PRIMER: the Senior Managers Certification Regime

Author: Olly Jackson | Published: 15 Mar 2018

After the financial crisis, regulators looked to cut off the tentacles of bad actors and ensure the most egregious practices, said to be systemic in the sector, were stopped. The Senior Managers Certification Regime (referred to as SMR) aimed to raise standards of governance, increase individual accountability and help restore confidence in the banking sector. One of the UK Financial Conduct Authority’s (FCA) aims was to restore integrity and trust in the sector – something which had fallen to an all-time-low. The regime has placed a lot of responsibility on individuals themselves to ensure that they can demonstrate that they are taking reasonable steps to act responsibly. But has this led to improved conduct?

What changes did SMR make?

The new regime replaced the Approved Persons Regime, largely extending it but putting a far greater emphasis on individual accountability. Regulators were unable to get to people at the very top of financial institutions...