A closer look at the Conduct Rules
Individual Conduct Rules – Applicable to all staff
Rule 1: You must act with integrity
Are you aware of the regulators latest views on Conduct Risk?
Are you sure your view of integrity is the same as that of the market and of those who police the market?
Rule 2: You must act with due skill, care and diligence
Do you understand your roles and responsibilities properly?
Have you been adequately trained to do your job?
Do you take time to stay up-to-date and to educate yourself on market changes?
Do you have any recognised qualifications in relation to your role?
Rule 3: You must be open and cooperative with FCA, PRA and other regulators
Rule 4: You must pay due regard to the interests of customers and treat them fairly
In the wholesale markets are you aware of the latest MiFID suitability and appropriateness rules?
Do you view your customers as business partners or as victims to fleece?
Rule 5: You must observe proper standards of market conduct
Are you aware of the latest Conduct Risk views, Market Abuse Directive, etc
SMR Conduct Rules – Applicable to Senior Managers
Rule 1: You must take reasonable step to ensure that the business of the firm for which you are responsible is controlled effectively
Are the processes for the business you manage accurately mapped out, including processes with other entities within your firm and with third-parties
Are there documented controls for those processes and are the regularly tested?
Are the processes and controls understood and adhered to?
Are your personnel adequately skillful, knowledgeable and trained to do their jobs?
Rule 2: You must take reasonable steps to ensure that the business of the firm for which you are responsible complies with relevant requirements and standards of the regulatory system
Do you have a regulatory rules map for the business(es) you manage which shows the laws and regulations that business must adhere to?
Do you have controls in place to ensure compliance?
Rule 3: You must take reasonable steps to ensure that any delegation of your responsibilities is to an appropriate person and that you oversee the discharge of the delegated responsibility effectively
Are delegated responsibilities properly documented and roles and responsibilities fully understood?
Are the staff you delegate to adequately skillful, knowledgeable and trained to do their jobs?
Rule 4: You must disclose appropriately any information of which the FCA or PRA would reasonably expect notice so appropriate action can be taken
Are you aware of regulatory breaches and SMCR conduct breaches when they arise?
Do you have adequate processes in place to manage, report on and remedy breaches when they occur?
Are you aware of weaknesses in your control framework which
might lead to breaches and do you have a programme of action in place to fix those weaknesses?
Do you have an effective process to action areas of concern highlighted by your firms’ Risk and Control Self Assessment (RCSA) process?
Do you have a proactive approach to informing the regulator in respect of the above?