One of the core purposes of the Certification Regime is to foster high standards of governance, accountability and professionalism. As an organisation established to help raise standards of behaviour and competence in banking, the BSB has spent the last four years working with member firms to help to ensure effective and consistent implementation of the CR, consistent with its core purposes and addressing some practical challenges.
“To make Certification and regulatory references work as they should, the industry has to apply the rules in a consistent and effective way. The regulations set a baseline,but can only be the starting point. To this end, we worked with our members to explore some of the challenges of implementation, and how best to overcome them. In doing so, we wanted to help firms implement the rules in a way that was practical, while ensuring fairness and proportionality to individuals affected. The BSB has since produced four pieces of good practice guidance intended to help firms reference their own policies and procedures against a statement of what ‘good’ looks like. This guidance facilitates the practical application of the rules in a way that respects both the purpose and spirit of the regulation. They show the value of collective efforts to raise standards through the pooling of knowledge and expertise. We hope this guidance will also be of use to the solo-regulated firms that will be included required to implement similar rules later this year,” said Mikael Down, BSB Executive Director of Assessment and Insights.
LISTEN: Jonathan Davidson, Director of Supervision – Retail and Authorisations and Member of the Executive Committee at the Financial Conduct Authority
Charlotte Gerken, Director of Cross-cutting and Insurance Policy, Bank of England said:
“The Senior Managers and Certification Regime exists to promotes the safety and soundness of regulated financial services firms by strengthening the link between seniority and accountability. The Certification Regime and regulatory references in particular have an important role to play in promoting the fitness and propriety of senior individuals. It is important that regulated firms engage with the Senior Managers and Certification Regime as a means of encouraging good practice and not as a compliance exercise. The BSB’s work on the Certification Regime and regulatory references supports firms in coming together to give greater attention to a practical and effective application of these aspects of the Senior Managers and Certification Regime.”
BSB good practice guidance documents reflect a pooling of industry knowledge and experience andarea culmination of two years’ collaborative work with member firms through the BSB’s cross-industry Certification Regime Working Group (CRWG), as well as public consultations.
LISTEN: In the words of CRWG members
Senior Managers and Certification Regime: BSB full suite of good practice guidance:
- Statement of Good Practice 1 on the Certification Regime: Fitness and Propriety Assessment Principles supports firms in their implementation of the Certification Regime by providing a set of high-level principles on the assessment of fitness and propriety. Supporting Guidance to Statement of Good Practice 1 on the Certification Regime: Definitions, Sources of Information and Assessment Record Template provides firms and those assessing fitness and propriety with further information on what each element of fitness and propriety means and how it might be assessed. Both documents incorporate feedback received during a public consultation in 2016, a summary of which is included in the consultation report.
- Supporting Guidance 2: Establishing pass/fail criteria and evidencing the F&P assessment focuses on helping firms to identify and deal with risks and issues that may arise when assessing the F&P of their certified staff. The publication of this final guidance follows a public consultation in 2017. A summary and analysis of the responses we received is included in the consultation report published alongside the final guidance.
- Statement of Good Practice 2 on the Certification Regime: Regulatory References is intended to help firms implement the regulatory requirements effectively and to a high standard. The guidance provides good practice based on three high-level principles: proportionality, fairness and consistency. The publication of this guidance also follows a public consultation in early 2019, a summary of which is included in the consultation report.