An article by Elly Proudlock, published in Law360, discusses the UK Financial Conduct Authority's senior managers and certification regime that's been in place for a year now and looks ahead to this new era of personal accountability in the financial sector.
A central feature of the SMCR—which currently applies to banks and insurers but is due to be extended to all financial services firms next year—is a new statutory "duty of responsibility." In force since May 2016, the new duty makes those holding a "senior management function" liable to enforcement action if a breach occurs on their watch. While the FCA, like its predecessor, has long declared itself committed to holding members of senior management to account and to pursuing more cases against individuals, establishing personal culpability for oversight failings has historically been an uphill struggle—as illustrated in 2012 by the then FSA's defeat in the case of UBS banker John Pottage. The introduction of the new regime set out to make such hurdles a thing of the past. Read the full article