FCA’s first action under SMR may undermine rules

Author: Olly Jackson | Published: 17 May 2018

The Financial Conduct Authority’s (FCA) fine of Barclays chief executive James Staley, the first enforcement action taken under the Senior Managers and Certification Regime (SMCR), could blur the lines between integrity and due diligence. This could result in inconsistent decisions and may raise the bar for activity that would have otherwise resulted in dismissal on the grounds of individuals not being fit and proper to perform their role.

Peter Wright, litigation partner at Fox Williams, said the FCA’s final notice is very carefully worded to enable a finding that there is a lack of skill, care and diligence but without any suggestion that there was an integrity breach. "In the future, this decision may make it harder for the regulator to distinguish between integrity and misjudgement," he said.

Harder to distinguish?

Staley was fined £642,430 ($866,400 approximately) for what the FCA said was a breach of his standard of...