Senior management responsibilities under the new regulatory regime
| Published date | 01 March 2000 |
| Pages | 201-209 |
| Date | 01 March 2000 |
| DOI | https://doi.org/10.1108/eb025043 |
| Author | James Bagge |
| Subject Matter | Accounting & finance |
Journal of Financial Regulation and Compliance Volume 8 Number 3
Senior management responsibilities under
the new regulatory regime
James Bagge
Received: 3rd March, 2000
Norton Rose, Kempson House, 35-37 Camomile Street, London EC3A 7AN; tel: +44 (0)20 7444 2679;
e-mail: baggeajs@nortonrose.com
James Bagge is a partner within the
litigation department of Norton Rose.
James specialises in fraud and the regula-
tion of investment and banking business,
in particular all forms of investigations,
statutory or private, and associated legal
proceedings involving the SFO, the DTI,
the SRO and Revenue authorities. He has
advised the corporate victims of fraud on
investigation and recovery strategies and
clients who are themselves the subject of
disciplinary proceedings by regulators. He
also advises regulatory bodies on their
investigations.
He began his legal career practising
at the Criminal Bar, before being
seconded to the Serious Fraud Office for
two years where he was involved in the
prosecution of Guinness and the investiga-
tion of Barlow Clowes. James joined
Norton Rose in 1990 and became a partner
in 1993.
INTRODUCTION
The Financial Services Authority (FSA)
issued in July 1999 draft Statements of
Principle and Code of Practice for
Approved Persons1 in preparation for the
new regulatory regime to be introduced
under the proposed new Financial Services
and Markets Act. In December it issued
draft rules and guidance relating to
firms'
systems and controls and responsi-
bilities of senior managers.2 This paper
summarises the proposed new regime
and highlights some of the main issues
that will arise for employees of regulated
firms, and particularly for senior managers.
It goes on to discuss senior managers'
powers to delegate their functions and
lessons learned from the courts on that
issue.
STATEMENTS OF PRINCIPLE FOR
APPROVED PERSONS
Although Statements of Principle already
apply to 'registered' individuals under the
current SRO rules3 for investment firms,
this is a completely new layer of regulation
for individuals in banks, building societies,
general insurance companies and, to an
extent, Lloyd's underwriting agencies. It is
also the first time for everyone that a Code
of Practice has been designed to apply
directly to specified individuals.
The seven new principles will apply
directly to the following categories of
employees of authorised firms:
— senior managers who exert significant
influence over the conduct of a firm's
affairs in relation to regulated activities
— individuals who deal directly with
customers, and
— individuals who deal with customers'
property.
Journal of Financial Regulation
and Compliance, Vol. 8, No. 3,
2000, pp. 201-209
© Henry Stewart Publications,
1358-1988
Page 201
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