Professional body calls for cooperation to shame ‘bad apples’
An alliance of three professional financial services’ bodies has called for regulators and firms to cooperate more closely and to share information that will help to prevent “bad apples” from reappearing elsewhere in the industry.
Although the Financial Conduct Authority (FCA) requires financial services practitioners to be “fit and proper” to work in the sector, the Chartered Body Alliance fears a lack of information-sharing could allow individuals not meeting this requirement to slip through the net.
The concern is that such individuals might find it relatively straightforward to reappear at other firms having excised black marks from their employment record.
The Alliance, which is an umbrella organisation made up of the Chartered Insurance Institute, Chartered Institute for Securities & Investment and the Chartered Banker Institute, made its comments in response to a consultation document issued the Banking Standards Board (BSB) this summer.
The BSB is a private-sector watchdog funded by banks and building societies in the UK; while it has no statutory powers, some of the UK’s biggest banks, including Royal Bank of Scotland and HSBC, agree to be bound by its requirements.
Promoting ‘high standards of behaviour and competence’
It describes itself as promoting “high standards of behaviour and competence across the UK banking industry”, but its draft proposals relating to “fitness and propriety” do not make provision for the automatic sharing of professional bodies’ information on individuals.
The Alliance says that the BSB should include details on whether the individual is in breach of other conduct rules, such as those of their membership body, and whether a professional body or regulator has made the decision not to issue an individual’s Statement of Professional Standing (SPS).
Individuals must be ‘fit and proper’
“Both of these factors may influence a firm’s decision as to whether the individual is ‘fit and proper’,” states the Alliance, “and indicate whether remediation of the issue is necessary.”
The Alliance advises the BSB to expand its guidance on considering “reputational impact” to include a specific reference to any professional body to which the individual belongs, and insert “decision taken to not issue an SPS” into the factors to consider when an issue “could be remediated”.
It also urges assessors to share the results of any certification decisions with relevant industry professional bodies, saying “We would argue that we (professional bodies) have a vested interest if there are concerns about the actions of a member, as this can significantly influence the perception of our wider membership and the profession as a whole”.