UK to introduce new senior banker vetting rules from March 2016

(Adds detail, background)

By Huw Jones

LONDON, March 3 (Reuters) - Britain's new rules for vetting and making senior bankers directly accountable for their actions will take effect from March next year, financial services minister Andrea Leadsom said on Tuesday.

The new rules, that aim to make it easier for regulators to punish bankers for irresponsible decisions, were called for by lawmakers after few bankers were brought to book despite the fact that several banks had to be bailed out by taxpayers in the 2007-09 financial crisis.

"In order to facilitate an orderly transition from the existing approved persons regime, firms will be required to notify the regulators by 8 February 2016 of the approved persons who are to be senior managers under the Senior Managers' Regime," Leadsom said in a statement.

The new rules will be extended to UK branches of foreign banks on March 7, 2016, Leadsom said, adding that regulators would soon start a public consultation on how to do that "in an appropriate and proportionate" way.

A new criminal offence of reckless misconduct, or causing a UK lender to fail, will also take effect in March next year, she said. Offenders could face up to seven years in prison.

"A key part of our long-term economic plan is to restore trust in Britain's banking sector so that it works much better for customers and businesses," Leadsom said.

"We are determined to make sure that all banks in Britain operate with the highest standards."

The senior persons regime will apply to bankers in key positions, such as heads of trading desks, executives, and non-executives that head key committees.

Those designated a senior person will have to be vetted by the Financial Conduct Authority or the Bank of England's Prudential Regulation Authority. (Reporting by Huw Jones; Editing by Matt Scuffham and Robin Pomeroy)