The Financial Conduct Authority (FCA) should exclude in-house legal teams from its reporting and accountability regime as in-house lawyers could face a conflict of interest with their employers, the Law Society has said.
Responding to an FCA discussion paper on how and why the legal function is captured under the Senior Managers and Certification Regime (DP16/4), Law Society chief executive Catherine Dixon, who resigned this week, said in-house lawyers would be unable to do their job effectively if they were part of the regime.
“Tensions could arise where demands of compliance with the senior managers regime (SMR) collide with their role as legal adviser to the organisation they serve,” she said.
“It could result in the organisation not getting the expert in-house legal advice they need—which is not in the interests of the organisation or the regulatory authority conducting any investigation as it could result in the organisation not doing the right thing or in delays whilst external advice is sought.
