The FCA and the PRA have published final rules designed to ramp-up management accountability in the banking sector.
The rules cover banks, building societies and PRA-designated investment firms, and come after a clampdown on bonuses announced last month.
The new rules encompass the senior managers regime, the new conduct rules and the certification regime, which remains open to a consultation on a potential expansion to other wholesale employees such as traders.
In publishing the rules, the regulators are calling on firms to commence preparation for the new regime, with individuals carrying out senior management functions required to be pre-registered.
Firms will also be legally required to ensure they have procedures in place to assess the fitness and propriety of senior individuals before applying for approval and at least annually afterwards.
In addition, while staff falling under the certification regime, who could pose a risk of significant harm to a firm or customers, will not need to be pre-registered, the regulators will demand firms put in place procedures to assess their fitness and propriety.
Staff subject to the senior managers or certification regimes will also fall under the conduct rules from March 2016, while firms will have an extra 12 months to prepare for the wider application of the conduct rules to other staff.
The conduct rules set out a basic standard for behaviour that all those covered by the new regimes will be expected meet.
FCA chief executive Martin Wheatley says: “Today we have given clarity on rules that will embed personal accountability into the culture of The City. New conduct rules will add further momentum to improving standards across the industry.”
The publication marks the culmination of a two year process launched by legislation in the 2013 Banking Reform Act, which laid the groundwork for replacing the approved persons regime.