The PRA and the FCA published today the consultation paper on the new Senior Managers Regime (SMR) applicable to Non-Executive Directors (NEDs). As announced, the NED roles that will be in scope of the SMR are:
- Chairman;
- Senior Independent Director;
- and the Chairs of the Risk, Audit, Remuneration and Nominations Committees.
The individuals carrying out those functions will be subject to all aspects of the SMR, 'including regulatory pre-approval, the FCA’s and PRA’s new conduct rules and the presumption of responsibility'. The key concept of this approach to regulation of Senior Managers is accountability. It is expected that the new rules will incentivise the 'behaviour modification' of senior executives and staff when conducting the business for which they are responsible.
The Consultation Paper is available here
The Press Release here
