Senior management accountability in the banking industry
Following the global financial crisis, regulators have made it clear that responsibility for the culture of a bank sits at the top. Regulatory authorities in many jurisdictions have put forward proposals that make it easier to hold a bank’s senior management accountable for their actions.
With a number of these reforms the focus of attention has not just been on banks that are established in the jurisdiction in question, but also branches.
For example, the UK regulators have implemented a “senior managers and certification regime” that applies to banks, including UK branches of banks from third countries like South Africa, Algeria and Egypt. In particular, the UK Prudential Regulation Authority requires all UK branches of non-EU banks to have at least one individual pre-approved as a Head of Overseas Branch. In addition, where an individual based in a parent or group entity has direct management and/or decision-making responsibility over the branch’s UK-regulated activities and has not delegated it to the Head of Overseas Branch or another senior manager based in the branch, that individual may require pre-approval as a Group Entity Senior Manager of that branch. Importantly, an individual being located outside the UK does not, in itself, mean that he or she cannot be appointed the Group Entity Senior Manager.
Our global comparative guide, Senior management responsibility in banks, has been updated to reflect the ever-changing regulatory environment for senior managers. It sets out the regulatory requirements for senior managers in sixteen jurisdictions, including South Africa. To access the guide please click here.