Banks will be responsible for certifying their own advisers as meeting regulatory standards rather than the Financial Conduct Authority under proposals set out today.
Currently, the approved persons regime requires all consumer facing staff within banks and advisory firms to be approved directly by the FCA as having sufficient qualifications and being a fit and proper person.
A consultation paper from the Prudential Regulation Authority and the FCA is proposing senior staff within banks, building societies, credit unions and large investment banks remain directly authorised, while other staff are simply certified by the firm itself.
All staff would still have to meet the same regulatory requirements.
The move is a result of the Parliamentary Commission Banking Standards report which called for reform to the approved persons regime so firms take more responsibility for the fitness and propriety of staff.
The paper says the certification responsibility on firms will apply to individuals in customer-facing roles which are subject to qualification requirements.
It says: “These are roles where the FCA is concerned about the risk to consumers from staff without proper qualifications, and where the FCA would want to make sure that proper checks that these qualifications had been achieved were completed.
“Ensuring that firms check that such staff are fit and proper will also support the Retail Distribution Review and Mortgage Market Review.”