In March this year the PRA and the FCA introduced the Senior Managers Regime (‘SMR’) for individuals associated with banks and PRA regulated investment firms (from 2018 the SMR will apply to all UK authorised firms). The regime is designed to increase individual accountability of firms’ senior managers by more clearly setting out the individual areas of responsibility attributable to each senior manager.

Following some pressure from the industry, in September, the FCA published a Discussion Paper (DP 16/4) in which they invite a debate as to whether the legal function should continue to be part of the SMR going forwards. The Discussion Paper sets out a number of arguments which principally concern the perceived threat to the independence of the legal function and the status of legal professional privilege posed by the SMR.