The U.K. government issued a policy paper on October 15, 2015, announcing that it will extend a new Senior Managers and Certification Regime (Senior Managers Regime) to all sectors of the financial services industry, including hedge fund managers and other asset managers. The Senior Managers Regime will increase the personal responsibility imposed on senior management personnel within hedge fund managers and other financial services firms and will be supported by robust enforcement powers for U.K. regulatory authorities. It will create a new approval regime for senior managerial staff; include a statutory requirement for senior managers to take reasonable care to prevent regulatory breaches; introduce a new certification regime for certain junior staff; and provide new rules of conduct for senior managers, certified persons and other employees of hedge fund managers and other firms operating within the financial services industry. This article summarizes the policy paper, setting out the background to and rationale for extending the Senior Managers Regime to hedge fund managers and other financial services firms; outlining the regime’s main features as they will apply to hedge fund managers; and noting the likely impact of the new regime on hedge fund managers. For more on hedge fund manager employee liability, see “Employees of Hedge Fund Managers May Be Liable for Failing to Prevent Fraud
,” Hedge Fund Law Report, Vol. 8, No. 30 (Jul. 30, 2015); and “U.K. Appellate Court Holds That Hedge Fund Manager Employees May Be Personally Liable
,” Hedge Fund Law Report, Vol. 6, No. 9 (Feb. 28, 2013).