Media Briefing Note: More Clarity Needed for Compliance With Senior Managers and Certification Regime, Says Hogan Lovells

LONDON, 7 July 2015 - The Prudential Regulation Authority (PRA) published today further a series of additional materials confirming its approach to the introduction of the new Senior Managers and Certification Regime for UK banks, building societies, credit unions and PRA-designated investment firms. The materials published include:

  • Policy Statement 16/15, which provides the PRA's responses to feedback received in previous consultations on various aspects of the new regime, and which sets out final rules on certain aspects of the regime. Notable content includes confirmation of the PRA's approach to the supervision of the conduct of non-executive directors who fall outside the requirement to be approved as Senior Managers.
  • A final form of Supervisory Statement 28/15, which sets out the PRA's expectations of firms in relation to the new regimes – it explains how, in practice, firms ought to comply with various aspects of the regime.
  • A final form of a Statement of Policy explaining how the PRA will use the power to impose conditions and time limits on an approval to perform a Senior Management Function.

Further publications are expected later this year, from both the PRA and the Financial Conduct Authority (FCA), which will set out the final rules applying to various aspects of the rules.

Michael Thomas, partner in Hogan Lovells' Financial Institutions Group, said:
"Whilst it is helpful to firms to have certainty as to the final rules that the PRA will apply to certain aspects of the new regime, we do not yet have the final, complete suite of rules from the PRA and FCA. Given that these new regimes come into place on 7 March 2016, firms are understandably keen to see exactly what requirements with which they will need to comply. The new regimes will have a serious impact on the governance arrangements of a wide range of UK financial institutions, and firms need to be planning now how they will be affected."

Hogan Lovells recently hosted a Breakfast Seminar on the new regimes. A video recording of the seminar can be found here.


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