This paper sets out amendments to the DEPP to explain how the FCA will enforce the duty of responsibility. Although currently applicable to senior managers in banks, building societies, credit unions and PRA-designated investment firms, the duty of responsibility will apply to Senior Managers at all types of firms when the SMR is extended so may be of interest for further reference.
The duty of responsibility came into force on 10 May 2016 and the FCA consulted on how they would enforce the duty of responsibility in CP16/26. Under the duty of responsibility, the FCA and the PRA can take action against Senior Managers if they are responsible for the management of any activities in their firm in relation to which their firm contravenes a regulatory requirement, and they do not take such steps as a person in their position could reasonably be expected to take to avoid the contravention occurring (or continuing).
The duty of responsibility requires the regulators to prove a contravention of a regulatory requirement by the firm, and that the Senior Manager was responsible for the management of any activities in their firm in relation to which the firm's contravention occurred. The burden of proof lies with the regulators to show that the Senior Manager did not take such steps as a person in their position could reasonably be expected to have taken to avoid the firm's contravention occurring.
The consultation responses and made rules can be found here.
We offer Insurance Firms advice and solutions in Compliance and Risk. From reviews and projects to regulatory authorisation and applications, our consultants are on hand to help you understand, identify and manage your regulatory requirements.
We specialise in delivering a bespoke recruitment service, with particular focus on Compliance, Risk and Audit roles. We offer a range of recruitment solutions covering: Permanent Hire, Contract and Consultancy placements.