Who is primarily held accountable under the Senior Management Regime (SMR)?

Under the Senior Management Regime (SMR), senior management functions are primarily held accountable for the effective governance and oversight of their firms. This regime was introduced to enhance accountability and ensure that individuals in key roles are responsible for the actions and decisions made within their organizations.

Senior management is tasked with significant responsibility for establishing a culture of compliance and ensuring that appropriate systems and controls are in place. They are the ones who have the authority to make critical decisions that affect the firm's operations, risk management, and compliance with regulatory obligations. If there are failures or breaches, it is these senior managers who can be held responsible, emphasizing the importance of strong leadership and accountability at the top levels of a firm.

In contrast, while compliance officers and independent auditors play important roles in the governance structure, their responsibilities serve as checks and supports for senior management rather than direct accountability for strategic decisions. The SMR specifically aims to clarify and enforce the accountability of senior management, distinguishing their role from others within the organization.