Tens of thousands of financial workers could be exempt from post-crisis rules as the UK government pushes ahead with plans to make the City of London more competitive.
The government has vowed to overhaul an old system known as the Senior Management and Certification Scheme as part of Edinburgh reforms designed to free the city from overly burdensome post-Brexit regulations.
The Treasury Department has reiterated its commitment to reform, even as the recent failures of Credit Suisse and a handful of US banks have sparked renewed scrutiny of financial sector risks.
A person familiar with the Treasury Department’s thinking told the Financial Times that the accountability review could exclude tens of thousands of people from a government that currently covers about 190,000 people.
The UK believes this will make it more competitive compared to other financial centers where accountability programs cover a smaller proportion of the workforce.
The UK administration may also give individuals “more credit” for their international experience when assessing their suitability for similar roles in the UK, the person added, adding that German regulators He gave an example of a trader who was already approved and wanted to play a similar role. in London.
The Treasury Department hopes that both measures will address the concerns of financial industry bosses. This is because it takes
City Minister Andrew Griffiths told the Financial Times: “But we want to ensure that it is used proportionally to avoid unintended consequences such as delaying the recruitment of the best talent around the world.”
The Ministry of Finance hinted at the idea ask for evidence this week. We asked companies for their views on how the SMCR would affect UK competitiveness and for suggestions of ‘other schemes’ the government could learn from.
The Bank of England and the Financial Conduct Authority separately announced last week document This indicates that the British regime was more extensive than those in force in other jurisdictions such as Singapore, Australia, Malaysia and Ireland.
Richard Berger, a partner at law firm Wilmer Hale, said the industry would “very welcome” the rollback. They also have to nominate for prior review by regulators under a senior management system of approximately 68,000 people whose decisions have a material impact on the company’s risk.
“Looking at other jurisdictions . This could ease the FCA’s bottleneck, which has been criticized for slow approval of applications, he added.
Still, Simon Morris, a financial services partner at the law firm CMS, said the lack of prosecution under the current model “shows that companies and their managers are doing things right, so it’s important to keep the administration down from the lower levels.” Eliminating the staff of the company would be “obsolete”, he said. ”.
“Comparisons with other countries aren’t always helpful,” Morris added. “Few other countries have such a disproportionately large and important financial sector, and it is worth remembering where banks are currently collapsing. should not be compromised for political gain.”
The Treasury Department’s evidence request will continue until June 1, as it does for other industries. consultation It is run by the FCA and the Bank of England.
