On 15 October, the Treasury issued a policy paper on the new system that will replace the approved persons’ regime. This followed the Fair and Effective Markets Review (FEMR). The policy paper extends the new system to more financial services organisations and also makes a number of significant changes to how the rules will apply to banks and building societies.
The changes include removing the reverse burden of proof in the new Senior Managers Regime. Under the proposed new regime it was up to the individual to prove, to the regulator, that they had taken all reasonable steps to prevent the breach. With the removal of the reverse burden of proof, it is now up to the regulator to prove that the individual had not taken all the reasonable steps to prevent the breach. There are also changes to how the rules apply to non-executive directors and the requirements for reporting breaches to the regulator. Please see the HM Treasury paper for further details on all these changes.
Both the PRA and FCA have also set up webpages dealing with the new senior managers and certification regimes. The new rules will be implemented shortly and it is therefore vital that all Credit Unions are up to date with the latest rules and guidance.
In their latest consultation on the new strengthening accountability regime, the PRA are consulting on (CP36/15) on regulatory references. This consultation can be found by clicking here. The proposals would again represent a major change for many Credit Unions.