Charlotte Hogg's resignation provides a useful reminder to all employees working in the financial services sector about the importance of providing accurate and complete information when applying for approved person status or approval under the senior managers and certification regimes.
The Bank of England's Code of Conduct requires disclosure of relationships which may, or could be perceived to, lead to a conflict of interest. When seeking the approval of the Parliamentary Treasury Committee to become the Bank of England's new Deputy Governor for Markets and Banking Ms Hogg stated that she was in full compliance with the Bank of England's Code of Conduct. However, Ms Hogg had failed to disclose for four years that her brother held a senior role in the strategy unit at Barclays Investment Bank, despite numerous procedural reminders and opportunities to do so.
Ms Hogg later admitted that she had failed to get her declarations correct and claimed it was an honest mistake. The Treasury Committee's report on the matter was highly critical of Ms Hogg's professional competence, prompting her resignation. Had the Treasury Committee continued to approve her appointment it could have given a defence to individuals regulated by the FCA and PRA to any action taken against them by the regulatory authorities on the grounds of failing to disclose information or make a declaration that may impact on the decision to approve such person as fit and proper. It would also have significantly weakened the certification regime under which organisations need to annually approve the fitness and propriety of staff to carry out significant harm functions.
Filling in a Form A is more than just a tick box exercise, the regulators expect full disclosure of all information relating to an applicant's fitness and propriety. They emphasise that the success of any application could be affected if they find that information has been withheld or they have been given false or misleading facts. Information must be provided to the best of an applicant's knowledge and giving false or misleading information could be a criminal offence under the Financial Services and Markets Act 2000. Accordingly, a high standard of diligence is required to provide accurate and complete information.
The failure to make a declaration of relevant information over a four year period is a breach of this requirement and also calls into question the applicant's competence to be a fit and proper person. If you would like to discuss this further or the impact the senior managers and certification regimes will have on your business please do not hesitate to contact me or one of the team.