Controversial plans to include general counsel in the City watchdog’s accountability regime for top executives have been indefinitely postponed due to Brexit.
The Financial Conduct Authority's consultation on including heads of legal in its senior managers regime closed over a year ago. The next step was expected to be a consultation based on responses received to the authority's discussion paper. However, Andrew Bailey, FCA chief executive, now expects the authority to look again at the proposal in its 2019-20 business plan.
The proposal to include the legal function in the regime has been met with overwhelming opposition, including from the Law Society, which warned that it has the potential to put the lawyer in a conflict of interest with their employer, and could affect the lawyer’s ability to provide full and frank advice.
In a the FCA's business plan, published today, Bailey says the authority's priorities 'reflect the high level of resource we need to dedicate to EU withdrawal, given its impact both on our regulation and on the firms we regulate. This inevitably affects the amount of work we can undertake in other areas. As a result, agreeing our 2018/19 priorities has involved particularly rigorous scrutiny and challenge'.
Bailey says firms' culture and governance 'is pivotal to building trust and confidence' in the UK's financial services industry domestically and internationally'. The authority's policy and final rules setting out how the regime will extend to all other firms regulated under the Financial Services and Market Act 2000 will be published this summer.
The authority also expects to take over responsibility of regulating claims management companies from the Ministry of Justice in spring 2019. The watchdog says: 'While CMCs can provide access to justice for consumers who may be unwilling or unable to bring a claim themselves, some firms may not always operate in consumers' best interests.' The authority is developing a 'package of information' setting out the rules and principles that CMCs will have to follow when the FCA takes over.