UK Regulators Move To Amend UK's Senior Manager & Certification Regime

On September 28, 2016, the PRA and the FCA launched a consultation proposing amendments to the Senior Manager & Certification Regime. Most of the changes result from the legislative changes made in the Bank of England and Financial Services Act 2016. However, the regulators are also proposing some other changes which they consider appropriate having had the opportunity to assess the SM&CR in practice.

Both regulators are consulting on proposed guidance on the so-called "duty of responsibility." The duty of responsibility replaced the presumption of responsibility and allows the regulators to take action against a Senior Manager for misconduct if his/her firm contravenes a regulatory requirement at the time that the Senior Manager was responsible for the management of those aspects of the firm's activities. The regulators will need to show that the Senior Manager did not take reasonable steps to prevent or stop the contravention. The PRA's proposed guidance on what