In May 2017 the FCA published its final amendments to the Decision Procedure and Penalties
Manual with guidance on the Duty of Responsibility.
This policy statement clarifies the factors that will influence any decision to take action against a senior manager when the rules are broken which creates a significant test for firms and individuals. Action can now be taken against a senior manager where there has been a contravention by the firm, a senior manager was responsible for any of the related activities and reasonable steps were not taken to avoid it.
Although the controversial reversed burden of proof has now been removed, senior managers will need to demonstrate the reasonable steps they took which means having an effective mechanism in place to monitor business-as-usual activities so that anomalies can be picked up.
When a problem is identified, a thorough investigation process should be initiated along with supporting material.
Solvassure. Compliance Technology.