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Senior Managers Regime: Breaches of Conduct Reporting

16th September 2016

It is now over six months since the Senior Manager’s Regime (SMR) came into play for banks, building societies and other firms that are dual-regulated by the PRA and FCA such as credit unions, large investment banks and branches of foreign banks operating in the UK.

The introduction of the SMR in March saw the UK regulators introduce a range of policy changes with the aim of increasing individual accountability within the banking sector.

SMR: Conduct Rules

Included within the new regime are high-level rules ‘Conduct Rules’ that apply directly to nearly all staff (except from some ancillary staff such as catering staff for example).

Firms that are under the SMR must ensure that their staff who are subject to the rules are:

aware of them; and
how they apply to their jobs.

It should be noted that the Conduct Rules apply for Senior Managers and staff in the Certification Regime from 3rd March 2016, and apply to everyone else a year later, from March 2017.

Reporting Breaches of Conduct

The new regime also requires firms to annually submit data to the regulator on breaches of the FCA Conduct Rules that are linked to disciplinary action by conduct staff, other than Senior Managers.

Reporting of Breaches of Conduct must be reported upon using the FCA’s ‘Form H’, also referred to as Regulatory Report REP008 in the FCA’s GABRIEL reporting system.

Firms under the Senior Manager’s Regime now have from the start of this month until the deadline of 31 October 2016 to complete and submit a Breach of Conduct report in GABRIEL. This is the first deadline for the Breach of Conduct Report and relates to the reporting period of 7th March 2016 to 31st August 2016. Any breaches where disciplinary action has been taken or commenced during this reporting period will need to be included upon the report.

In addition, reporting Breaches of Conduct via GABRIEL is mandatory for most SMR Firms. This is true even if a firm has no incidents to report, a Nil Return for REP008 must still be submitted within GABRIEL. However for Credit Unions there is an exception.

Breach of Conduct Reporting Exception:

Whilst it is mandatory for banks and building societies to submit REP008 (Form H) via the FCA’s GABRIEL system, (including Nil Returns), on the other hand, Credit Unions that have no breaches of conduct within the reporting period do not have to submit a Nil Return via GABRIEL.

Instead, the FCA advises “Credit unions are encouraged to submit Form H (REP008) via the GABRIEL system” however they are also able to complete a paper version of Form H which can be submitted by email or post to the FCA’s Breaches of Conduct Reporting unit within their Authorisation Division.

To view the contents of Form H, take a look at the following FCA Handbook link that shows the form as a paper version.

Regulatory Reporting Support: Help with FCA’s GABRIEL Reporting System

Our firm has extensive regulatory reporting experience, so if your firm would like GABRIEL support or assistance in completing any of your regulatory reports or returns within GABRIEL, we would be happy to help. Please feel free to contact us or email enquiries@compoundgrowth.co.uk.