ARTICLE
31 May 2016

UK Senior Manager And Certification Regime Amendments And Extension Final

AO
A&O Shearman

Contributor

A&O Shearman was formed in 2024 via the merger of two historic firms, Allen & Overy and Shearman & Sterling. With nearly 4,000 lawyers globally, we are equally fluent in English law, U.S. law and the laws of the world’s most dynamic markets. This combination creates a new kind of law firm, one built to achieve unparalleled outcomes for our clients on their most complex, multijurisdictional matters – everywhere in the world. A firm that advises at the forefront of the forces changing the current of global business and that is unrivalled in its global strength. Our clients benefit from the collective experience of teams who work with many of the world’s most influential companies and institutions, and have a history of precedent-setting innovations. Together our lawyers advise more than a third of NYSE-listed businesses, a fifth of the NASDAQ and a notable proportion of the London Stock Exchange, the Euronext, Euronext Paris and the Tokyo and Hong Kong Stock Exchanges.
On May 4, 2016, the Bank of England and Financial Services Act 2016 was passed by the UK Parliament. The Act includes amendments to the Senior Manager and Certification Regime and extends the SM&CR to all UK authorized firms.
United Kingdom Finance and Banking

On May 4, 2016, the Bank of England and Financial Services Act 2016 was passed by the UK Parliament. The Act includes amendments to the Senior Manager and Certification Regime and extends the SM&CR to all UK authorized firms. The amendments include removing the presumption of responsibility for a senior manager when a breach of regulatory provisions occurs in the area that he is responsible for, replacing it with a duty of responsibility. For a senior manager to be found guilty of misconduct by one of the UK regulators, the PRA and/or Financial Conduct Authority will need to prove that a senior manager did not take reasonable steps to prevent the contravention by his firm from occurring or continuing. In addition, the UK regulators are granted specific powers to take enforcement action against all non-executive directors of firms for their misconduct. The extension of the SM&CR follows from the recommendations of the Fair and Effective Markets Review, published in June 2015, that the regime should be extended to wholesale participants in the fixed income, currency and commodity markets.

Certain provisions of the Act came into effect immediately. It is not yet known when the extension to all UK authorized firms will occur but the UK regulators have mentioned 2018 in the past. On May 10, 2016, two pieces of secondary legislation in the form of an Order and Regulations brought the revised provisions published in the Bank of England and Financial Services Act 2016 on senior manager misconduct into force.

The Act is available at: http://www.legislation.gov.uk/ukpga/2016/14/pdfs/ukpga_20160014_en.pdf.

HM Treasury's press release is available at: https://www.gov.uk/government/news/bank-of-england-and-financial-services-bill-given-royal-assent and the Bank of England's press release is available at: HM Treasury's press release is available at: https://www.gov.uk/government/news/bank-of-england-and-financial-services-bill-given-royal-assent and the Bank of England's press release is available at: http://www.bankofengland.co.uk/publications/Pages/news/2016/050.aspx.

The Order is available at: http://www.legislation.gov.uk/uksi/2016/568/pdfs/uksi_20160568_en.pdf and the Regulations are available at: The Order is available at: http://www.legislation.gov.uk/uksi/2016/568/pdfs/uksi_20160568_en.pdf and the Regulations are available at: http://www.legislation.gov.uk/uksi/2016/569/pdfs/uksi_20160569_en.pdf.

You may like to view our client note on Implementation Issues Arising from the revised UK SM&CR, available at: http://www.shearman.com/~/media/Files/NewsInsights/Publications/2015/11/Implementation-Issues-Arising-from-the-Revised-UK-Senior-Manager-and-Certification-Regime-FIA-100215.pdf.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Mondaq uses cookies on this website. By using our website you agree to our use of cookies as set out in our Privacy Policy.

Learn More