In this policy statement, we set out our amendments to the Decision Procedure and Penalties Manual (DEPP) and the Enforcement Guide (EG), to give guidance on how we will enforce the new accountability regime (including the Senior Managers Regime and the Certification Regime), and use the new powers created by the Financial Services (Banking Reform) Act 2013 (the Banking Reform Act).
In CP14/13 in July 2014, we consulted on, amongst other things, guidance on how we would bring enforcement action against individuals under the new accountability regime, including under the Conduct Rules. This paper sets out our feedback to the responses on our proposed amendments to DEPP and EG set out in CP14/13, and our final amendments to DEPP and EG. We and the PRA published final rules relating to the new accountability regime in CP15/22.
This paper also explains that we will enforce the Conduct Rules proportionately. When considering whether to take enforcement action against an individual, we will take account of their position and responsibilities. When enforcing the Conduct Rules, we will follow our deterrence-based strategy: we will take effective and robust enforcement action across a wide range of firms and individuals, so that people believe that they will be held to account where they are at fault and subject to meaningful sanctions.
This policy statement will be relevant to:
The new regime will affect a large number of individuals at these firms. It may also be of interest to Solvency II firms and Non-Directive firms. Staff at these firms approved by us or the PRA will be subject to the Conduct Rules.
The guidance in DEPP and EG will apply from 7 March 2016.
Senior Managers will be subject to the criminal offence relating to a decision that causes a financial institution to fail for conduct that takes place on or after 7 March 2016.
Individuals subject to either the Senior Managers Regime or the Certification Regime will be subject to the Conduct Rules from 7 March 2016. The Conduct Rules will apply to other staff at relevant firms from 7 March 2017. Firms will need to make sure that their staff are aware of and understand the Conduct Rules before they come into force.
The Approved Persons Regime for Solvency II firms and Non-Directive firms will apply from 7 March 2016.
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