5th February 2015

BBA: “Licence to Trade” Qualifications and Tougher Codes of Conduct Will Strengthen Trust in Financial Markets

The British Bankers Association has submitted its response to the Bank of England and HMT consultation on the Fair and Effective Markets Review on behalf of the banking industry in the UK.

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BBA: “Licence to Trade” Qualifications and Tougher Codes of Conduct Will Strengthen Trust in Financial Markets

The BBA supports the objectives of the review and sees reform as vital to restore trust and confidence in financial markets and believes it is important for the UK to play a leading role in shaping the global agenda.

As such the BBA submission makes a number of positive proposals for policymakers to consider:

“Licence to trade” qualifications for all in financial markets. The BBA believes that everyone undertaking activity in wholesale FICC markets should be required to pass exams and become professionally qualified. This would not need to be one single qualifications for all markets but policymakers should work with the industry to identify which qualifications should be recognised as giving a “licence to trade”.

Giving “teeth” to codes of conduct. Global principles should be implemented nationally and explicitly endorsed by regulators so that they are given “teeth”. These should then be integrated into company and board mission statements, job descriptions and remuneration policies, with proof of continuing adherence for individuals being required in annual appraisals, promotion requisites or mandatory regular face-to-face training courses.

Expansion of Individual Accountability Regime. The banking industry is implementing the new Senior Managers Regime as recommended by the Parliamentary Commission on Banking Standards. We believe that all non-retail market participants should be subject to either the senior manager or certification requirements as currently being consulted on by the Financial Conduct Authority. This would encourage greater personal responsibility and accountability for across financial markets.

Commenting, BBA Chief Executive Anthony Browne said:

“Restoring trust to financial markets is hugely important to the banking industry in the UK. So we support the Bank of England and the Government in their drive to shape the global regulation of financial markets.

“We want London to once again set the gold standard for fair dealing and integrity in financial markets. That’s why we want to make sure that all traders are professionally qualified, that the many existing codes of conduct are reformed and given teeth and an extension of new rules to increase personal accountability and responsibility of senior managers.

“This is a once in a generation chance to clean up financial markets – we must seize it.”

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