SHFs) so that anyone entering the UK for a short period does not need to be certified as fit and proper. 
  • Certificates for SHFs can be issued for a shorter period than one year if deemed appropriate by firms.
  • The proposed rules on regulatory references for candidates applying for Senior Manager and SHF functions will not be implemented at the commencement of the new regime. As an interim measure, the FCA will apply the existing reference requirements under the Approved Persons regime to firms and these will not apply to candidates performing SHFs. The FCA aims to publish its rules on regulatory references in the summer. 

 Implementation dates for the Senior Managers and Certification regime 

With the implementation date for the Senior Managers and Certification regime around the corner, a reminder of the key implementation dates is below: 

  • Firms are required to submit grandfathering notifications for existing approved persons who will be performing senior management functions under the new regime by 8 February 2016. 
  • Firms must identify individuals subject to the certification regime and train them in respect of the conduct rules, which will apply when the new regime begins on 7 March 2016. 
  • A firm has until 7 September 2016 to identify staff under the new client-dealing SHF or the new algorithmic trading SHF and to train them in respect of the conduct rules, which will also apply from 7 September 2016. 
  • Firms will have one year, until 7 March 2017, to prepare for the wider application of the conduct rules to other staff. 
  • Firms’ deadline for issuing certificates for individuals under the certification regime is 7 March 2017.

 The FCA press release and full policy statement can be found here.