One of the most fundamental UK financial services regulatory initiatives of recent years is the Senior Managers Regime. The Senior Managers Regime, in essence, replaces the Approved Persons Regime. In the post-financial crash era, the Parliamentary Committee on Banking Standards was appointed by Parliament to consult, consider and report on the ethics, culture and professional standards of the UK banking sector. The subsequent report that was published by the committee in 2013 gave a damning indictment of the British banking culture and the Approved Persons Regime. The report cited a consistent lack of personal responsibility throughout the industry and suggested that senior figures have continued to shelter behind an accountability “firewall”. It was out of these charges that an evolution in banking regulation occurred and what we now know as the Senior Managers Regime was conceived. Fundamental to the debate on the impact of Brexit on the British financial legal regime is the fact that, unusually, the Senior Managers Certification Regime is entirely distinct from EU law, a fact noted by legal commentators: “the SMCR is a (rare) example of UK regulatory policymaking that does not derive from EU legislation”. As a purely domestic regulatory framework, it stands to reason that the impact of leaving the EU on the Senior Managers Certification Regime (SMCR) will be minimal at most. Whilst it is certainly true that the disruption caused by Brexit on the SMCR will be negligible compared to some elements of Britain’s financial services industry, on a closer analysis of the functioning of the SMCR, it would be erroneous to suggest that the initiative will be left unscathed by the disruption of Brexit.

It is part 4 of the Financial Services (Banking Reform Act) 2013 that effectively establishes the SMCR, amending the Financial Services and Markets Act 2000. There are three key parts to the Senior Managers and Certification Regime: the Senior Managers Regime; the Certification Regime; and the Conduct Rules. The new regulatory framework is established by the Prudential Regulation Authority (PRA) – the Bank of England body responsible for sup