Wheatley: FCA will not go hunting for scalps


The FCA will not use rules designed to increase accountability in banking to “hunt for scalps”, says chief executive Martin Wheatley.

The regulator published its final rules for an accountability framework for individuals working in banks, building societies and credit unions earlier this month.

The framework aims to ensure that senior managers can be held accountable for any misconduct that falls within their area of responsibility.

It includes the senior managers regime, through which the FCA will approve senior figures individually, and the certification regime, where firms must certify that certain staff are fit and proper for their roles on an ongoing basis.

In a speech at the City & Financial conference this week, Wheatley said the regime is designed to be proportionate, and to fit with “the realities of running complex financial services firms”.

He said the FCA has had a lot of pushback from firms on the ‘presumption of responsibility’. This means that where a firm breaches regulatory rules, a senior manager can be found guilty of misconduct unless they can prove they took reasonable steps to avoid the breach.

The FCA is currently consulting on this issue.

Wheatley said: “We will use our enforcement powers proportionately and fairly – including the presumption of responsibility. We will not go hunting for scalps.

“I understand it worries firms that the FCA cannot say ‘if you do X, Y and Z you’ll be fine’; but in the same breath, it is equally true that senior managers are not automatically going to be fined.”

When using the presumption of responsibility, Wheatley said the regulator might ask senior managers to demonstrate they have implemented adequate training, and clearly communicated to staff their responsibilities, for example.

Wheatley added: “Scandals such as FX and Libor remind us of the importance of ensuring that the standards we expect permeate all aspects of industry.

“But these scandals should not be taken out of context. I think we have every reason to be positive about the ability of banks and the industry more generally to prove itself well-equipped to adopt, and adapt to, a regulatory regime that prizes individual accountability highly.”