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29 Jan 2016

Are a bank’s in-house lawyers senior managers under the SMR?


The FCA has confirmed that it is to initiate a consultation to clarify the circumstances in which a bank’s in-house lawyer has an “Overall Responsibility” function requiring approval under the Senior Managers Regime.  The uncertainty stems from the breadth of the definition of senior managers in the Banking Reform Act 2013, which embraces anyone managing aspects of the authorised entity’s affairs which might involve a risk of serious consequences for the entity or the business interests of the UK.  “Managing” includes taking a decision or participating in the taking of decisions about how one or more aspects of the entity’s affairs are carried on.

So what of the lawyer?  Is the lawyer a participant in decisions, or simply ancillary to them, providing advice and options to the executive?  Does the lawyer in charge of the legal support in a firm have an “Overall Responsibility” (SMF18) function requiring approval?  What are the implications for legal professional privilege if enforcement is contemplated against a senior in-house lawyer who is a senior manager? 

These questions are highly material to in-house lawyers and the way bank’s should structure their decision-making processes.  Clarity within banks as to the role of their lawyers is imperative.

If you have any questions on this, or if you would like further information on the consultation, then please contact Tony Woodcock or your usual Stephenson Harwood contact.



Tony Woodcock

Tony Woodcock

T:  +44 20 7809 2349 M:  +44 7825 625 903 Email Tony | Vcard Office:  London