Interviewer: Nathan, the new Senior Bankers Regime begins in March. What are the biggest impacts going to be?Nathan Willmott: Well if we want to talk about the reverse burden of proof, about statements and responsibility governance maps, a whole range of changes that banks are currently in the process of putting in place, there’s one element that I think is very significant that we’ve not seen much publicity about and that is really the fact that every employee within UK banks will become subject to personal regulatory duties for the first time. So anyone other than those in purely administrative tasks or responsibilities such as secretaries, security guards, everyone else will for the first time have binding conduct rules imposed upon them and if they don’t meet the standards under those conduct rules they can have disciplinary action taken against them. And in addition, and I think perhaps more significantly, any of those individuals can have disciplinary action taken against them personally if they are knowingly concerned in a breach by the bank. So in any situation where the bank is at risk of having breached its regulatory duties, a whole range of individuals will be potentially in the firing line for disciplinary action and I think that will have quite a profound effect on how firms manage their internal investigations, whether individuals are going to feel comfortable participating in the internal reviews or whether they’re going to feel that they need more protections given that they may be susceptible to disciplinary action in way that they couldn’t be today.Interviewer: You mention the controversial reversal of burden of proof. Now [●] is looking at scrapping that for senior managers. Do you think that’s going to have a big impact?Nathan Willmott: Well it’s had a huge amount of publicity but personally I think it’s going to have very little impact. It’s something that people have been very worried about, it sounds draconian reversing the burden of proof. The reality is, under the current regime, it’s in practice a reverse burden of proof. Where a problem occurs in an area of the business that an individual has responsibility for it really is up to that individual to show that they took reasonable steps to ensure that the business was managed effectively and risks were being properly controlled. And so whilst it looks bad and is something that has given a lot of people cause for concern in terms of whether to take up positions, I think the reality is that in practice a reverse burden of proof has been in place for some time.Interviewer: The Prudential Regulation Authorities brought its first enforcement notice within the last year. Do you see that as being the first of many?Nathan Willmott: I’ve seen on many occasions the PRA saying we are not an enforcement regulator and they prefer to have strong relationships with firms rather than to use the enforcement tool but I see them actually getting more and more used to the idea of taking disciplinary action, both against firms and against individuals. It’s clear that whilst in the past they’ve relied on the FCA’s enforcement division to conduct investigations on their behalf and then they adopt the investigation team’s results in order to decide whether or not to take action, my sense is that the PRA hasn’t been particularly comfortable doing that and so I can see them developing their own team, a much more significant team, so that they’re equipped to conduct their own investigations and I think that they will pursue disciplinary cases much much more than you might have expected when the PRA was created. Interviewer: Nathan, just over a year ago now there was the publication of the review by the Treasury of the enforcement process. Do you think that’s going to make some big changes?Nathan Willmott: Yes, that’s right. In December 2014, the Treasury published its review and then over the last year, year or more, there’s been a resounding silence coming out of the Treasury and the regulators as to what changes will be made as a result. It included a range of recommendations on how to make the enforcement process fairer and more transparent. We’ve seen some of those recommendations probably being implemented in a soft way, better communication between enforcement teams and those under investigation in practice, but I think one of the main recommendations in respect of the PRA enforcement process is that they should replace their current committee meetings as a way of resolving disciplinary cases with a formal regulatory decisions committee to mirror the process that’s in place for the FCA. And the messages that we’re hearing is that that’s likely to happen in 2016. As regards the recommendation that there should just be a 30% discount for early settled cases and then that should go to zero if you don’t settle at the earliest possible stage, I very much hope that they ignore that recommendation – I think it’s an important safeguard to have a series of stepped discounts and I very much hope that that will remain in the future. Interviewer: What other big changes can you foresee over the next year?Nathan Willmott: I think that the fact that the FCA became a concurrent competition regulator in the last year will have a big impact in the year ahead. It means that where a financial services firm faces a competition issue where it discovers potential anti-competitive behaviour then it’s going to have to make a proactive notification to the FCA to make them aware of that issue. And quite how the FCA deals with that information will be very interesting. Their enforcement staff who are responsible for competition have made it very clear that they’re on the lookout for a case or a series of cases to bring against financial services firms for anti-competitive behaviour and they’re shopping around at the moment looking for the right sort of case to bring and I think that once they bring that case firms are going to be very wary in the future of how they notify anti-competitive issues and in particular the tension between the duty to go in and tell your regulator and the desire if you’ve been involved in anti-competitive behaviour to get immunity or leniency from confessing at an early stage, and that’s something that firms are really going to have to work out in the year ahead if they face instances of anti-competitive behaviour.Interviewer: Nathan, thank you.