Lawyers demand further clarity on FCA’s check-up on bankers

Tim Wallace
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FCA chief executive Martin Wheatley (Source: Getty)

Investment banks will have to assess the fitness of their traders to work every year, under rules unveiled by the City watchdog yesterday.

But lawyers fear the guidelines are not yet clear, since the Financial Conduct Authority (FCA) has not decided who counts as a “trader” at a bank.
The certification regime will apply to any staff deemed to pose a serious risk to the firm or its customers.
“We are planning to consult as required on expanding the coverage of the certification regime in the wholesale markets, regardless of whether or not staff are in customer-facing roles or qualify as material risk takers,” said the FCA.
But lawyers are worried this change comes very late in the day. “It is alarming that the FCA has said, for the first time, that it is thinking about a significant extension of the certification regime,” said Celyn Armstrong from law firm Linklaters.
“It is even more alarming that it hasn’t yet made up its mind whether to propose this.”
Meanwhile, the watchdog said foreign banks’ directors could also be affected, as the rules will apply to those with branches in the UK.
The aim is to make sure those banks are subject to the same standards as domestic lenders.
As well as extending the rules to investment bank traders and foreign banks’ directors, the FCA did trim the rules a touch for smaller finance firms.
Less complex firms had com­plained that they posed less of a risk than complicated firms, and should not have to spend as much time and manpower on the rules.
“For smaller firms with less complex business models and governance arrangements, we intend the responsibilities maps they need to create and submit to be correspondingly less complex,” the FCA conceded.

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