Firms, in-house lawyers and the legal profession generally will be relieved that the Financial Conduct Authority ("FCA") has decided to exclude firms' Heads of Legal from the requirement to be approved as a Senior Manager under the Senior Managers Regime ("SMR").

The FCA concluded that because so much of a Head of Legal's work relates to legal advice, the laws of legal professional privilege ("privilege") would likely restrict the FCA, in practice, from using its powers over Senior Managers. The benefits that normally result from applying the SMR will be substantially reduced so that any remaining benefits are not sufficient to justify applying it. However, Heads of Legal will continue to have to be certified by firms under the Certification Regime and be subject to the Individual Conduct Rules.

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