More senior manager penalties coming, says UK watchdog

The UK Financial Conduct Authority (FCA) has said there are more senior manager penalties to come, in a response to industry criticisms about the paucity of enforcement actions taken under its landmark Senior Managers & Certification Regime (SM&CR).

Some respondents to the regulatorʼs 2023 SM&CR discussion paper (DP 23/3) said enforcement was a “key component” of the regime and there had been too few outcomes against individuals. The threat of enforcement could be a “waning deterrent”, they added.

The FCA hit back at this criticism in its SM&CR review (CP25/21) by repeating a previous argument that the regime was designed to improve firmsʼ culture and was not primarily an enforcement tool. It did, however, emphasise that it has been actively investigating suspected Code of Conduct (COCON) breaches.

“As of July 8, 2025, we have opened 98 investigations [since 2016] into suspected breaches of COCON. These have led to eight financial penalties on individuals, six of those accompanied by prohibitions and not including a number of other penalties we have decided to impose but that are subject or potentially subject to appeal. [Some] 22 of those investigations are ongoing and more such penalties can be expected,” it said in the consultation paper.

COCON is one of the three pillars of SM&CR. Former Barclays chief executive James Staley is the only senior manager to be enforced against under the SM&CR conduct rules, having breached SMCR Conduct Rule 4, which requires senior managers to notify the regulator about anything it might expect to know.

Since 2016, SM&CR has applied to deposit takers.

The regulator has continued to impose sanctions under the Approved Persons Regime — the precursor to the SM&CR —for misconduct that would have been subject to the SM&CR if it had applied at the time of that misconduct. Since 2022, the CMA has imposed 26 sanctions on individuals for such misconduct, it said.

However, data published as part of a Freedom of Information Act (FoIA) response from November 2024, shows FCA enforcement investigations into senior managers has declined in the past few years. In 2024, the regulator opened just one investigation and closed 16 without further action.