A leading industry compliance expert has warned that the FSA's proposed changes to the approved persons regime may have serious repercussions for financial firms.
The FSA published a consultation paper on the subject before Christmas, aimed at clarifying what the FSA expects of individuals who currently perform a 'significant influence' function at a regulated firm.
Bill Warren, managing director of Bill Warren Compliance LLP, suggested the FSA has been concerned for some time by the number of individuals with significant influence at firms who have, up until now, been able to avoid the FSA rules with regard to approved persons.
Warren warned this will have serious implications, particularly for this firms with senior managers that are not currently approved persons.
He said: "Consultation Paper 08/25 is the FSA's solution to address this 'gap' by requiring individuals who have significant influence at the regulated firm to become approved persons. The upshot of this is that it makes these people personally accountable for their actions alongside the directors and managers running the firm on a day-to-day basis."
Warren added the paper will also have a knock on effect for those firms that make use of non-executive directors to help provide guidance, as the paper outlines minimum standards expected of such individuals.
Warren commented: "This paper should be the catalyst for a number of internal reviews at firms including their recruitment process, the appointment of non-executives, as well as other business fundamentals including risk management, T&C, and management and controls."IFAonline
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