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Changing financial services firms’ behaviour through a duty of care
Journal of Financial Compliance,
3
(1),
67-75
(2019)
Abstract
There have been a number of calls for regulators to impose a new and higher duty of care on regulated firms. These calls are evidence of a continuing mistrust of the financial services industry. The remedy largely rests in the hands of the latter to demonstrate that it is worthy of trust. The new duty of care will not achieve the aims of those that seek a significant improvement in the conduct of the industry. What is sought by all is a change in culture. This paper looks at the practical steps that a regulated firm can take to demonstrate its adherence to both the letter and spirit of financial services regulation and those specifically aimed at addressing cultural change. These actions include firms focusing on their strategy and business model and who, and how, they employ people and operate their processes. This includes the regulatory Senior Managers and Certified Persons Regime. It also includes steps to measure culture and emphasises the importance of avoiding self-deception.
Keywords: culture; duty of care; regulatory compliance; treating customers fairly; senior managers; certified persons; gatekeepers
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Author's Biography
Iris H.-Y. Chiu is Professor of Corporate Law and Financial Regulation at the University College London (UCL) Faculty of Laws. She joined the faculty in September 2009. She is Director of the Centre for Ethics and Law, which provides a platform for research dissemination and stakeholder engagement for centre members. She is also executive editor of the European Business Law Review, series editor of the Macmillan Corporate and Financial Law series and a research member of the European Corporate Governance Institute. She previously taught at the School of Law, King’s College London and the University of Leicester. She was a legislative draftsman and State Counsel at the Attorney-General’s Chambers in Singapore prior to joining academia. She read law at the National University of Singapore and the University of Cambridge. She completed her doctorate at the University of Leicester.
Alan Brener is a teaching fellow at University College London’s (UCL) Law Faculty and recently completed his PhD at the Centre for Commercial Law Studies (CCLS), Queen Mary University of London. Aspects of his research include examining macro prudential policy and UK housing policy. Alan is Deputy Director of the Centre for Ethics and Law at University College London and a council member of The Chartered Institute of Bankers in Scotland. He is also a qualified chartered accountant and member of the Institute of Chartered Accountants in England and Wales and has a LLM from UCL. Prior to starting his PhD, Alan worked for Santander UK and was responsible, at different times, for the compliance and retail legal departments and regulatory policy. Before joining Santander in 2005, from 1996 he headed the compliance departments for the retail banking divisions of NatWest and RBS banks. From 1989 to 1996 Alan was a senior prudential and conduct of business regulator for the insurance and collective investments sectors having previously worked on aspects of public policy at the Department of Trade and Industry. Most recently, prior to starting his PhD, Alan was on secondment from Santander helping to set up the Banking Standards Board with the objective of improving standards of conduct and professionalism within the banking industry.
