The tri-partite financial services professional bodies’ Alliance is urging regulators and firms to work more closely with professional bodies by closing ‘information loopholes’, to help stop ‘bad apples’ - individuals with poor disciplinary records - from moving from one firm to another, for example those who have been refused a Statement of Professional Standing (SPS).
The Chartered Body Alliance is responding to the Banking Standard Board (BSB) Consultation on Certification and Risk. It has broadly welcomed the proposals for further guidance supporting fitness and propriety assessment of individuals but it has called on the BSB to take specific action and tighten up its proposals in key areas.
The Alliance noted that the BSB guidance has missed two possible sources of information which firms should consider when assessing fitness and propriety; a) whether the individual is in breach of other conduct rules, such as those of their membership body, and b) whether a professional body or regulator has made the decision not to issue an individual’s Statement of Professional Standing (SPS).
Both of these factors may influence a firm’s decision as to whether the individual is ‘fit and proper’. Because of this the Alliance has called on the BSB to expand its guidance on considering “reputational impact” to include a specific reference to any professional body to which the individual belongs, and insert ‘decision taken to not issue an SPS’ into the factors to consider when an issue “could be remediated”.
On communications outside of the firm, the Alliance suggests that the BSB guidance has overlooked a key part of the process. The Alliance suggests that the guidance could be enhanced by advising assessors (and through them, individuals) of the value of sharing results of a “certification decision” with the appropriate professional membership body to “close this information loophole”.
These certification decisions are the annual checks which firms have to make of bankers to prove they are fit and proper to perform their job functions.
The Alliance said: “We would argue that we (professional bodies) have a vested interest if there are concerns about the actions of a member, as this can significantly influence the perception of our wider membership and the profession as a whole.”
Simon Culhane Chartered FCSI and CISI CEO, said: “This consultation from the Banking Standards Board offers a number of opportunities to further enhance the relationship between firms and professional bodies.
“In particular, we recommend that firms (and the BSB) should encourage individuals to hold a relevant and appropriate professional qualification, be a member of a relevant professional body, comply with a professional Code of Conduct and complete relevant, audited CPD (Continuing Professional Development) annually.”