HM Treasury has announced plans to extend the Senior Managers’ and Certification Regime (established in the wake of the financial crisis Libor-rigging banking controversy) to all financial services firms. The Treasury has also revised the original controversial measures that imposed a ‘presumption of responsibility’ on senior managers, who will instead be under a statutory ‘duty of responsibility’ to take reasonable steps to prevent regulatory breaches by the firms in which they work.
By extending the Regime in this way, many more firms are brought into the remit of political and regulatory intentions to generate a culture of personal responsibility throughout the financial services industry. The drive for personal responsibility for senior managers is combined with measures aimed at conduct more broadly and will be supported, of course, by refreshed enforcement powers for the regulators. The first phase is effective from 7 March 2016 and this extension should come into operation during 2018, bringing over 60,000 businesses and well over 100,000 people into scope.