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in force: Senior Managers and Certification Regimes

10 March 2016
This week sees the implementation of the Senior Managers and Certification Regimes as well as the Senior Insurance Managers Regime, designed to reform behaviour and promote individual accountability in the banking and insurance sectors.

Much publicity had surrounded the creation of a new criminal offence for bank 'senior managers', relating to decisions that cause a UK bank or building society to fail, punishable with up to seven years’ imprisonment and an unlimited fine. Time will tell how successful a deterrent the new offence is and how readily enforceable it will be. Investigations will certainly be challenging.


The wider reforms will certainly have an impact on the industry. The Senior Manager regimes will require institutions to implement more formal and transparent definitions of managers’ responsibilities and procedures for assessing their fitness for the role. The Certification Regime for banks places the responsibility for assessing the fitness of potential risk-taking employees squarely with the institutions themselves.

The Government has scrapped the controversial 'presumption of responsibility'. However, the move towards greater individual accountability remains with the new 'duty of responsibility' that requires managers to take appropriate steps to avoid a regulatory breach.


New Conduct Rules will reframe the way in which institutions and senior managers are regulated, with their extension to other banking staff due to come into force by March 2017.

With the reforms expected to be rolled out to all FCA regulated institutions over the next two years, their early impacts will watched with interest by the whole industry.

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