Fresh batch of bankers to be brought within landmark accountability scheme on Tuesday

Hayley Kirton
Follow Hayley
The next round of City workers will be pulled into the regime on Tuesday (Source: Getty)

Even more bankers are to be brought within the remit of the Senior Managers' and Certification Regime on Tuesday, one year after the first tranche of rules came into force.

Under the Certification Regime, which is designed to increase levels of personal accountability in the financial sector, banks are required to identify any workers who could pose "significant harm" to their clients or the firm itself.

Those affected, such as mortgage advisers and junior investment bankers, will be issued with a certificate from their firm stating they are "fit and proper" to carry out their jobs, and added to the Financial Conduct Authority's (FCA) list of senior managers the regime already applies to. These certificates will need to be updated yearly.

Read more: It's official: This is the deadline if you want to make a PPI complaint

The Sunday Times reported this next branch of the scheme could apply to more than 35,000 staff members.

The Senior Managers' Regime, which focuses on those who hold critical roles at the firms caught by the rules, came into force on 7 March last year.

The Senior Managers' and Certification Regime is due to be extended to other financial sector firms at some point in 2018.

Read more: City watchdog launches consultation over plans to shake up the IPO process

The chief executive of the FCA, Andrew Bailey, has previously said he hopes the regime will prevent any crisis similar to the one in 2008.

"I hope that it would have contributed significantly to creating an environment where people say: 'I won't do the sorts of things that I did do, because I know much more clearly now what the consequences of those actions would be,'" he said last year in an interview with ITV News at Ten.

The FCA has secured a number of sizable fines in recent years for wrongdoings by companies in the financial services sphere. According to figures cited in January, the City watchdog, along with its predecessor the Financial Services Authority, has slapped firms with more than £3bn in penalties over the course of five years.

Read more: HSBC reveals it's being probed over money laundering issues

However, the regulator's director of enforcement and market oversight, Mark Steward, remarked in a speech at the start of this year that the new Senior Managers' rules had pushed the agency to rethink its approach for blockbuster penalties.

"We don't expect senior managers to agree so readily to pay high fines to resolve cases," said Steward. "We expect there will be more contest and more litigation."

Related articles