By Adrian Brown, David Calligan, Tim Dolan, Tamasin Little  King & Wood Mallesons’ London Office

The Senior Managers and Certification Regime (the “SM&CR”) is the tough new regulatory framework for individuals working in the banking sector, under which the UK regulators seek to increase individual accountability. The SM&CR will apply to UK-based subsidiaries of Hong Kong banks and will also extend, in slightly modified form, to UK branches of Hong Kong banks. Accordingly, Hong Kong banking groups which have UK subsidiaries, UK branches, or a combination of the two, will be affected by the SM&CR.

The need for approval as a Senior Manager under the new regime is based upon an individual’s role in practice, not their job title or location. This means that Hong Kong banking groups with a UK presence must think carefully about who is in scope, and senior individuals located outside the UK cannot assume that these UK reforms do not apply.

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