“The market will not be surprised by today’s recommendations. The ambition of the Bank of England was always to broaden the scope of the regulatory framework to cover new asset classes following recent scandals. The Senior Managers Regime is already being implemented within banks and insurance firms and will now play a key role in holding senior executives and non-executive directors of wider financial businesses to account.
FEMR is just one of a number of regulatory drives to improve culture and conduct, and should be welcomed as it provides a framework to better police industry behaviour. However, financial services firms will be keen to avoid another box-ticking compliance exercise. Firms that have already made significant improvements should have little to fear from the report.
Regulation is only effective if appropriate oversight and enforcement is in place. Policing this new regime to reduce the incidence of market misconduct will keep the Bank of England busy”.
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