Global Trustee and Fiduciary Services News and Views Issue 50

Prime, Futures and Securities Services | XXXXXX 36 On the same day, the FCA published Policy Statement PS18/16 (The Duty of Responsibility for insurers and FCA solo-regulated firms). 7 This specifies that the FCA can take action against a senior manager where it can be shown that: • There was misconduct by the Senior Manager’s firm. • At the time of the misconduct or during any part of it, the Senior Manager was responsible for the management of any of the firm’s activities in relation to which the misconduct occurred. • And the Senior Manager did not take such steps as a person in their position could reasonably have been expected to take to avoid the misconduct occurring or continuing. The burden of proof for all these elements lies on the FCA. For asset managers who want to understand more on what the FCA will take into account when determining what steps it considers a person in the relevant Senior Manager’s position could reasonably have taken, the regulator points to the guidance in its Decision Procedure and Penalties Manual (DEPP). The guidance also already states that, in establishing what those responsibilities were, the FCA will take into account, beyond statements of responsibility and organisational charts, how the relevant firm operated and how responsibilities were allocated in practice. The guidance already provides, in DEPP 6.2.9-E10, a lengthy and expressly non-exhaustive list of considerations they will take into account in assessing whether a Senior Manager’s actions were reasonable in all the circumstances. 8 To assist firms in their implementation, the FCA also published “SM&CR: Guide for FCA solo- regulated firms”. 9 The guide is a summary of the FCA’s rules and guidance on the SM&CR. It provides an overview of how the SM&CR works, what firms need to do under the new regime, and how the FCA will move firms and individuals from the existing Approved Persons Regime to the new SM&CR. While the guide is not a substitute for reading the relevant Handbook requirements, the FCA has provided cross-references to where firms can find further information wherever possible. It also contains questions and things for firms to consider when applying the SM&CR.