Part 2: Financial Services Section 25: Misconduct
This section amends sections 66A and 66B of FSMA to ensure that the FCA and the PRA respectively are able to bring disciplinary proceedings against directors of authorised persons who have breached rules of conduct applying to them.
	It also amends the definition of misconduct applying to senior managers, both in relation to action by the PRA and action by the FCA. Under the existing provisions as currently drafted senior managers of a bank or other relevant authorised person would be guilty of misconduct if there had been a breach of any regulatory requirement in an area for which they were responsible unless they could prove that they had taken reasonable steps to avoid the breach happening. This is amended so that no senior manager will be guilty of misconduct unless the regulators can prove that the senior manager did not take reasonable steps to avoid the breach happening. As amended, this ground of misconduct will also apply to senior managers of all authorised persons, and not just those in banks or other relevant authorised persons.