In early November the Financial Conduct Authority (FCA) launched a consultation (CP17/37) on a proposed approach to supervising and enforcing the Senior Managers & Certification Regime (SM&CR) rules for authorised firms’ unregulated activities.
This proposed approach sets out an expectation that firms and their senior managers should consider market codes in determining the ‘proper standard of market conduct’ as part of the SM&CR requirements and obligations (including where the FCA does not have a framework of rules). The FCA proposes the idea to recognise particular industry codes of conduct that set out, in the FCA's view, 'proper standards of market conduct for unregulated markets and activities'. It also seeks views from stakeholders on extending the principle that a firm must observe proper standards of market conduct (Principle for Business 5) to unregulated activities.
Comments on the consultation are due by 5 February 2018.
Moreover, on 26 April 2017 The Bank of England published the new UK Money Markets Code, (click here to view ISLA article), endorsed by the Money Markets Committee of the Bank. The code sets out standards and best practice expected from participants in the deposit, repo and securities lending markets in the UK. This Code is also linked to the Senior Managers Certification Regime which is relevant for financially regulated market participants, because such managers are responsible and accountable for their firm’s market activity. Regulators are likely to consider whether Codes of good practice such as this Code have been followed in assessing the firm’s overall management capabilities. This Code is also relevant for entities based outside the UK that have oversight of businesses in the UK.