The Financial Conduct Authority has banned 23 so-called “bad apples” from working in the industry in the past 12 months, a 28% rise, says RPC, the City-headquartered law firm.
The industry should expect more exclusions by Britain’s financial watchdog as the Senior Managers and Certification Regime (SMCR), which focuses on the behaviour of individuals, rather than firms, will expand to cover all financial services professionals, including advisers, next year.
“Being banned from the financial services industry is a life changing event – the FCA knows this,” Jonathan Cary, partner at RPC, said in the report. “The FCA will be looking to send a message out that it is not turning a blind eye to poor conduct.”
In one case lasting more than three years, the FCA said that it spent 4,777 hours and £300,000 in legal fees to ban just one director.
Cary said the FCA wanted to send a message that it would not turn a “blind eye” to poor conduct.
Mr Cary said: “While the FCA is optimistic that the senior managers regime will bring about real change in the compliance culture across the financial services industry, we could be set for more rises in prohibition orders once [it] stretches to cover all firms.”
Increasing the number of prohibition orders is part of the FCA’s efforts to deter misconduct by individuals. The FCA also believes that punishments aimed at individuals may have a greater impact on improving the overall compliance culture at firms, rather than just issuing fines against the firms themselves.
The senior manager’s regime will cover advisers from 9 December 2019.