Algo trading and client-dealing functions will fall under the Financial Conduct Authority’s (FCA) certification regime to improve accountability in banking, the regulator has announced.
In a policy statement setting out final rules for its new accountability framework, the FCA said it intends to improve individual accountability for those carrying out wholesale activities, including at high-frequency traders, banks, building societies and some designated investment firms.
Tracey McDermott, acting chief executive of the FCA, said: “Today we made rules that will extend the certification regime to more fully capture people carrying out certain wholesale activities.
“We are determined to embed a culture of personal responsibility within the banking sector. Clear individual accountability should focus minds, drive up standards, and make firms easier to run and to supervise.”
The rules are due to come into force on 7 March 2016, but those holding senior roles in algorithmic trading or client-dealing will have until 7 September 2016 to comply. The rules will extend beyond senior staff on 7 March 2017.
The proposals to increase accountability include regulatory references for candidates applying for senior positions or significant harm functions. Firms will need to ensure they have procedures in place to assess the fitness of candidates to hold these kinds of roles. Additionally, it sets out new basic standards of behaviour for all those covered by the new regime.
The FCA said it will implement a more comprehensive regulatory references framework later this year.