Exact matches only
Search in title
Search in content
Search in posts
Search in pages
Filter by Categories
Blogs
Board Members
Board: no title
Board: non-practitioner members
Board: practitioner members
Consultations
Guidance
Member spotlight
News
Press articles
Press releases
Speeches & panels
Uncategorised

BSB F&P Guidance

Statement of Good Practice 1 — Certification Regime: Assessing fitness and propriety

The new Certification Regime commenced on 7 March 2016. It requires senior managers to attest annually to the ‘fitness and propriety’ (F&P) of individuals who are managing significant risks. These employees, along with almost all employees in a bank or building society, are also required to act in accordance with new Conduct Rules introduced on the same date.

While the new regulation is clear in its requirement that firms assess the F&P of certified individuals, it leaves the detail of how this should be done largely to firms themselves. Given the importance of the new regime to standards of both behaviour and competence across the banking sector, the BSB began in early 2016 to explore with its members the scope for both learning from each other about implementation of the new regime and identifying areas where consistency of approach could be beneficial.

Following these initial discussions, a Certification Regime Working Group (CRWG) drawn from BSB member firms was convened in January 2016 to help to develop a common understanding of the policy and operational issues associated with the Certification regime and to establish good practice guidance and examples.

The CRWG met nine times throughout 2016 and, in June 2016, the BSB launched a three-month public consultation in relation to the draft guidance on assessing fitness and propriety.

The culmination of this work is the publication by the BSB of two documents designed to help firms to use the Certification Regime as a means of raising professional standards. These are:

An analysis of the feedback received during the consultation exercise can be found in the consultation report. The main changes in light of the feedback received during the consultation are:

  • the F&P Assessment Principles document is now the primary Statement of Good Practice, with all other documents acting as Supporting Guidance;
  • the Definitions, Sources of Information and Assessment Record Template have been combined into a single piece of Supporting Guidance;
  • the definition of ‘honesty and integrity’ has been changed
  • the Sources of Information have been changed to provide greater clarity on which sources of information are appropriate for different types of assessment (e.g. annual assessment, new to role assessment) and to provide greater clarity as to when some sources of information are likely to be relevant to the consideration of a person’s fitness and propriety; and
  • the Assessment Record Template has been shortened and simplified.

The work of the Certification Regime Working Group on assessing fitness and propriety continues, and further proposed Statements of Good Practice and Supporting Guidance will be published for consultation during 2017 covering issues such as:

  • identifying and evaluating risks and issues related to Certification i.e. circumstances which, should they materialise, could call into question whether an individual is fit and proper to perform their role;
  • assessing the F&P of individuals working outside the UK or moving to the UK from overseas; and
  • factors to consider when sharing information about Certified individuals when they move between firms (linked to recent requirements for firms to provide ‘regulatory references’).

Senior Managers and Certification Regime

Exploring how the SMCR - and especially Certification - can be implemented in the most effective way across the sector.

The Senior Managers and Certification Regime is a major regulatory change that will affect all banks and building societies. Responding to recommendations by the Parliamentary Commission on Banking Standards, the government and regulators have together developed a comprehensive framework to ensure better accountability and responsibility for behaviour, competence and culture in banks and building societies. The new framework provides an opportunity for the industry to focus on and demonstrate a culture of professionalism. We are working with firms and regulators to facilitate this, including areas where a common approach across firms could support both the objectives of the regime and the skills and development of the people covered by it.

Professionalism

Evaluating whether a more 'professional' approach to banking would improve behaviour and competence across the industry.

The Parliamentary Commission on Banking Standards found that 'banking culture has all too often been characterised by an absence of any sense of collective responsibility to uphold the reputation of the industry', and argued that a greater focus on professionalism could be an answer to this. Working with a leading team at the University of Leeds, we are researching the issues around professionalism in banking. In particular, we are reviewing how professional qualifications are currently used across the sector, and at whether a stronger role for professional bodies, along the lines seen in some other sectors, like medicine or law, would help raise standards. To inform this work and develop a rounded picture of 'professionalism' and what it means in banking, we are surveying banks and building societies, professional bodies and a wide range of other interested groups, including consumer bodies and investors.

Assessments

Providing an honest and impartial assessment to Boards of progress against objectives on behaviour, competence and culture.

The BSB assessment exercise presents Boards with an objective and impartial view of their firm's culture, identifying where things are working well and recommending areas for improvement. It draws on information not only from Boards and senior teams, but also from employees, investors (or members), trade unions, customer groups and other relevant bodies. In doing so, it will provide constructive challenge to each firm individually, while building a collective understanding of common issues across the industry, or sectors within it. We undertook our first annual assessment exercise in 2015 with ten firms (Barclays, Citi, HSBC Bank, Lloyds Banking Group, Metro Bank, Morgan Stanley International, Nationwide, RBS, Santander UK and Standard Chartered). The BSB itself will not publish individual assessment reports - each firm owns its own report - but key themes and messages will be set out in the BSB's annual report, the first of which will be published in Spring 2016. Given that Board engagement is central to the assessment work, only firms that have their headquarters in the UK are eligible for the full assessment exercise. All firms, including branches of firms headquartered overseas, will however be included in a focused membership-wide survey, which will allow each participating firm to benchmark itself against its peer group.

PGRpdiBjbGFzcz0idmlkZW9XcmFwcGVyIj48aWZyYW1lIHdpZHRoPSIxMDAlIiBoZWlnaHQ9IjEwMCUiIHNyYz0iaHR0cHM6Ly9wbGF5ZXIudmltZW8uY29tL3ZpZGVvLzE0OTMwNzE0Mj9hdXRvcGxheT0xP2NvbG9yPWZmZmZmZiZ0aXRsZT0wJmJ5bGluZT0wJnBvcnRyYWl0PTAmYmFkZ2U9MCIgZnJhbWVib3JkZXI9IjAiIGFsbG93ZnVsbHNjcmVlbj0iIj48L2lmcmFtZT48L2Rpdj4=

HAS YOUR BANK FAILED TO RESPOND ADEQUATELY TO A COMPLAINT?

If your bank/building society has not responded adequately, or in time, to a complaint that you have already made, you can register your complaint with the Financial Ombudsman Service. Which offers a guide on consumer rights when taking a complaint to the Financial Ombudsman Service.

ARE YOU SEEKING GUIDANCE ON YOUR FINANCIAL AFFAIRS?

If you have a problem or query relating to your financial affairs, or are seeking personal finance advice or guidance, there is free, impartial information available from the following organisations:

ARE YOU CONCERNED ABOUT ACTIVITIES CONDUCTED IN YOUR INDUSTRY?

If you work in the financial services industry and are concerned about any activities conducted by your employer or any other firm or individual, you may find the Financial Conduct Authority and the Prudential Regulation Authority's guidelines on whistleblowing helpful. It explains what constitutes whistleblowing, and what procedures are in place to respond to blow the whistle and how your anonymity would be protected. Public Concern at Work, the whistleblowing charity, also offers support and advice to individuals and employers about how to report concerns and how to establish whistleblowing frameworks.

ARE YOU SEEKING AN INDEPENDENT FINANCIAL ADVISER?

If you are seeking the services of an independent financial adviser, Unbiased may be able to help, or if you are looking for more general financial guidance, the Money Advice Service may be a useful place to start.