Helping to organise
A comprehensive checklist created from the Financial Conduct Authority’s Handbook and combined with best practice material to deliver over 400 Accountability compliance safeguards.
Conduct Rules are the professional standards set by the regulator that
are to be upheld throughout the
Senior manager conduct rules
You must take reasonable steps to ensure that the business of the firm for which you are responsible is controlled effectively
- If the business is operating in high-risk areas, then the degree of control and strength of monitoring should also be high and reporting lines clear.
- Appropriate policies and procedures should be in place for reviewing the competence, knowledge, skills and performance of each individual staff member.
- Action should be taken where required, regardless of the financial performance of the group or individual concerned.
- Handover notes are compulsory where there’s a change in personnel, and the risks of using temporary resource should also be considered.
You must take reasonable steps to ensure that the business of the firm for which you are responsible complies with the relevant requirements and standards of the regulatory system
- Procedures should be in place with well-defined steps for compliance and actual or suspected breaches must be dealt with in a timely and appropriate manner.
- An adequate investigation should be carried out using expert opinion or legal advice where necessary with any recommendations implemented.
You must take reasonable steps to ensure that any delegation of your responsibilities is to an appropriate person overseen effectively
- There should be reasonable grounds for believing that the delegate has the competence, knowledge, skill and time to deal with the issue.
- The larger and more complex the business, the greater the need for clear and effective delegation which may also involve documentation.
You must disclose appropriately any information of which the FCA or PRA would reasonably expect notice
- A Senior Manager should have access to greater amounts of relevant information, along with the expertise to recognise whether the regulator should be informed.
Individual conduct rules
You must act with integrity
- This means not misleading clients, firms or regulators; falsifying or destroying documents; altering prices or mismarking values; recommending unsuitable products; or breaching the regulations themselves.
You must act with due skill, care and diligence
- This includes failure to give relevant information; recommending unsuitable investments; ignoring risk or liability and inadequate control over assets and payments.
You must be open and co-operative with the regulators
- This includes overseas regulators with jurisdiction over the relevant activity to whom you must communicate the issue promptly and in accordance with internal procedures.
- Also, be sure to identify other certified personnel involved, attend interviews and provide documentation as required.
You must pay due regard to the interests of customers and treat them fairly
- Individuals should consider how their actions can affect the interests of customers and the Handbook provides examples of this.
You must observe proper standards of market conduct
- This refers to compliance with market codes and exchange rules and breaches would include something like LIBOR manipulation.
Conduct rules for NED’s
In the banking and insurance sectors the main new requirement is that standard Non Executive Directors (NED’s) will be subject to the five Individual Conduct Rules set out above, along with Senior Manager Conduct Rule 4. Senior Manager Conduct Rules 1, 2 and 3 do not apply to a standard NED unless (in addition to their role as a standard NED) they also hold a senior management function.
Conduct rule exemptions
Not everyone in the organisation is subject to abide by these Conduct Rules and there is an exhaustive list in the Handbook of those who do not. Individuals who are subject to conduct rules and don’t maintain standards or cease to be fit and proper risk withdrawal of approval, fines and other sanctions.
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