FCA updates on conduct risk priorities

FCA has published a series of new webpages following its annual conduct meetings with the largest firms in the regulated community.

It asks the largest wholesale banks the following 5 conduct questions:

  1. What proactive steps do you take as a firm to identify the conduct risks inherent within your business?
  2. How do you encourage the individuals who work in front, middle, back office, control and support functions to feel and be responsible for managing the conduct of their business?
  3. What support (broadly defined) does the firm put in place to enable those who work for it to improve the conduct of their business or function?
  4. How does the Board and ExCo (or appropriate senior management) gain oversight of the conduct of business within their organisation and, equally importantly, how does the Board or ExCo consider the conduct implications of the strategic decisions that they make?
  5. Has the firm assessed whether there are any other activities that it undertakes that could undermine strategies put in place to improve conduct?

Its meetings this year have focussed on question 1 and found positive progress in firms’ recognition of the importance of conduct risk and FCA has seen the front line taking greater responsibility for managing it. It has also seen banks apply UK standards throughout their international operations.

While the questions, and the meetings, as designed for large wholesale banking operations, FCA recommends all wholesale banking firms consider its conclusions.

It will now move on to discussion on question 2, including a consideration of the impact of technology on conduct risk and its management.


FIN. Team