EVENT: Personal Liability for Senior Bank Managers: the New Rules
Date: 29th January, 2016 Time: 01:00 pm - 02:30 pm
The new Senior Managers Regime (SMR) that comes into effect in the United Kingdom in March 2016, will make senior managers personally responsible for regulatory breaches in a way that they have never been personally responsible before. Under the new regime, not only will senior managers have clearer and more direct responsiblity for failures in the business lines, of by the staff that they supervise, but they will also be personally responsible for reporting breaches to the regulator.
These issues were the subject of the ABA's first Corporate Members' lunch of 2016, held at the ABA's offices on 29 January. Representatives from 16 Corporate Members were present.
The brefiing was given by:
Francis Kean, Executive Dirctor of Willis Towers Watson, a leading global insurance broker that is seeking ways to help individuals and their banks manage the increased personal liability that senior managers will face under the SMR.
Peter Bibby, a Partner at law firm Brown Rudnick, an international law firm that represents clients from around the world in complex business transactions and high stakes litigation.
Adam Epstein, Partner at law firm Mishcon de Reya, one of the UK's largest independent law firms that prides itself in providing a best in class service to its clients.
The speakers noted that one effect of the new rules wil be to create misalignments between the interests of senior managers and the firms that they work for, if regulators begin investigations into the firm, or even just ask for information.
All three speakers stressed that the introduction of the SMR will result in regulators giving much greater focus to the behaviour of individual managers. The SMR will also make it much easier for regulators to target individiuals when investigating breaches, because the SMR creates much greater clarity about the business areas and staff for which individual senior managers are responsible.
Senior managers will therefore have to consider when they would want seek advice from an independent lawyer (as opposed from their firm's lawyers).
Many firms have Directors and Officers Insurance (D&O) but existing schemes may not be appropriate to cover senior managers under the SMR. Issues that will arise include the circumstances under which senior managers will be able to use D&O policies (for example, would the decision to activate the policy lie only with the company); whether such policies could be used during for pre-enforcement dealings with regulators; the extent to which managers will be able to chose the law firm that would advise/represent them; and whether the insurance would continue after a manager had left the firm.
This corporate lunch was the first in a series that the ABA will be holding for its corporate members during 2016.
Information from Mishcon de Reya ("SMR and Liability Protection for Senior Managers") is attached below. More information on Willis Trowers Watson's services will be available following a product launch planned for mid-February.
Contact details of the three speakers are as follows:
Francis Kean: firstname.lastname@example.org
Peter Bibby: email@example.com
Adam Epstein: firstname.lastname@example.org
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