The Prudential Regulation Authority and Financial Conduct Authority published a joint consultation paper on: (i) the approaches to non-executive directors in banking and certain insurance firms; and (ii) the application of the presumption of responsibility to senior managers in banking firms. The consultation revises the proposed approach of the regulators to NEDs in UK banks, PRA-designated investment firms as well as certain insurance firms, such that only certain specified NEDs are subject to pre-approval and inclusion in the Senior Managers Regime. The specified NEDs would be: (i) chairman; (ii) chair of the risk committee; (iii) chair of the audit committee; (iv) chair of the remuneration committee; (v) chair of the nomination committee; and (vi) senior independent director. This narrows down the scope of the SMR, the new system that aims to better define the lines of responsibility at financial institutions so that senior individuals in banks can be held to account more easily. The paper also consults on a draft PRA supervisory statement, with the aim of clarifying the responsibilities of NEDs that are in scope of the SMR and explaining how the presumption of responsibility will be applied in cases of non-compliance with regulatory requirements. The consultation closes on April 27, 2015.

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The Prudential Regulation Authority and Financial Conduct Authority jointly proposed measures seeking to formalize procedures for whistleblowing in the banking and insurance sectors. The proposals aim to encourage employees to blow the whistle when misconduct is suspected without fear of personal repercussions. The proposed new rules include: (i) ensuring that whistleblowing procedures are in place; (ii) encouraging employers to inform employees that they are able to blow the whistle; and (iii) ensuring that whistleblowers are protected from victimization. The consultation closes on May 22, 2015.

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