PRA Chief Appointed New FCA CEO

Bets are in and the wait is over…

Andrew Bailey, CEO of the PRA and Deputy Governor for Prudential Regulation at the Bank of England has been appointed the new Chief Executive of the Financial Conduct Authority (FCA), commencing from July 2016. Bailey is already on the FCA Board and has been engaged with the regulatory issues of the past and the FCA’s future strategy since 2013.

Who’s accountable?

The FCA has highlighted that there is uncertainty about whether individuals in charge of legal functions within firms are subject to approval under the Senior Managers Regime. The FCA has stated that it intends to consult and that “firms that have sought to make decisions in good faith about whether or not approval is needed, on the basis of our published rules and other communications, should not need to change their approach in the interim.”

Legal function roles were not listed in the FCA’s business activities and functions, however it should be noted that it was not excluded – the list was indicative. The regulator is of the view that many firms would need to identify the role as an overall responsibility Senior Management Functions (SMF) when allocating senior management responsibilities if it was not covered by another specific SMF in the firm.

The FCA recognises its communication with the financial industry about specific roles and function areas has not been voiced appropriately and so it is planning a consultation to gain views on the pros and cons of capturing individuals with overall responsibility of a firm’s legal functions.

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