SIB and SFA consult on the regulatory responsibilities of senior management of firms doing investment business

Abstract

In September 1996 the Securities and Futures Authority (SFA), the self‐regulatory organisation with responsibility under the Financial Services Act 1986 for much of the brokerage and dealing sectors of the financial markets, published a provocative and somewhat controversial consultation document containing proposals to amend its rules governing the responsibilities of senior executive officers. This initiative from the SFA was triggered by the collapse of the Barings group which, with the wisdom of hindsight, was seen to be attributable as much to a lack of quality, effective internal controls and management systems as to Nick Leeson's deception. Hence, the SFA broke new ground in its proposals to include in its rules specific expectations of a firm's senior executive officers as to general management controls and structures within a regulated firm and a particularly controversial proposal to reverse the burden of proof in regulatory disciplinary proceedings against such officers where the firm has suffered a serious financial or reputational damage where SFA suspects that management failure has been a cause or contributing factor.

Citation

Gray, J. (1998), "SIB and SFA consult on the regulatory responsibilities of senior management of firms doing investment business", Journal of Financial Regulation and Compliance, Vol. 6 No. 1, pp. 80-83. https://doi.org/10.1108/eb024960