Fitnesss and Competence Managers Guidance October 2016

Transcription

1 Fitnesss and Competence Managers Guidance October 2016 Process Owner Name: Compliance Telephone:

2 FITNESS AND COMPETENCE QUESTIONNAIRE Introduction The new Accountability regime was implemented from March 7 th 2016 to strengthen individual accountability in the banking sector. The new Senior Manager and Certification Regime and Conduct Rules aim to hold individuals working at all levels in banking to appropriate standards of conduct. The aim of the new Regime is to establish a basic standard of behaviour and requires that all employees competence and fitness is assessed on annual basis: Senior Managers and Certified Persons were subject to Conduct Rules from 7 th March There are individual Conduct Rules for both and additional rules for Senior Managers Other employees (except those in ancillary jobs i.e. that are equivalent to those in nonfinancial sector firms such as reception, IT help desk, personal administration) will be covered by the individual Conduct Rules from 7 th March 2017 The Conduct Rules build on the Statements of Principle and Code of Practice for Approved Persons under the old Approved Persons regime. If a Conduct Rule breach occurs of sufficient seriousness SG may no longer be able to certify an individual as fit and proper and competent. The individual could then no longer continue in that job. To comply with these new requirements, we have replaced our existing Compliance F&C form and process with a Fitness and Competence Questionnaire (F&C) which forms part of the Annual Evaluation appraisal process and must be completed within the Evaluation Tool. This is not therefore a new process and by integrating the F&C into our annual appraisal process we aim to: Enforce accountability at all levels by ensuring that our managers take responsibility of the competency, fitness, propriety and conduct assessment Demonstrate personal accountability embedded at all levels of the organisation to the regulator Ensure integration of the new Code of Conduct Provide robust records to demonstrate fitness and competence on an ongoing annual basis. There is an additional requirement to issue a Fitness, Propriety and Competence Certificate for Certified Persons annually: First certificate to be issued to Certified Persons by 7 March 2017 No individual can perform one of those roles without a certificate It should also be highlighted that the new regime is intrinsically linked to our leadership behaviours and is being embedded as part of the appraisal process starting with our objective setting campaign. The behaviours required by the new regime and our internal cultural change initiatives support each other and will continue to be embedded through our appraisal process and ongoing performance management. Fitness & Competence Manager Guidance 20/10/2016 v1.0 Page 2 on 6

3 The purpose of this guidance is to explain the new F&C assessment within the Evaluation Tool and how it is integrated into the annual appraisal process. This guidance covers: How the new form works What the questions in the new Fitness and Competence Questionnaire are looking to achieve Guidance on how questions should be answered What it means to pass the assessment What it could mean to fail the assessment What information manager s need to consider when making F&C decisions Please note that any questions, issues or concerns whilst completing the form should be raised with your dedicated Compliance teams: SGLB: Lon-Registrations-Compliance@sgcib.com Hambros: ukcompliance@sghambros.com How the new form works We have created one consistent approach to cover Approved and Certified Persons and Senior Managers within SGLB (incl. SGSS), LYXOR, Descartes, SGH & NEUKFL from Employees impacted by the wider Code of Conduct will complete the relevant form from The new Fitness and Competence Questionnaire (F&C) is accessed via the Evaluation Tool through a link in the annual appraisal form. There are three different depths of questions depending on whether employees are a Senior Manager Function holder or a SIF, a Certified Person or a CF30, or any other employee who is not ancillary staff. Impacted employees will find the relevant form automatically in the Evaluation Tool. From October 2016, the following employees will be required to complete the appropriate form: Senior Manager Function Holder Significant Influence Function Holder Approved Person Certified Person and from October 2017 those employees impacted by the Wider Code of Conduct will also be required to complete the relevant F&C form. Please note that ancillary staff are not required to complete the F&C process. In the event of there being 2 functions for the same person, the most detailed questionnaire will be completed, for example, if an employee is categorised as both SMF & CP the questionnaire for SMF will be applicable. All employees will need to access and complete the new form during the completion of their annual appraisal form. If employees do not complete the form the appraisal form will not be completed. Fitness & Competence Manager Guidance 20/10/2016 v1.0 Page 3 on 6

4 After completing the F&C form managers must confirm the employee is competent, fit and proper for their role. Managers cannot sign off the appraisal process if the individual has answered any of the F&C questions in a way that raises any concerns. If any questions are raised managers should contact their dedicated Compliance Officer and seek advice. What are the questions looking to achieve The form is comprised of five sections: 1. Roles and Responsibilities 2. Regulatory Competence 3. Business and Technical Competence 4. Policy Adherence 5. Conduct Assessment Within each section there are a series of questions to be answered Yes or No. If any of the questions are answered inappropriately a report is generated and escalated to Compliance. Guidance on how questions should be answered It is imperative that the form is answered truthfully by the employee and the manager and that any concerns or doubts that the manager has about any answers to any of the questions are raised and discussed with their UK dedicated Compliance officer. Managers should discuss with their employees how they completed the form and if there were any answers that they were not sure or had concerns about. Employees should understand the importance of completing this form accurately and that if they do have any concerns about any aspect they should discuss with their manager during this meeting. Roles and responsibilities This section aims to identify if any changes to the individuals role or responsibilities have impacted their fitness and competence to perform their new role. All employees must have an up to date Job Description and if inaccurate or out of date this will need to be rectified in order to answer the question appropriately. For a Senior Management Function Holder, it is imperative that they indicate if their Statement of Responsibility (and where relevant their PRA and FCA prescribed responsibilities and functions) reflects their current responsibilities. Regulatory Competence This section aims to identify if there are any items that may call into question, the employees fitness, propriety or reputation, in accordance with regulatory requirements. The other questions focus on mandatory training, regulatory exams and regulatory registrations. Employees should have attended all the Compliance classroom training sessions they have been invited to this year. Non attendance must be explained. Fitness & Competence Manager Guidance 20/10/2016 v1.0 Page 4 on 6

5 All E-Learning training assigned must be completed by the deadline. If the employee s answer is No, they must state what additional continuing education requirements they need in the comment box. Non completion of mandatory training is a serious issue and line managers must consider whether answering No means that they are not competent from a regulatory perspective and therefore that unable to sign off F&C. Employees must confirm that they have maintained the required Regulatory "fitness and propriety" threshold levels during the period. Senior Managers are screened on an annual basis and Certified Persons every 3 years and any adverse findings will be notified to the manager. If applicable they must declare in the comment box any of the following (whether or not in the United Kingdom): o criminal convictions, o criminal proceedings, o criminal investigations to which they are a party o summons o o arrest whether they have been the subject of: a search, a fine, a county court judgements whether or not satisfied, awards, judgement debts (County Court Judgements), financial claims against them, bankruptcy proceedings, asset sequestration proceedings, outstanding financial obligations, proceedings related to fraud, misfeasance, negligence, wrongful trading whether in the UK or otherwise during the period. Note: Traffic offences do not need to be declared unless they result in a ban in driving or the sanction is in replacement of a prison sentence. Adverse disclosures will not necessarily threaten your certification but the firm is obliged to make a determination in respect of these disclosures. Employees must declare if they are aware of any item that may call into question, their fitness, propriety or reputation, in accordance with regulatory requirements and provide details if applicable in the comment box. If you are unsure, please refer the matter to your Compliance Team as indicated previously. Business and Technical Competence This section aims to confirm that employees have received the necessary information, updates, awareness and training to ensure their business and technical competence. The section also covers systems training, training for people managers and basically all training identified in the individuals Personal Development Plan (PDP). Policy Adherence This section aims to identify if there are any potential policy breaches and employees must confirm that they have: Fitness & Competence Manager Guidance 20/10/2016 v1.0 Page 5 on 6

6 formally made management/ compliance aware of any conflicts of interest obtained pre-approval for all relevant personal dealings that they or any connected persons have made in the year instructed the brokers to send copy contract notes to their Compliance department in accordance with the relevant personal account dealing requirements. Please refer to your the policies in place for your entity to ensure you have appropriately applied them. declared all their Outside Business Interests and Directorships to the firm? Outside business interests: directorships or Board memberships of any private or public limited company; shareholdings of public or private limited company as defined in your entity s policy, interests in partnerships, trusteeship. Conduct Assessment In this section employees must confirm compliance with the individual conduct rules and if they are a Senior Manager also confirm compliance with the additional Conduct Rules for individuals holding a Senior Manager Function or a Significant Influence Function. Any issues or concerns must be recorded in the comment box and discussed with the employee s line manager. Line Manager Assessment and Sign Off At the end of the form there is a detailed assessment and sign off section for line manager s to complete. Ultimately the line manager is required to electronically sign and confirm the following statement: After completing this form and reading the fit and competence guidance and the Conduct Rules, you confirm the employee is competent, fit and proper for their role. You cannot sign off if the individual has answered the above questions in a way that raises any concerns (in that case, contact the dedicated Compliance Officer). What it means if employees are fit and competent If the F&C questionnaire is completed in line with expectations Certified Persons will receive an annual certificate to demonstrate their competency, fitness, propriety and conduct. What it could mean not to be fit and competent If the F&C questionnaire is not completed in line with expectations a line manager cannot sign off the individual s competency, fitness, propriety and conduct. The line manager must escalate to Compliance and discuss outstanding issues and concerned raised through the completion of the form directly with their UK dedicated Compliance. Compliance will discuss concerns with the employee and if necessary Human Resources. It should be noted that if an employee is not fit and competent they cannot undertake a regulated role. Fitness & Competence Manager Guidance 20/10/2016 v1.0 Page 6 on 6