Key takeaways

• The UK Financial Conduct Authority has issued its first consultation paper on extending the Senior Managers and Certification Regime (SMCR) to almost all of the UK’s 50,000 regulated financial services firms and their employees. It is anticipated that final rules will be published in summer 2018 and firms should expect to have to implement these by the end of next year.
• This represents an important step in the FCA’s continuing drive to promote individual responsibility, improve senior management accountability and facilitate cultural change across the financial services industry. Senior executives and directors will be the most affected by the new regime.
• Firms should start preparing as soon as possible, as they are likely to encounter significant challenges in applying the new rules to their businesses. Implementing the SMCR will place a substantial burden on many firms across management, the front office, and the Legal, Human Resources and Compliance departments.