In this Policy Statement, we set out guidance in the Decision Procedure and Penalties Manual (DEPP) on how we will enforce the ‘duty of responsibility’.
The guidance in DEPP relates to the new accountability regime – the Senior Managers Regime, the Certification Regime, and the Conduct Rules – which came into force in March 2016.
The ‘duty of responsibility’ came into force on 10 May 2016. It applies to persons performing senior management functions at UK banks, building societies, credit unions, Prudential Regulation Authority (PRA)-designated investment firms, and incoming branches of overseas firms (Senior Managers).
Our guidance in DEPP relating to the duty of responsibility will apply from 3 May 2017.
Under the duty of responsibility, we and the PRA can take enforcement 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.
This Policy Statement will be of interest to UK banks, building societies, credit unions, PRA-designated investment firms, and incoming branches of overseas firms, and their Senior Managers.
Consumers may be interested in how our approach sits within our and the PRA’s broader initiative to improve culture and governance in firms.