A Shared Vision: Accountability in the UK and Ireland

Author: Priscilla Gaudoin - Head of Risk & Compliance - published September 2025

Topics: Regulatory Strategy, Regulatory Change, Accountability, SM&CR, SEAR

Regions and Regulators: UK - FCA, PRA. Ireland - Central Bank

"We believe that our proposed reforms will create a framework to facilitate the embedding of cultural change and ensure greater individual accountability." Derville Rowland, Speech on SEAR and Individual Accountability Framework, 2 May 2019

In recent years, the push for greater individual accountability in financial services has become a defining theme in regulatory reform across both the United Kingdom and Ireland. While the UK has been a trailblazer with its long-established Senior Managers and Certification Regime (SM&CR), Ireland has been steadily catching up through the introduction of its own equivalent. The Senior Executive Accountability Regime (SEAR) is a central pillar of the boarder Individual Accountability Framework (IAF).

Accountability in the UK:

The UK has long been at the forefront of holding senior leaders in financial services personally accountable. Since its introduction in 2016 following the financial crisis and various conduct scandals, SM&CR has significantly reshaped how governance and oversight operate within UK financial firms.

Under SM&CR, senior managers must have clearly defined responsibilities, and firms must certify individuals performing key roles as fit and proper on an annual basis. There is also a duty of responsibility that that requires senior managers to take reasonable steps to prevent regulatory breaches in their areas of oversight.

Whilst the regime has become embedded across banking, insurance, and asset management sectors it has remained static. Regulatory authorities, the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA), have continued to assess its effectiveness. Recent consultations focus upon refining SM&CR further to improve responsibility mapping and enhancing the treatment of non-executive directors (NEDs). The Treasury and regulators have sought views on enhancing rules of financial advice and consumer redress, ensuring firms better define senior responsibilities.

These discussions reflect broader questions around regulatory burden, proportionality, and the need to adapt the framework to meet evolving industry structures. With the UK’s most recent consultation, SM&CR reforms are imminent. However, the FCA and PRA are keen to maintain momentum around clarity, consistency, and enforcement.

Accountability in Ireland:

Ireland, although initially behind the curve compared to its UK counterpart, has made significant strides in recent years. The Central Bank of Ireland (CBI) introduced the Individual Accountability Framework Act in March 2023, a landmark piece of legislation designed to enhance accountability and transparency in regulated firms.

This framework includes several key pillars:

1. The Senior Executive Accountability Regime (SEAR)
2. Conduct Standards – common and additional standards for regulated staff
3. Enhancements to the Fitness & Probity Regime
4. A Unified Enforcement Approach – removing the ‘participation link’ to hold individuals to account

These reforms are modelled on SM&CR but adapted to the Irish legal and regulatory context.   SEAR is arguably the most impactful element of the IAF, introducing formal responsibility statements and requiring firms to maintain a detailed management responsibility map.

SEAR: From Consultation to Implementation:

The journey toward SEAR’s implementation began with an extensive consultation process. In March 2023, the CBI launched Consultation Paper 153 (CP153), seeking feedback on its draft regulations and guidance. It focused on SEAR’s scope, the content of Statements of Responsibilities, and the governance obligations it would impose on firms.

Another complementary consultation, CP 154, dealt with proposed changes to the administrative sanctions procedure, particularly in light of the removal of the long-standing participation link, meaning individuals could now be directly sanctioned for breaches without needing to tie their actions to those of the firm.

Following this engagement, the Central Bank published its feedback statements in November 2023 and finalised the SEAR regulations in April 2024. These regulations came into force for executive roles on 1 July 2024, a watershed moment for accountability in Irish financial services.

The initial rollout applies to a limited group of in-scope firms:

• Credit institutions (excluding credit unions)
• Insurance undertakings
• Investment firms with high MiFID authorisation
• Third-country branches of relevant firms operating in Ireland

Each of these institutions must now ensure that all individuals in Pre-Approved Controlled Functions have a Statement of Responsibilities and that the firm maintains a comprehensive Management Responsibilities Map.

Critical Pause:

One of the most debated aspects of SEAR’s introduction was its application to non-executive directors (NEDs) and independent non-executive directors (INEDs). Stakeholders, including legal advisors, compliance professionals, and board members, raised serious concerns during the consultation phase. The crux of their argument was that NEDs, by definition, do not hold executive responsibilities and often have limited access to real-time information. This asymmetry could make them disproportionately vulnerable to enforcement action under SEAR.

Acknowledging these concerns, the Central Bank opted for a 12-month deferral in SEAR’s application to non-executive roles. This meant that SEAR did not apply to NEDs and INEDs until 1 July 2025, giving firms additional time to recalibrate governance structures and provide adequate training and support.

This delay was generally welcomed as a pragmatic move, allowing for a smoother, more proportionate rollout of the regime and addressing fears that talented individuals might shy away from board roles due to perceived regulatory risks.

Already in Force:

Whilst SEAR’s application was phased, other elements of the IAF were already operational.   As of 29 December 2023, the following measures came into effect:

• Common Conduct Standards, applicable to all controlled function (CF) staff, including acting with honesty and integrity, due skill and care, and in the best interests of customers
• Additional Conduct Standards, which apply to senior executives and focus on leadership, oversight and delegation.
• Fitness & Probity Certification, now formalized as an annual requirement for in-scope roles.

These standards establish a consistent cultural foundation across the industry and create a baseline for ethical and professional behaviour that complements the structural changes under SEAR.

What’s next?

The Central Bank has signalled that more is to come. Firms can expect:

• Additional FAQs and implementation guides  
• Detailed instructions on submitting Statements of Responsibilities and Responsibility Maps
• Continued engagement around business conduct standards, particularly under the revised Consumer Protection Code, which is expected to take effect in early 2026.

A Shared Vision:

Although the UK and Ireland have taken different paths towards enhancing accountability, both jurisdictions are converging around a shared vision: placing clear, personal responsibility at the heart of financial regulation.

The UK’s SM&CR remains a touchstone for other countries, but it is also evolving as regulators seek to improve transparency and reduce unnecessary burden. Meanwhile, Ireland is in the midst of its own transformation. With SEAR now in force, the Individual Accountability Framework is reshaping the governance landscape.

For firms operating across both jurisdictions, the message is clear: accountability is no longer a matter of principle, it is a regulatory requirement, with practical, enforceable consequences.

Proactive engagement, careful implementation, and sustained cultural change will be essential to meeting the expectations of regulators, customers and the public.

How Ruleguard helps the Financial Sector:

Ruleguard is an industry-leading GRC software platform designed to help regulated firms manage the burden of evidencing and monitoring compliance. It has a range of tools to help firms fulfil their obligations across the UK, Europe, N America, and APAC regions.

Transform the way your firm manages accountability and compliance.

Ruleguard's Accountability Regime Solution is designed to simplify compliance with various international accountability frameworks, including the UK’s SM&CR, Ireland’s SEAR, Singapore’s IAC, Hong Kong’s MIC, and Australia’s FAR. It supports key requirements like fitness and propriety assessments, certification, MRMs, SORs, and individual conduct breaches.

Ruleguard is a comprehensive solution that lets you protect and propel your business forward through the complex regulatory landscape.

Related Webinars, White Papers and Blogs

Ruleguard hosts regular events on various regulatory topics. You can watch our webinars on-demand at your convenience, or read our blogs, white papers, infographics, and tune in to our podcasts.

• SM&CR: Enhancing Ethics, Accountability & Culture
• From Compliance to Culture: Embedding Accountability
• Senior Managers & Certification Regime: Transforming Culture
• Has SM&CR made a difference?
• How does the implementation of SM&CR impact CASS firms
• Guide to the FCA's Strategy
• Accountability: Satisfying global standards

About the author

In a career spanning 30 years, Priscilla has worked as a consultant, CCO and MLRO providing regulatory oversight and advice to firms across the financial services industry. She is responsible for our thought leadership programme, writing regular articles and white papers, and hosting webinars on a variety of regulatory matters.

She is a Fellow of the International Compliance Association, a certified GRC practitioner, and a member of the Institute of Risk Management.

 

Contact Priscilla