The clock is ticking and the 7th March 2017 will soon be with us. This will see a number of conduct requirements introduced to banks and insurers namely:
- All individuals within significant harm functions are required to be certified as fit and proper to continue to perform that function,
- Regulatory referencing will form part of the assessment of potential new staff as fit and proper and;
- All non SM&CR individuals need to aware and trained on the new Conduct Rules.
Fit and Proper
In the majority of firms policies have been designed, and where already existing, reviewed and updated. Processes are in place to produce the certificates and “dry-runs” have been performed ahead of time. Therefore I would urge firms to review the detail of the processes in place. Develop a number of scenarios to assess against the important considerations of whether the individual in your opinion has the honesty, integrity and reputation; competence and capability; and financial soundness to perform their role.
The Regulator has now ensured that responsibility lies with firms to ensure that individuals with a poor track record are identified. This brings with it a number of challenges in demonstrating compliance with the rules, as well as consideration to common law, a desire to avoid discrimination and maintain harmonious employer / employee relationships.
Therefore run through some practical examples; how will you handle an individual challenging a regulatory reference, update the reference records and, if disparate systems or paper records exist, provide references for staff 6 years previous.
Conduct Rules for all other staff
Firms with experience of the implementation of the Conduct Rules for SM&CR staff will have evaluated the training, demonstrating that staff understand the rules and their own responsibilities. This learning can be applied to the wider population. Furthermore, ask how do you measure compliance with the rules and demonstrate that your culture is working in practice?