On July 12, 2016, Jonathan Davidson, Director of Supervision – retail and authorisations of the U.K. Financial Conduct Authority (FCA), spoke at the 2nd Annual Culture and Conduct Forum for the Financial Services Industry in London. In his remarks, Davidson outlined the FCA’s ambitions for firm culture in the financial service industry; the responsibility of leaders to encourage personal responsibility and impress the value of good culture upon all staff; and the view that a strong culture that builds trust in firms and markets is in the economic self-interest of firms and their shareholders. Davidson also discussed the Senior Managers and Certification Regime that will eventually apply to hedge fund managers and the FCA’s expectations thereof. See “FCA Enforcement Director Emphasizes Responsibilities Under Senior Managers Regime
” (Jun. 2, 2016). This article highlights the elements of Davidson’s remarks most applicable to hedge fund managers with respect to developing an appropriate culture of conduct and compliance. For commentary from Davidson’s colleagues at the FCA on other legal and regulatory issues, see “Focus on Hedge Fund Managers and Market Liquidity May Be Overemphasized, Argues FCA Director
” (Mar. 31, 2016); “FCA Acting Chief Calls for Hedge Fund Managers to Take Greater Responsibility for Implementing MiFID II
” (Feb. 18, 2016); and “Hedge Fund Managers Must Prepare for Benchmark Regulation
” (Feb. 11, 2016).