Regulation  

FCA bans reach post-crisis low

FCA bans reach post-crisis low

Only 18 people were banned from working in the financial services industry by the Financial Conduct Authority in the past year – the lowest since the financial crisis.

This is according to data unearthed by City professional services firm RPC, confirmed by the FCA. The law firm also found that bans are also down from the 25 people who received prohibition orders in 2015/16.

Prohibition orders peaked at more than 70 a year during the financial crisis and its immediate aftermath.

Article continues after advert

Richard Burger, a partner at RPC, said the FCA’s approach of punishing individuals rather than institutions – which it calls constructive deterrence – seemed to be paying off.

He said: "The sector should not mistake the fall in prohibition orders as the FCA starting to go soft; the regulator will not hesitate to ban individuals if it uncovers misconduct.

"The FCA has made it clear that senior individuals are now responsible for misconduct in their firms, and it looks like the loud voicing of that threat is now paying dividends.

"The FCA will hope to see a far-reaching change in behaviour in the financial services sector as the senior managers and certification regime extends across all parts of the sector next year."

Earlier this year the FCA published plans for how the senior managers regime will be extended to the whole of the financial services sector.

The regulator has not yet set a date for when the rules will commence but it expects to publish final rules next year following a consultation which started in July.

Under the regime, anyone who holds a senior management function at an advice firm will need to be approved by the FCA and every senior manager will need to fill out a statement of responsibilities explaining what they are responsible for.

This will need to be approved by the FCA when it is first filled out and when there are changes to it.

The regime sets out a series of “prescribed responsibilities” which firms will need to give their senior managers, but these will not apply to some firms – including sole traders of firms – and larger firms will have more responsibilities.

damian.fantato@ft.com