Personal Accountability Solution (PAS)

Automated software that guides you through Individual Accountability Regime (IAR) step by step – helping you deliver a comprehensive compliance assessment on demand, with inbuilt processes that keep it up to date.

The Challenge

The Individual Accountability Regime, which clarifies the way that regulators hold senior executives of banks and other financial institutions to account, will be implemented by the Financial Conduct Authority and Prudential Regulatory Authority on 7 March 2016. The regime sets out how individuals working at all levels in banking are held to account over appropriate standards of conduct. Directors and chairs of board committees will be personally accountable for all actions within their institution in functional areas for which they have signed up to as being the responsible executive, as well as answerable for their decisions and impact caused. Directors and senior executives will need to demonstrate an increased understanding of key business.

“Today we have given clarity on rules that will embed personal accountability into the culture of The City. New conduct rules will add further momentum to improving standards across the industry.”
Martin Wheatley, Financial Conduct Authority chief executive

Individual Accountability Regime (IAR) Summary

As part of the overall Individual Accountability Regime (IAR) Individuals performing Senior Management Functions (SMFs) will require pre-approval by regulators. Also included is a Certification Regime where individuals are certified as “fit and proper” for their roles by the business. They also require an annual re-assessment against a new set of Conduct Rules. An FCA jurisdiction is proposed to apply to all individuals in regulated firms carrying out financial services related functions. Breaches of conduct rules must also be reported to regulators. As part of the new regulation organisations will be required provide evidence of the above to the regulators upon request.

Senior Managers key functions and responsibilities must be defined and approved by regulators
Firms must also provide an overall Management Responsibilities Map – “a single, up-to-date document setting out management and governance arrangements.
Individuals below senior manager level but who perform “significant harm” functions must be certified by firms as “fit and proper” for their roles
Annual re-assessment
Within FCA jurisdiction proposed to apply All individuals in regulated firms carrying out financial services related functions.
Firms must ensure that individuals understand and comply with conduct rules
Breaches of conduct rules must be reported to regulators.

Key Issues for Senior Managers

• Changes increase the likelihood of the FCA being able to take public disciplinary action across a broader range of individuals.

• Regulators will be making increased public information available on the regulatory history of senior.

• Regulators will be able to make approvals conditional or time-limited or even vary them on their own initiative.

• Senior Managers will have to be able to demonstrate they have taken effective action to prevent failures in areas they are accountable for, or the presumption is that they are guilty of misconduct.

Roles & Responsibilities

Need to understand and acknowledge the updated scope of their accountability; this may require training, regular internal attestation and assessments and how this may result in changes in operating models.

Need to define what “acceptable” compliance looks like and ensure staff understand this. An institution should regularly review and update policies and procedures. They must ensure management and stakeholders read, sign up and collaborate.

Communication must be reviewed and a regime of regular attestation to support the case that all staff are aware of the correct operating model to mitigate unplanned risks arising, supported by ongoing training and testing. Management needs effective risk summaries and reporting. Senior management, internal audit, compliance, legal, company secretaries and risk managers need to be aware of the risks to them and their organisations resulting from their individual decisions.

Our Solution

The Personal Accountability Solution (PAS) solution is automated software that guides you through the new regime step by step – helping you deliver a comprehensive compliance assessment, and keep it up to date. Individuals can see their all their responsibilities in a single, accessible location

• Individuals can see all their responsibilities in a single, accessible location

• Complete allocation of responsibilities across the firm – gaps and changes can be easily identified. Produce a statement of responsibilities.

• Manages the process of assigning responsibilities, fit and proper tests, follow-on actions such as training.

• Enables raising and reporting of breaches.

• Singe point of record to demonstrate effective compliance to regulators.

• Auditable.

• Extensible. We have integrations into enterprise vendors available out of the box (into platforms such as Remedy & Salesforce).

What does Success look like ?

By the time the new regime come into force firms need to have:

• People identified and in post for all SMR roles.

• All SMFs understand their new responsibilities under the regime and what they are accountable for to the regulator.

• All non-ancillary staff within the firm understand their responsibilities under the Certification Regime.

• Any gaps or issues have been identified and plans are in place to address them.

• Both regulators under-stand and have bought into these plans.

 

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