SFA to tackle accountability at senior levels

New rules to be published today by the Securities and Futures Authority will make it easier to discipline senior executives of City firms such as Barings that get into serious trouble.

The proposals were drawn up following widespread criticism earlier this year, when Peter Baring, former chairman of Barings, and Andrew Tuckey, his deputy, escaped prosecution by the SFA for rule breaches.

A key element of the SFA proposals is that if there is a catastrophic failure the burden of proof will be shifted, so that top executives will have to demonstrate that they have properly used all their powers.

At present, the burden is the other way round, because the SFA must prove the executives have failed to do their duty, which is a much harder task. Any shift in the burden of proof is likely to be highly controversial among SFA members.

The SFA's present rule-book says senior executives have ultimate responsibility for compliance with the rules. But the statement is so general it has proved impossible in cases such as Barings to pin down any specific offence on which charges can be brought.

Under the new proposals, which are being circulated for consultation, top executives could be prosecuted by the securities regulator for falling down on a number of more specific management responsibilities, such as ensuring proper control systems are in place.

Nick Durlacher, chairman of the SFA, confirmed that the SFA proposed a change in the burden of proof in the case of catastrophic failures. He said: "It will be up to senior executives to demonstrate that they have discharged all their powers."

The other main thrust of the document will be more detailed guidance on the responsibilities of senior managements.

The new rules are expected to spell out several objectives senior executives must aim for, including the standards by which they manage the business, the quality of internal controls and the adequacy of risk management. The SFA is also expected to change its rules to allow the regulator to say more in public about cases it investigates.

The SFA has has refused to say whether the proposed new rules would have led to prosecutions of Mr Baring and Mr Tuckey.

In the summer, Mr Durlacher said inquiries "did not uncover evidence of wrongdoing by them that would have sustained a prosecution for rule breaches".

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: HR Benefits Manager

£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

Recruitment Genius: Office Manager / Financial Services

£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...

Jemma Gent: Year End Accountant

£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...

Jemma Gent: Management Accountant

£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...

Day In a Page

HIV pill: Scientists hail discovery of 'game-changer' that cuts the risk of infection among gay men by 86%

Scientists hail daily pill that protects against HIV infection

Breakthrough in battle against global scourge – but will the NHS pay for it?
How we must adjust our lifestyles to nature: Welcome to the 'Anthropocene', the human epoch

Time to play God

Welcome to the 'Anthropocene', the human epoch where we may need to redefine nature itself
MacGyver returns, but with a difference: Handyman hero of classic 1980s TV series to be recast as a woman

MacGyver returns, but with a difference

Handyman hero of classic 1980s TV series to be recast as a woman
Tunnel renaissance: Why cities are hiding roads down in the ground

Tunnel renaissance

Why cities are hiding roads underground
'Backstreet Boys - Show 'Em What You're Made Of': An affectionate look at five middle-aged men

Boys to men

The Backstreet Boys might be middle-aged, married and have dodgy knees, but a heartfelt documentary reveals they’re not going gently into pop’s good night
Crufts 2015: Should foreign dogs be allowed to compete?

Crufts 2015

Should foreign dogs be allowed to compete?
10 best projectors

How to make your home cinema more cinematic: 10 best projectors

Want to recreate the big-screen experience in your sitting room? IndyBest sizes up gadgets to form your film-watching
Manchester City 1 Barcelona 2 player ratings: Luis Suarez? Lionel Messi? Joe Hart? Who was the star man?

Manchester City vs Barcelona player ratings

Luis Suarez? Lionel Messi? Joe Hart? Who was the star man at the Etihad?
Arsenal vs Monaco: Monaco - the making of Gunners' manager Arsene Wenger

Monaco: the making of Wenger

Jack Pitt-Brooke speaks to former players and learns the Frenchman’s man-management has always been one of his best skills
Cricket World Cup 2015: Chris Gayle - the West Indies' enigma lives up to his reputation

Chris Gayle: The West Indies' enigma

Some said the game's eternal rebel was washed up. As ever, he proved he writes the scripts by producing a blistering World Cup innings
In Ukraine a dark world of hybrid warfare and murky loyalties prevails

In Ukraine a dark world of hybrid warfare

This war in the shadows has been going on since the fall of Mr Yanukovych
'Birdman' and 'Bullets Over Broadway': Homage or plagiarism?

Homage or plagiarism?

'Birdman' shares much DNA with Woody Allen's 'Bullets Over Broadway'
Broadchurch ends as damp squib not even David Tennant can revive

A damp squib not even David Tennant can revive

Broadchurch, Series 2 finale, review
A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower: inside the mansion of Germany's 'Bishop of Bling'

Inside the mansion of Germany's 'Bishop of Bling'

A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower