ACC submitted a letter to the UK Financial Conduct Authority, urging it to exclude the head of the legal function of regulated firms from the Senior Manager's Regime.
WASHINGTON (January 9, 2017) — The Association of Corporate Counsel (ACC), a global legal association representing more than 42,000 in-house counsel employed by over 10,000 organizations in 85 countries, including over 2,200 throughout Europe, submitted a letter to the United Kingdom Financial Conduct Authority (FCA), urging it to exclude the head of the legal function of regulated firms from the Senior Managers Regime (SMR).
ACC argues that incorporating the head of the legal function into the SMR weakens law departments and negatively impacts the relationship between in-house counsel and their business clients. If general counsel are subject to the Senior Manager Conduct Rules, it would affect both the firm's right to exercise legal professional privilege and a lawyer's personal liability. ACC also states that creating a regulatory system where legal is embedded in another department raises greater risks of noncompliance with regulatory standards, according to the letter.
"Rather than sticking a round peg into a square hole by shoehorning the head of legal into the Senior Managers Regime, the FCA should recognize that a strengthened corporate legal function is in their best interests," said Amar Sarwal, ACC vice president and chief legal strategist. "By transforming in-house counsel into gatekeepers, the FCA undermines the very compliance goals it seeks to achieve, goals that are the raison d'etre of the in-house role."
ACC also expressed concern about the international ramifications of integrating legal responsibility in the SMR. ACC notes that this action inhibits the provision of legal advice across international borders within those regulated firms, as well as complicates the structure of the legal function for UK subsidiaries of foreign banks with no UK-based law department.
The ACC letter is available here.
About ACC: The Association of Corporate Counsel (ACC) is a global legal association that promotes the common professional and business interests of in-house counsel who work for corporations, associations and other private-sector organizations through information, education, networking, and advocacy. With more than 42,000 members employed by over 10,000 organizations in 85 countries, ACC connects its members to the people and resources necessary for both personal and professional growth. By in-house counsel, for in-house counsel.® For more information, visit www.acc.com and follow ACC on Twitter: @ACCinhouse.
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