Jamie Symington, Director of Investigations at the Financial Conduct Authority (FCA), addressed the Legal Week Banking Litigation and Regulation Forum in June 2017. He warned the senior managers of authorised firms that they may be subject to additional scrutiny, by commenting:
“We need an approach to investigation that will meet the challenges of supporting the embedding of the culture [of senior management accountability]. This means that generally where there are grounds for investigating a matter, there will be a need to investigate the role of senior management in the conduct issues that arise.”
Mr Symington acknowledged that this new focus on the conduct of senior managers will inevitably lead to the FCA conducting more investigations than was previously the case.
Mr Symington began by stressing that an FCA investigation is not necessarily a pre-cursor to enforcement action, and that an investigation is simply the regulator’s way of trying to find out what happened in any given situation.
Next, he quoted from the Green report into the collapse of HBOS, and Mr Symington remarked that Andrew Green QC had some hard-hitting things to say about the circumstances in which the FCA should commence an investigation. Green suggested that the regulators had previously only commenced investigations where they already believed they had a reasonable chance of being able to take enforcement action, when instead they should be using the results of their investigation to discover if enforcement action was necessary.
The FCA director then acknowledged that his organisation had certain responsibilities in this regard, commenting:
“We need to state clearly what we expect of firms. We need to improve how markets operate. We must work to prevent harm occurring. And we must help to put things right when they go wrong.”
He also acknowledged that evaluating the degree of harm during an investigation was always going to be a judgement call, and would never be an exact science.
Next came his comments on the responsibilities of senior management to promote the right corporate culture, and to prevent wrongdoing within their firms.
Mr Symington added on this subject:
“As set out in our recent business plan, our foremost cross-sector priority is to improve culture and governance in firms. We see culture change as the key aim of our work on individual accountability which is why the Senior Managers Regime for deposit takers and the forthcoming Senior Managers & Certification Regime for all other firms are key work streams in our Business Plan.”
He concluded by stressing that the FCA remained impartial in all of its investigations, saying that:
“What we do expect, is … to get to the heart of the matter and the truth of what happened as quickly as possible. We will investigate with objectivity and rigour. Our response will be fair and proportionate in all circumstances. So we expect firms to appreciate that is it often also in their best interests that we do get to the heart of the matter quickly and support us in doing so.”
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