Regulation 

FCA bans on the rise amid conduct crack-down

FCA bans on the rise amid conduct crack-down

The financial services watchdog has stepped up the number of people it has banned from the industry as the senior managers regime is set to expand to cover advisers.

In the 12 months to the end of September, the Financial Conduct Authority issued 23 lifetime bans – up 28 per cent from the same period a year earlier, according to City law firm RPC.

The firm warned that as the remit of the watchdog’s senior managers regime expands next year, the industry should expect more exclusions.

The regime, which focuses on the behaviour of individuals, rather than firms, currently only applies to banks but will expand to cover all financial services professionals, including advisers, next year.

Jonathan Cary, partner at RPC, said: "Being banned from the financial services industry is a life changing event – the FCA knows this. In many ways, this is the ultimate sanction."

RPC said the FCA disclosed it had spent £300,000 pursuing a case to ban just one director, incurring more than 4,000 man hours over more than three years, demonstrating the resources it was willing to devote.

Mr Cary said the FCA wanted to send a message that it would not turn a "blind eye" to poor conduct.

Mr Cary said: "While the FCA is optimistic that the senior managers regime will bring about real change in the compliance culture across the financial services industry, we could be set for more rises in prohibition orders once [it] stretches to cover all firms."

The senior manager's regime will cover advisers from 9 December 2019.

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.

By the end of 2019, senior managers at 47,000 financial services firms will be covered by the regime.

The regulator told advisers last month they should start to get ready for the regime and consider to clear out bosses who are no longer fit for a 21st century business.

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