Category: Compliance & AML · Reviewed by Matt Bartlett, Director · Founder · Last reviewed June 2026
The statutory mechanism under which a Senior Manager whose area of responsibility includes a breach by the firm can themselves be subject to enforcement action unless they show they took such steps as a person in their position could reasonably be expected to take to avoid the breach.
The Duty of Responsibility is the statutory basis on which the FCA may take enforcement action against a Senior Manager personally for a breach of regulatory requirements in their area of responsibility. The Senior Manager has a defence if they can demonstrate they took such steps as a person in their position could reasonably be expected to take to avoid the breach occurring (or continuing).
FSMA section 66A(5) for FCA enforcement, and FSMA section 66B(5) for PRA enforcement. The original statutory test was the “presumption of responsibility” introduced by the Financial Services (Banking Reform) Act 2013, which was reformulated as the present duty by the Bank of England and Financial Services Act 2016.
For the FCA to succeed in a Duty of Responsibility case it must show (a) the firm contravened a relevant requirement, (b) at the time of the contravention the Senior Manager was responsible for the management of any of the firm’s activities in relation to which the contravention occurred, and (c) the Senior Manager did not take such steps as a person in their position could reasonably be expected to take to avoid the contravention occurring or continuing. The burden of proving (c) sits on the FCA. The test depends heavily on the SoR and the actions actually taken.
The Duty applies to all SMF holders regardless of firm type (Limited Scope, Core or Enhanced). It is the personal counterpart of the firm-level enforcement risk and the reason senior managers maintain meticulous records of decisions taken and questions asked.
If a firm breaches Consumer Duty fair value requirements in a particular product line, and the SoR for the Compliance Oversight SMF clearly allocates Consumer Duty implementation to that holder, the FCA may consider whether the SMF took reasonable steps — for example, evidence of fair value assessment review, board challenge, sign-off process, remediation when issues arose, training programmes, MI dashboard review.
Financial Services and Markets Act 2000, sections 66A and 66B. Bank of England and Financial Services Act 2016, section 32. FCA Handbook, DEPP 6 enforcement guide on Duty of Responsibility.
By Matt Bartlett, Director, on 2026-06-11.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-11. Apex Insurance Brokers Limited, FCA FRN 724952, Companies House 07014570. Not regulated advice — consult your broker on your specific position.
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